Speaking to the ICAEW, he said “the coronavirus pandemic’s impact on the uptake of digital technologies has helped to strengthen the case for MTD”, but added that “doesn’t mean all taxpayers are ready for a digitalised tax system”.
The government launched MTD under the finance act in 2017 to help members of the UK public “get their tax right and keep on top of their affairs”, now under this act all tax accounts must be submitted online.
Self-employed businesses and landlords with annual business or property income above £10,000 will need to follow the rules for MTD for income tax from their next accounting period starting on 6 April 2023.
Wallace believes that businesses still need help migrating to this new system, despite more businesses having turned to digital tools.
He said: “That doesn’t mean we should get complacent about costs, nor be cavalier in our attitude towards businesses transitioning to MTD, for many businesses, this still means significant change.”
The move to make tax digital has been criticised by the Public House Committee with members stating “it is not clear that Making Tax Digital will help reduce the tax gap or taxpayer costs at a time when individual taxpayers and small businesses are under considerable pressure.”
They said: “The Making Tax Digital programme is a logical plan in a world where more and more activity is carried out digitally, but it will impose extra, and possibly unreasonable, costs on some individual taxpayers and small businesses, and may be disproportionate to the gain to HMRC, some of these businesses may be less able to afford the changes since COVID-19.”