In a letter last week to the Financial Secretary to the Treasury, the Institute sets out the case for introducing a soft landing when Making Tax Digital (“MTD”) for VAT is extended later this week from 1 April 2022 to all VAT registered businesses including the smallest businesses in the UK. The letter also sets out the Institute’s position on basis period reform and tax complexity. At a recent MTD Advisory Forum meeting, the Institute was advised that a soft landing will not be available to businesses mandated to use MTD for VAT from April 2022. This was on the basis that “over 30 percent of these businesses are already voluntarily using MTD for VAT and have not faced difficulties in meeting their VAT obligations”. In addition, HMRC explained that “relatively few businesses with taxable turnover below £85,000 are likely to be using multiple software products to keep their business records and that the minority that do use multiple products will have received sufficient notice of the new rules”. However, this does not take into consideration the many small businesses who are currently not using software of any type for whom the requirement to use software and keep digital VAT records is a significant step change. Many businesses are also unaware of the forthcoming changes as they are unrepresented and, to date, there has not been a public education campaign on this forthcoming change.

HMRC’s latest schedule of webinars is now available for booking. Spaces are limited, so take a look now and save your place. If you have any questions, please send them to team.agentengagement@hmrc.gov.uk prior to the webinar, including the title of the webinar in the ‘Subject’ line of your email. HMRC will answer as many as possible on the day. Declaring your grants on your Company Tax Return (CT600): register here This webinar provides an overview of how to report coronavirus support payments and grants on a company tax return, what happens if you’ve claimed too much and records you need to keep. Making Tax Digital for VAT: register here This webinar will provide some of the basics of Making Tax Digital for VAT. This will include what’s changing, using software and keeping digital records, plus an introduction to penalty reform. From April 2022, these requirements will apply to all VAT-registered businesses, to include those that have a turnover below the VAT threshold. Notification of Uncertain Tax Treatment by large business: register here This webinar for large businesses and their agents will provide an overview of the Uncertain Tax Treatment regime and will also cover the main requirements, the importance of early identification by large businesses and how to comply with the regime. COVID-19 Statutory Sick Pay Rebate Scheme 2: register here This webinar looks at making payments to employees who are off sick or self-isolating because of coronavirus on or after 21 December 2021 and what employers can claim under the scheme which closes on 17 March 2021. Introduction to Plastic Packaging Tax: register here Find out about the new Plastic Packaging Tax being introduced in April 2022 and what you need to do now if you produce or import plastic packaging. Plastic Packaging Tax – admin and technical aspects: register here In this webinar you’ll find more detail about the administrative and technical aspects of the new Plastic Packaging Tax.

Readers are reminded that Making Tax Digital for VAT is mandatory from 1 April 2022 for VAT registered businesses with turnover below the £85,000 VAT registration threshold. Note that at present HMRC has no plans to introduce a soft landing for the digital links aspect of MTD for VAT for these businesses. The Institute is discussing this with HMRC. HMRC has also recently updated the list of software currently available for MTD for income tax self-assessment (“ITSA”) which commences in April 2024. This page was updated on Friday, 25 February 2022 to show details of the MTD for ITSA compatible software products that are available. The changes include updating the list of software products that are ‘available now’, which are those that have been actively tested with live taxpayers and met HMRC’s minimum functional specification. The page will also list 15 new products, not previously shown on the page, that are in the late stages of development. These ‘in development’ software products are ready and will shortly start to be tested with live taxpayers. Once that final taxpayer testing has been performed, they will then be moved to the ‘available now’ section. HMRC continues to work closely with software developers to support them in developing a range of software products to satisfy demand within MTD for ITSA. Regular updates will be made to this page as new products become available.   HMRC is also working on delivery of a new dynamic software tool which is due later in the year. This will provide a more interactive experience for taxpayers to view possible software options and find the one that is most suitable for them.