Making Tax Digital Postponed Due To Brexit Complications

HMRC has made the decision to delay MTD (Making Tax Digital) for both business and individuals for the foreseeable future beyond 2021.

Although VAT has already gone digital recently and will continue to remain digital, issues surrounding Brexit has pushed HMRC into the decision to postpone the MTD scheme for at least two years.

MTD was supposed to be rolled out completely across the UK in 2020, however with the unfortunate circumstances of how Brexit has been handled, the government feel that it would be best to place a wider extension on the digital roll out, whilst terms are still being negotiated.

In the Spring Statement the chancellor said:

“The focus will be on supporting businesses to transition and the government will therefore not be mandating MTD for any new taxes or businesses in 2020.”

MTD for income & corporation tax was scheduled to come into effect from 2020, but as the UK prepares itself for Brexit, HMRC has redirected its focus on the implications of UK’s exit from the EU.

HMRC has said that its digital delivery team and business analysis team are being redeployed to focus on ensuring that a customs solution will be in place should it be required when the UK leaves the EU.

With the current perplexity surrounding Brexit, HMRC has stressed that ‘this does not indicate any expected outcome but is due to the level of work required to deliver any outcome’.