Collection

Making Tax Digital: consultations

A collection of consultations around specific elements of the Making Tax Digital reforms.

There is widespread agreement that Making Tax Digital for business is the right approach for the future. However a number of concerns about the pace and scale of change have been raised. As a result the government has announced that the roll out for Making Tax Digital for Business has been amended to ensure businesses have plenty of time to adapt to the changes.

Businesses will not now be mandated to use the Making Tax Digital for Business system until April 2019 and then only to meet their VAT obligations. This will apply to businesses who have a turnover above the VAT threshold - the smallest businesses will not be required to use the system, although they can choose to do so voluntarily.

The government remains committed to ensuring we can deliver a modern digital tax system for all businesses and their agents, supporting them to get their tax right and reducing the amount of tax lost through avoidable error.

In August 2016 we published 6 consultation documents, each focusing on specific customer groups or specific elements of the Making Tax Digital reforms.

HMRC wishes to thank those who responded to the consultations and appreciates the time and effort taken to send us your views. The consultation outcomes published in January 2017 are set out below, but the responses to the consultations, together with ongoing informal consultation with stakeholders, have helped inform the ongoing development of the policy and draft legislation, culminating in the latest changes announced by the government.

Bringing business tax into the digital age

This consultation considered how digital record keeping and regular updates should operate.

Simplifying tax for unincorporated businesses

This consultation asked for views on:

  • changing how the self-employed map accounting periods onto the tax year (reform of basis period rules)
  • extending cash basis accounting to larger businesses; reducing reporting requirements for businesses
  • removing the need to distinguish between capital and revenue for businesses using cash basis accounting

Simplified cash basis for unincorporated property businesses

This consultation considered the extension of cash basis accounting to landlords.

Voluntary pay as you go

This consultation:

  • looked at options for customers covered by the requirement for digital record keeping to make and manage their voluntary payments
  • considered how voluntary payments will be allocated across a customer’s different taxes
  • explored the best way of dealing with the repayment of voluntary payments.

It also announced the opportunity regular updating provides to make earlier repayments.

  1. Making Tax Digital: Voluntary pay as you go

    • Consultation outcome

Tax administration

This consultation covered aspects of the tax administration framework that need to change to support Making Tax Digital. It also set out proposals to align aspects of the tax administration framework across taxes, including the simplification of late filing and late payment sanctions.

  1. Making Tax Digital: Tax administration

    • Consultation outcome

Transforming the tax system through the better use of information

This consultation focused on how HMRC will make better use of the information we currently receive from third parties to provide a more transparent service for customers that reduces end of year under- and over-payments.

An overview for small businesses, the self-employed and smaller landlords

This document provided an easier way to respond to the Making Tax Digital consultations than the full formal consultations, and was specifically aimed at small businesses and landlords.

Published 15 August 2016
Last updated 31 January 2017 + show all updates
  1. Updated to reflect the publication of the responses to the Making Tax Digital consultations.
  2. First published.