The UK government has announced a year’s delay to April 2024 for the adoption of Making Tax Digital for Income Tax.
Kevin Sefton, CEO of untied, gives his views below on what this means and welcomes the new timetable.
HMRC’s own figures indicate that more than four million people will be affected by Making Tax Digital for Income Tax Self Assessment. It’s the biggest change in personal tax since the implementation of self-assessment a quarter of a century ago.
As the first end-to-end app recognised by HMRC for Making Tax Digital for Income Tax, untied has been working closely with HMRC to onboard taxpayers and agents as part of the MTD ITSA pilot.
We welcome the new timetable. We are also pleased that appropriate regulations are being set out to give certainty around MTD ITSA.
A change of this scale needs to be managed in a controlled way. COVID support requirements have diverted HMRC resources, and also restricted the amount of development and testing that can be carried out. HMRC has also been building up proposals for associated changes, including to the period which is assessed for tax purposes. These changes are not trivial – from both tax accounting and systems points of view.
This delay allows everyone more time to ensure that the implementation of Making Tax Digital is smooth and a success. This is not a time though to slow down – much needs to be put in place, and we would be keen to see HMRC keep to the original timetable for testing in order to embed MTD ITSA processes.
Taxpayers will be expected to put significant trust in the software that is being used for MTD ITSA. We note that the software requirements still are focused on functional compatibility and do not refer to quality or security. We consider these to be essential criteria to be addressed in conditions that HMRC will be setting out. In this, we welcome HMRC’s approach to treat high quality software developers as partners in the rollout of MTD ITSA, and that this is consistent with their own 10-year strategy published in July 2020.
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