Legislation to implement the government’s Making Tax Digital initiative has been put on hold.   

The plans, which would see businesses and the self-employed submit multiple tax returns online via computers or smartphones, have been met with widespread criticism.

However, following last week’s announcement of a general election, the government has decided to drop 72 out of the 135 clauses from the Finance Bill 2017- including Making Tax Digital. This decision has been met with positive feedback from the accountancy sector.

Although the legislation may still be passed in the future, many accountants and tax experts have welcomed the opportunity to properly discuss and debate the proposed legislation further before it becomes law.

Making Tax Digital was introduced by the government as a way to prevent errors in tax returns and was expected to come into force in April 2018.

However, the plans faced criticism with many tax and accountancy professionals highlighting that the changes would mean individuals and businesses will have to deal with a tax deadline of one sort or other during most months of the year.

Self-employed taxpayers with turnovers of over £85,000 were expected to be the worst hit by the changes, who from April 2018 would have had to file at least five returns per tax year in addition to regular VAT returns.

Many in the profession have also raised concerns that some individuals and small businesses- particularly those without current access to the internet- would struggle with the online process.

Indeed, the Chancellor in the Spring Budget already put a delay on the changes for some small businesses- pushing back the start date to 2019.

Added to this, many have raised the concern that the change could actually cause more mistakes to be made on returns if more taxpayers choose to submit their returns online without the help of a professional.

It is hoped that with this delay more time can be spent on the proposed initiative, and potential issues thought through before implementation.

Commentary on the decision:  “One sensed for some time that there were even misgivings amongst HMRC staff about how this was going to work in practice so it is perhaps unsurprising they would wish to give themselves time to consider the way forward.”