Two leading professional bodies have joined the Lords Economic Affairs Committee in calling for the Government to delay the introduction of Making Tax Digital (MTD) for VAT by one year.

The Chartered Institute of Taxation (CIOT) and the Association of Taxation Technicians (ATT) responded to an update on the scheme from Financial Secretary Mel Stride.

Stride confirmed that MTD for VAT is ready for implementation, adding that more than 16,500 businesses had signed up for the pilot service.

From 1 April 2019, firms with a taxable turnover above the VAT-registration threshold of £85,000 will be required to use digital tools for record-keeping and VAT returns.

However, the CIOT and ATT have argued that better clarity and guidance is needed before the scheme is launched.

Adrian Rudd, chairman of a joint CIOT/ATT working group, said:

"It is good that progress is being made on awareness of MTD, though one in five affected businesses remain completely unaware of it and many of those that are aware are hazy on the details.

"Accordingly we would have liked the minister to have announced a one-year deferral of mandation in order to allow businesses more time to prepare, especially during these challenging times."

This echoes a previous report from the Lords Economic Affairs Committee, which said HMRC had failed to adequately support small businesses and should delay MTD for VAT by at least one year.

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