The Institute continues to engage with HMRC on Making Tax Digital (“MTD”) and the Government’s Tax Administration Strategy. Over the summer, the Institute was represented at various forum meetings at which the many barriers to the successful introduction to MTD for income tax from April 2024 were discussed and highlighted including the lack of available software and the limited numbers of taxpayers participating in the trial.
During a meeting at the end of August ahead of the announcement of the new Prime Minister and her ministerial team, the Institute and other Professional Bodies reiterated the need for HMRC to take stock now of the very challenging timetable for MTD for income tax and revise this, where required, to enable HMRC to re-consult with stakeholders. Business, taxpayers and HMRC alike would benefit from this additional time and collaboration. HMRC should also focus on delivering current objectives well rather than over-stretching capacity.
Even more pressing, MTD for VAT and the closure of the online VAT portal from 1 November 2022 was also highlighted as a major concern given this could impact on the Exchequer if businesses are not signed up to MTD for VAT on time and are unable to pay the VAT due online.
The Professional Bodies are clear that further digitalisation of the UK tax system is only possible if it is delivered and implemented in such a way that it allows businesses and taxpayers sufficient time to prepare and participate in trials.
The UK Government also needs to deliver certainty and stability for businesses during the current cost of living and energy crisis. The Professional Bodies stressed that any in-year tax changes being considered by the Government should take this into account.
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