FFT Accountants welcomes U-turn on digital tax plans

FFT Accountants has welcomed the government’s decision to scrap Making Tax Digital (MTD) for Corporation Tax, calling it a “relief” for businesses already under pressure from complex compliance requirements.

The Manchester-based firm responded after HM Revenue and Customs confirmed the move in its updated Transformation Roadmap, published this week. The decision follows repeated delays to MTD for Income Tax and ongoing concerns over digital readiness.

Sam Bacall, FFT Accountants director, stated that it’s “never a surprise” when the government U-turns on these sorts of things, “but given the difficulty with MTD for IT, this wasn’t unpredictable”. 

He said that many businesses were already using digital systems and did not need an additional mandate: “It’s a relief for many of our clients, who are already under pressure from overcomplicated rules and rising costs. This takes away the immediate concern of another digital mandate being added to the list.”

Bacall added that most firms, particularly those already subject to MTD for VA, were managing records digitally and continuing to transition at their own pace. However, he dismissed concerns that the U-turn would widen the gap between small and large firms.

He stated that while there is “definitely a digital divide”, the objectives of a small business compared to a large, listed company are “very different”.

He said: “We don’t see the choice to scrap MTD for Corporation Tax as an automatic disadvantage to smaller firms. If anything, they now have the flexibility to adopt systems that suit their needs, rather than being pushed into something that may not fit.”

FFT has called for practical improvements to the existing Corporation Tax system, including quicker response times and more accessible technical support.

Bacall concluded: “Businesses want to be able to get clarity up front as much as possible, rather than having to suffer subsequent HMRC investigations when they have used an incorrect tax treatment on a matter that they would have liked to be able to consult with HMRC on.

“…There needs to be better consultation. Speaking to SME business groups would be a good place to start.”