Redeployment of Government resources to delay Making Tax Digital for Individuals

George Hay Chartered Accountants

A number of key projects at HM Revenue & Customs (HMRC) have been placed on hold, in order to free up staff to focus on Brexit issues, including Making Tax Digital for Individuals.

The simple assessment rollout and real-time tax code changes, both important facets of MTD for Individuals, will not be introduced as planned.

This, according to an HMRC stakeholders email, is due to a “change in priorities” in the department as turns its attention to creating sophisticated digital trade systems.

The email indicated that, while the Government’s transformation programme was on schedule, it had not necessarily been “smooth sailing”.

It states: “We were overly ambitious about the number of customers who would stop contacting us by phone and post after we introduced digital channels. Demand is falling, but not by the amount assumed in 2015.”

Despite changes to MTD for Individuals, HMRC has insisted that the Making Tax Digital (MTD) for VAT programme, due to come into effect in April 2019, will remain on track.

Live piloting of MTD for VAT is now underway, with HMRC inviting VAT registered entities with straightforward affairs to sign up. More complex businesses are unlikely to join the pilot until October 2018, and public bodies not until November/December 2018.

However, HMRC is yet to comment on MTD for other taxes which is expected in April 2020, at the earliest, under the current implementation timetable.

“The MTD for Individuals programme has made significant progress here, so we’ve laid foundations that will enable us to return to this in the future,” the email said.

“We will pause work to digitise services that impact fewer numbers of customers, such as those paying Inheritance Tax, or applying for Tax-Advantaged Venture Capital Schemes and PAYE settlement agreements.”

Among the casualties will be simple assessment, which was intended to take two million people out of self-assessment and ease the Revenue’s workload.

Yvette Nunn, Co-Chair of ATT’s technical steering group, welcomed the delays but called on the Revenue to “use the extra time given to iron-out the known problems with simple assessment and dynamic coding before they hit play on them again.”

Richard Dilley, Partner at George Hay, said: “No one can deny that there is still a very long way to go with MTD, but businesses should not get complacent when it comes to preparations. The fact that live pilots are ongoing and are expected to be extended to other demographics imminently should serve as an indicator that the implementation of MTD for VAT is still a top priority for HMRC.”

Here at George Hay, we keep up to date with all the latest changes to tax and accounts legislation – including announcements relating to Making Tax Digital.

We support a number of online accounting software packages so, when it comes time to take the leap, our trained advisers will be on hand to provide as much or as little assistance as you require; from introducing you to your chosen platform, getting you set up and providing training to helping you to incorporate the software into your usual routine.

Our aim is to assist our clients with choosing and implementing a system to best suit their business, and to offer professional support and advice throughout the transition and beyond.

To speak to one of our experts about Making Tax Digital and what it means for your business, contact us today.

Link: HMRC scaling back digital projects to ‘release project capability to EU Exit work’