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MTD caught up in Brexit turmoil again

4th Apr 2019
Head of Insight AccountingWEB
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House of Lords divides to vote on Article 50 extension bill, courtesy of Parliament TV
House of Lords_ParliamentTV
House of Lords divides to vote on Article 50 extension bill, courtesy of Parliament TV

The scheduled House of Lords debate on Making Tax Digital on Thursday was scuppered by the constitutional crisis surrounding Brexit.

Just as the MTD for VAT debate was due to begin, opposition frontbench spokesperson Baroness Hayter put forward a Commons bill to prevent a no-deal exit from Europe for its first Lords reading.

The Commons bill engineered by Tory MP Sir Oliver Letwin and Labour’s Yvette Cooper requiring the prime minister to seek an extension to article 50 and avoid a no-deal Brexit passed by one vote yesterday in the face of government opposition.

The bill now needs to get through the House of Lords on Thursday to be passed into law in time to be effective.

Waving the motion to be debated on VAT and small businesses, Baroness Heyter said the more pressing issue for the small businesses that have written to her was to avoid a calamitous no-deal departure from the European Union.

In fractious, disjointed exchanges Conservative peer Lord Forsyth of Drumlean responded (to some laughter): “This has nothing to do with Brexit. This has to do with the constitution of this house” and subsequently accused the Labour front-bencher of “joining insurgents who have sought to undermine the process and procedures of the House of Commons”.

Lord Forsyth’s MTD motion arises from the findings of two reports from the Economic Affairs Finance Bill Sub-Committee on whether new HMRC powers and Making Tax Digital plans treated small businesses fairly.

Among the topics due to be covered were:

  • the impact of the loan charge on lower income taxpayers
  • taxpayer safeguards and access to justice, including accelerated payment and follower notices
  • the cost of MTD for VAT for small businesses and their readiness for the new regime
  • the rationale and timetable for the overall Making Tax Digital programme.

 Judging by the number of peers peers attending the debate and putting their names down to speak indicates that Lord Forsyth’s MTD motion is unlikely to see the light of day.

Setting the scene, Baroness Hayter advised the house that the parliamentary cafeteria was open for breakfast from 7:30am. She added that she was willing to take orders for breakfast tomorrow morning “if that what it takes to do what the Commons has asked us to do”.

In spite of the government’s resistance, a motion to expedite the Cooper bill passed in the Lords by 121 votes shortly after noon on Thursday (pictured above). A day of filibustering is expected to ensue.

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