By Connor Smith, Accountant at Hive Business

Here at Hive, we’ve been keeping a close eye on the big changes the government is planning to implement on how you handle your tax affairs. When we last updated you on Making Tax Digital (MTD), HMRC’s big switch to the digital age, we gave you the rundown on the feedback (aka grievances) the treasury had received during the consultation period.

Now, another spanner in the works. A snap election. Making Tax Digital appears to have been shrunk in the ‘wash up’; the phrase for the last few days of a Parliament before dissolution. Because public bills cannot be carried into a new parliament, the Government plays a sort of political dating game with the proposed legislation, swiping right on bills they want to pass before dissolution, and left on bills they’re still not quite sure about.

We all know the uproar that followed the Spring Budget (and the subsequent U-Turn), and it appears Downing Street are still unsure on some of their more headline-grabbing changes. Hence, we’ve got a pretty hefty shrinking of the Finance Bill. The surviving changes read over 140 pages of legislation, as opposed to the original 762 pages.

Unsurprisingly, the biggest proposed change to the tax system in recent memory has been shelved for at least a year. Making Tax Digital was due to come into force for businesses with turnover above the VAT threshold in April 2018, with those below the threshold following in April 2019.

Other proposed changes delayed in the wash up include:

• • The tax free dividend allowance slashed from £5,000 to £2,000 (i.e. it remains at £5,000!)
  • £1,000 tax free allowances for property and sundry income
  • £500 tax free pension advice
  • Restrictions on corporation tax losses
  • Taxing Capital Gains made on UK land at income tax rates, not CGT rates.

Now, you’d be foolish to believe this is the end of MTD.

While its future technically does depend on who wins this year’s general election, the proposals are more than likely to return in a familiar form following the formation of a new Parliament. And you can be assured HMRC are busy finalising their grand scheme behind the scenes. In the meantime follow our link for all the latest updates on Making Tax Digital.

The delay presents an ideal opportunity to review your business and implement changes now, setting up procedures to make the switch to MTD as simple as possible. Call Hive on 01872 300232 or email us at hello@hivebusiness.co.uk.