By Brian Palmer Making Tax DigitalBudget 2017 – great for Making Tax Digital but self-employed have other causes for concern9 Mar 2017 They asked, we responded, and they listened.The news that the threshold for Making Tax Digital (MTD) will be initially raised from the proposed £10,000 to the current VAT threshold of £83,000 has come in direct response to AAT’s own response to the consultation where we recommended this higher figure. This in turn has come from speaking to our licensed accountants, less than 5% of whom supported the £10,000 threshold.This is great news. A higher threshold will ultimately increase the effectiveness, value for money and credibility of MTD, and will mean some 3.1 million small businesses will not be required to maintain their accounting records digitally or to report their trading activities to HMRC using quarterly updates until April 2019.HMRC will also benefit from this deferment, as they will get more time to learn and adapt MTD following the 2017/18 tax year’s beta testing and the 2018 ‘go-live’ date for larger businesses from April 2018.We now hope that Government listens to our other recommendations around not implementing MTD too quickly and, indeed, amending the eventual threshold to mirror the personal allowance.We believe a phased implementation – starting at the £83,000 threshold but then gradually reducing it over time, to the UK personal allowance rather than the arbitrary figure of £10,000 would be more appropriateWith the personal allowance set to rise to £11,500 in April 2017, the advantage of making the link is that the entry-threshold will naturally increase in successive years, and not be eroded by inflation.So, there’s still more for us to do in this area – but it’s a great start.Concerns for the self-employedUnfortunately for the self-employed, the Government’s self-imposed ‘tax lock’ – designed to stop income tax, VAT and national insurance contributions (NICs) from rising during this Parliament – clearly didn’t apply to NICs from them.While Philip Hammond stopped short of raising Class 4 NICs from the current 9% rate to the 12% that employees currently pay, they will be rising to 11% by April 2019, largely in response to the fact the self-employed now have access to the same state pension as employees.On the surface, there’s nothing wrong with Government trying to create a more level playing field when it comes to national insurance. However, many self-employed people will naturally be concerned that they don’t necessarily get the same entitlements around holiday and sick pay as employees, and therefore need concessions elsewhere, though this isn’t necessarily something that the tax system should subsidise. Brian Palmer , former tax policy adviser for AAT..