MTD and Digital Systems
You should know that in early May, HMRC issued an e-mail to stakeholders acknowledging the result of the 2016 EU referendum had resulted in major changes in priorities for the department. Which means HMRC is now being required to deliver essential programmes to support access to European markets and boost worldwide free trade. Many of these projects, which MTD is part of, will need to be underpinned by sophisticated digital systems. At the end of 2017, HMRC had 15 major programmes and more than 260 running projects. It is hardly surprising, in this context, that Jon Thompson, HMRC’s Chief Executive, felt the need ‘to take a step back and look carefully at what we could, and should deliver in light of those challenges.’
Simple Assessment on hold
The reorganisation of priorities includes halting expansion of the rollout of Simple Assessment (the removal from Self Assessment of those with limited taxable income from pensions or employment) and suspending real-time tax code changes. ‘The things that we’re stopping or pausing will slow our journey,’ Thompson continued, ‘but they don’t change our overall ambition to become the world’s most digitally-advanced tax authority. But crucially, they will allow us to support EU Exit while continuing to deliver ambitious changes for our customers.’ In its e-mail, HMRC acknowledged: ‘While our transformation is on track, it hasn’t all been smooth sailing. 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.’
VAT-MTD remains on track
HMRC, however, remains on track to deliver VAT mandation in 2019, for the VAT-registered with a turnover above £85,000. Indeed, a limited pilot has just started. However, the convergence of business taxes into a new single system (ETMP) – from HMRC’s many legacy systems – is set to somewhat slow things a little. But the department states this will not impact on the delivery of Making Tax Digital.
MTD for individuals slowed
While this might be the case for MTD for business, clearly this is not the position for MTD for individuals. Back in his March 2015 Budget, the then-Chancellor George Osborne promised us the death of the tax return. It seems that the demise of the self-assessment tax return has been greatly exaggerated – at least for the time being.
In the e-mail, HMRC also took the opportunity to list some of its transformation highlights, including:
- More than 15 million people now have Personal Tax Accounts, which were accessed 32 million times last year.
- Three million businesses now use Business Tax Accounts.
- Powerful new data sources helped to secure a record £28.9 billion through compliance work last year.
QuickBooks files first MTD-compliant VAT return
In what can only be described as a momentous achievement for Intuit, QuickBooks, the world’s leading online accounting software provider, has submitted its first Making Tax Digital (MTD) VAT filing to HMRC – through QuickBooks Online on 15 May 2018. Dominic Allon, Vice President and Managing Director of Intuit Europe said ‘There has been a lot of talk about Making Tax Digital, but with the official roll-out fast approaching it’s crucial that we offer a simple, fast solution to help accountants file their taxes digitally. We’ve been working closely with HMRC, taking part in workshops, insight sharing sessions and hackathons to ensure the product is developed in line with the VAT requirements set by HMRC, and to make life easier for our customers.’ QuickBooks is set to continue working closely with all its stakeholders – government, accountants and small businesses – to ensure that it fulfils its ongoing commitment to deliver a best-in-class experience for individuals and organisations that wish to file tax digitally. For more information on how QuickBooks Online can help your business be ready for MTD, please contact us on 020 3367 1106.