We’ve been talking about MTD and the continuation of VAT rates
On 31 August, informed by direct member feedback as well as member participation in our Talking Tax Series, ACCA submitted a response to HMRC’s consultation on basis period reform. We made a number of suggestions for a more joined-up approach and raised concerns about the potential impact on accountant workload and HMRC digital readiness.
In particular, we highlighted strong concerns around the timeline for implementation of MTD alongside the proposed changes to the accounting year for tax and the knock-on effect on accountant workload and SME compliance.
While we await the full departmental response to the consultation, HMRC has acknowledged our concerns and on 23 September, the Financial Secretary to the Treasury, Rt Hon Lucy Frazer QC MP, announced in Parliament that MTD for income tax would start from 2024/25 (and 2025/26 for general partnerships) and basis period reform would not happen before April 2024, with the transition not before 2023.
ACCA will continue to monitor HMRC’s position and full response on this closely and thanks members for their contributions to our response. We continue to welcome any additional member feedback to UKPolicy@accaglobal.com.
ACCA wrote to the Financial Secretary to the Treasury, Lucy Frazer QC MP, on 30 September, to request that government reconsider the timetable for returning to the 20% rate from April 2022. ACCA highlighted that many of our members working within and advising those in the hospitality sector have raised concerns around the increase to a 12.5% VAT rate, and subsequently to 20% from April next year.
We recommended retaining a rate of 12.5% for the sector for the remainder of parliament to support certainty for the sector as it continues to recover.