Do not rush MTD, say the Lords

The government should delay the launch of Making Tax Digital (MTD) until 2020 and make the scheme optional for many small businesses and self-employed people.

These are among the recommendations made by the House of Lords’ Economic Affairs Committee in its report on MTD for business. The committee concludes the roll-out of the scheme is being rushed; small businesses will face unnecessary burdens and the government will benefit only marginally.

Too little consideration has been given to support those lacking digital skills: HMRC’s own research shows that 61% of the self-employed cannot or need help to interact with the government online.

The committee agrees that the digitalisation of tax is to be welcomed but recommends a series of modifications to ensure the policy is implemented successfully.

The government should revise and improve its assessment of MTD’s benefits and costs. The estimate of the tax gap savings is fragile...