Experts said the decision meant the scheme, which was due to hit large businesses from 2018, and small businesses from 2019, will be delayed by at least a year.
Chas Roy-Chowdhury, head of tax at ACCA, said that the delay would “ ensure that there is time for full and comprehensive debate.”
While recognising the “great potential” in the digitalisation plans, Paul Aplin, ICAEW vice president, pointed out that “the scale of change is such that it must not be rushed: getting it right is more important than getting it fast”.
Other tax measures such as changes to corporate loss relief and interest deductibility, the money purchase annual allowance for pensions and penalties for enablers of tax avoidance schemes, have also been dropped. These will all likely return in a bill after the election on 8 June.