Making Tax Digital

Making Tax Digital (“MTD”) is the most fundamental change to the administration of the UK tax system since the introduction of self-assessment. As implementation of the project is rolled out and the legislation is developed and enacted, the Institute will support its members. These pages will be updated with news, developments and resources to help you get ready for this fundamental change. MTD commences with VAT from April 2019. The project is expected to be rolled out to other taxes, starting with income tax.

Latest news

Tax UK

HMRC recently sent the below update on Making Tax Digital (“MTD”) which sets out its approach to enforcing compliance in the first year of MTD. Update from HMRC “The government has confirmed a light touch approach to penalties in the first year of implementation of MTD VAT. Where businesses are doing their best to comply, no filing or record keeping penalties will be issued.  The department’s main priority is to support taxpayers to transition to MTD smoothly, so it will not penalise businesses, instead we will send them a letter encouraging them to join without further delay [where businesses failed to sign up in time for their first MTD filing deadline].  We are trialling two different approaches based on compliance and behavioral insight. For each approach, there are two versions of the letter – one includes a disclaimer for businesses where the information we hold suggests their taxable turnover may be below the VAT registration threshold.    Following feedback on the letter issued to monthly filers, we have amended the letter to make the disclaimer more prominent – it is now at the outset.  Sanctions will remain possible in cases of deliberate non-compliance, and in order to safeguard VAT revenue.”  

Sep 09, 2019
Tax UK

HMRC have asked us to share their latest update on Making Tax Digital. Click ‘Read More’ to see this. The latest Making Tax Digital Agent Update has also been published. “On 7 August we reached a significant milestone in the rollout of MTD, with the first quarterly filing deadline for VAT.  This therefore seems like a good moment to update you on how the new service is progressing and to thank you for the important role you have played in getting us to this point. We have been encouraged by the numbers who have signed up and submitted their VAT returns through MTD. There are now nearly one million businesses in the service who have made over 900,000 VAT submissions. As at 7 August 370,000 (76%) VAT registered businesses above the threshold in stagger 1 had signed up.  This is in line with our expectations, particularly given the public commitment we made up front to taking a light touch approach to digital record keeping and filing penalties during the first year. Our focus during this period has been to support businesses moving to MTD to get it right, not to unnecessarily penalise businesses who are doing their best to make the transition. We are now writing to the businesses who did not sign up to encourage them to join as soon as possible and expect numbers to increase significantly in the coming weeks as a result. We took this approach with monthly filers, whose first return through MTD was due by 7 June. 89% (40,000) of that group have now joined the service.  We are also continuing to see non-mandated customers joining on a voluntary basis and sign ups from businesses in stagger 2 (179,000) and stagger 3 (124,000) are accelerating in advance of their first submission deadlines on 7 September and 7 October respectively. In the period leading up to the stagger 1 filing deadline on 7 August the service performed well, handling high volumes of traffic.  Over 60,000 submissions were filed per day at peak times and 19 businesses even filed their returns in the minute before midnight. Businesses and agents also rose to the challenge. We understand that in getting to a position where they felt comfortable submitting their first returns under MTD many have invested significant time and effort to research and prepare. We would like to thank all of those who worked so hard to make this a smooth transition for the majority of businesses. Those who have now switched to digital record keeping and signed up and submitted their first return have taken the biggest step in the MTD for VAT journey. Once businesses are set up and get used to a new way of doing things, they’ll be better placed to take full advantage of the benefits that the move to digital brings. We know that being able to get support through the VAT helpline is very important for customers. That’s why we deployed additional staff to the helpline in late July in anticipation of a peak in demand in advance of the 7 August deadline, helping deliver an average wait during that week of five minutes. The helpline achieved an average wait time of less than five minutes for the whole month of June and for most of July, with the exception of two weeks in July (commencing 1 and 29 July in the build up to peak weeks) when average wait times rose to around seven minutes before returning to normal levels. Whilst we are pleased with the progress we have made it is important to acknowledge that a small proportion of customers experienced issues when trying to meet their obligations and I am sorry for the frustration and worry this may have caused.  We will continue to improve the service so that in future every customer is able to experience the smooth process that was enjoyed by the majority. Over the coming return deadlines we will continue to monitor progress in the roll out of the VAT service and take stock of the lessons learned when considering the future direction of MTD.” END OF HMRC UPDATE

Sep 02, 2019
Tax UK

Forthcoming online HMRC webinars are listed. HMRC ask that you register at least five minutes before the relevant webinar is due to start.   Making Tax Digital – your Agent Services Account: Choose a date and time New VAT reverse charge for construction services: Tuesday 10 September – 10am to 11am Income from property Part 1: Thursday 12 September – 10am to 11am Income from property Part 2: Thursday 12 September – midday to 1pm Off-payrolling working rules from April 2020: Friday 20 September  – 2pm to 3pm New VAT reverse charge for construction services: Monday 30 September – midday to 1pm If you have any questions for HMRC’s subject experts more than 24 hours prior to the meeting, please send them to team.agentengagement@hmrc.gsi.gov.uk, including the title of the meeting in the ‘Subject’ line of your email. Any questions that arise after this time should be submitted during the live meeting. These interactive meetings run on the ‘GoToWebinar’ platform. The organiser will run through how to ask questions on the day. Upcoming meetings are set out. Missed recent Talking Points events? If you weren’t able to join HMRC on some of the latest Talking Points webinars then this is your opportunity to catch up. Some may only be available for a short period of time – so make sure you don’t miss out. The following webinar recordings are currently available: New VAT reverse charge for construction services: Register and view Making Tax Digital - Your Agent Services Account: Register and view Stamp Duty Land Tax – Higher Rates for Additional Dwellings – Back to Basics: Register and view Capital Allowances and Vehicles: Register and view

Sep 02, 2019