Did anyone see an email about MTD ITSA pilot?

Did HMRC email inadvertently reveal details of hotly anticipated two-year delay?

Didn't find your answer?

We've been on MTD ITSA watch since the AccountingWEB Live Expo, when rumours were rife that it was going to be delayed.

As the background noise intensified this week, word reached us about a gov.uk post about the MTD pilot and that an email had been sent detailing the changes:

HMRC MTD delay announcement

If you visit the Using Making Tax Digital page on Gov.uk, there is a note saying that the page was last updated on 14 December 2022 - but not changes are documented or visible. Could the text quoted here be the phantom edit?

Did anyone here get the mail? We're just trying to confirm the details with HMRC now. We believe that HMRC officials as well as professional bodies and software developers are now urging the Treasury to clarify the picture, but with the days counting down until Parliament goes on holiday until January, no such confirmation is forthcoming.

It's obviously a sensitive subject but goodness knows why officials and ministers are so reluctant to bite the bullet? When everyone with the slightest interest in the subject is now operating on the assumption that the programme is going to change, but are left hanging in the air about the specifics, no good will come of it. Better to administer the news in one swift response rather than let it dribble on for days.

More news coverage to follow... let us know if you've seen it or have any further information

[OP updated with a bit of extra detail and comment on MTD site alterations]

Replies (81)

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By Hugo Fair
15th Dec 2022 15:39

Yes - as already reported elsewhere (see https://www.accountingweb.co.uk/any-answers/is-mtd-for-income-tax-postpo...).

But not as a discrete email, merely as one of the items within the set of daily emails I receive from HMRC ... this particular one being "Daily update from GOV.UK for: All types of document about all topics by HM Revenue & Customs".

However, as I said in my earlier post:
"But when you select the hyperlink there's no mention of anything being extended to 6 April 2026 (nor any details provided via the usual "See all updates" section)!

Is this further incompetence?
Or did they start to announce a delay and then get cold feet?

It's beginning to look as though MDTP has got a better handle on this than HMRC!"

Thanks (4)
Replying to Hugo Fair:
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
15th Dec 2022 15:53

Sorry I missed your earlier post, Hugo. It wasn't there when I looked earlier and we've spent most of the intervening hours trying to pin down the details.

Thanks for quoting the material from the email in your previous post. At the moment, though, we still await any formal confirmation from HMRC or The Treasury, so can't be definitive about if/when it'll happen. There will be a lot of people with something to say about the situation, I'm sure.

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By ireallyshouldknowthisbut
15th Dec 2022 15:40

LMAO. They even managed to bungle the latest delay.

This internet stuff is tricky for the little lambs.

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By janelm
15th Dec 2022 16:21

ICAEW emailed just yesterday about holding a webinar MTDtalk next Tuesday 20th, so I am optimistically anticipating an announcement this side of Christmas perhaps?

"HMRC has withdrawn from most engagement on MTD ITSA since September, leading to speculation about a possible delay. Join ICAEW’s Tax Faculty team for discussion of the latest position. ICAEW’s next tax webinar will share any new information about making tax digital for income tax self assessment (MTD ITSA)."

https://www.icaew.com/insights/tax-news/2022/dec-2022/join-icaews-mtdtal...

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By kelvindavies
15th Dec 2022 16:26

https://govdiff.njk.onl/update/2022-12-14T15:24:00+00:00/www.gov.uk/guid....

This leak appears to suggest it has been delayed...

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Replying to kelvindavies:
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
15th Dec 2022 16:40

Thanks Kelvin. That's a very useful tool, which means there's actually something on the record... even when its not on the record.

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Replying to kelvindavies:
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By Hugo Fair
15th Dec 2022 16:52

Interesting.

I don't know how you get that 'marked-up' version (showing tracked changes) - but the version of that page currently live on GOV.UK still shows the wording that your version shows as having been changed!

This is what was causing me such confusion this morning ... did they make changes and then reverse them (i.e. 'undo the changes')? Or did they publish in a half-cocked state?

The only thing certain is that HMRC are having their very own existentialist crisis.

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Replying to Hugo Fair:
By ireallyshouldknowthisbut
15th Dec 2022 17:06

You would think they would be very slick at putting the date back, given how many times its happened.

April 2018 was the original go-live date

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Replying to ireallyshouldknowthisbut:
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By Hugo Fair
15th Dec 2022 17:59

If only Keith Emerson was still alive.

He could release a new version of his first hit with the Nice - an instrumental ode to HMRC, concluding with a child announcing portentously:
‘HMRC is pregnant with promises and anticipation, but is murdered by the hand of the inevitable’!

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Replying to Hugo Fair:
Caroline
By accountantccole
16th Dec 2022 12:08

I went to school with his son.....

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Replying to kelvindavies:
Tornado
By Tornado
16th Dec 2022 09:22

This note only refers to helping HMRC test & develop MTD by the 6th April 2026 not that this date is the introduction date for its general use. This makes sense at it is going to take at least two years to test and develop and then perhaps go live in 2027 or 2028.

Personally I think there are aspects of this badly thought out project that can never be resolved and it will never be fit for purpose but hey, loads of people are going to be paid barrowloads of money to try and make it work so why would they give up.

Between friends, who cares about thousands of millions of pounds being spent on a failed project.

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Replying to Tornado:
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By Gaz1962
16th Dec 2022 10:19

Best ask Nick Gibb that....he's an acknowleged expert !

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By User deleted
15th Dec 2022 17:26

That will be over 10 years since first announced! Just put the poor thing out of its misery.

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Replying to User deleted:
By ireallyshouldknowthisbut
16th Dec 2022 09:25

If its new revised launch is April 2026, I think that is now a year longer than the original time frame as from the original detailed launch (December 2015) to the original go live date (April 2018) for quarterly reporting, with VAT in April 2019 and companies April 2020.

One wonders what is different then to now. Our friends at HMRC still don't seem to have got too far in dealing with the numerous issues which we knew existed, and HMRC in their complete ignorance did not.

At least no-one is still telling us that you just wave your phone at a pile of receipts and its all done.

All that have done in that time is to replace the existing fully digital VAT filing system - with a virtually identical one. Both systems allowed me to file digitally using software. The only difference now is I have to pay for 3rd party software to file VAT on those not on software.

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By DonDan
15th Dec 2022 17:35

They can keep the digital links if they want (as long as spreadsheets are still allowed) and just dump the pointless quarterly reporting. It would then become a fairly benign project overall

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By Catherine Newman
15th Dec 2022 18:04

I couldn't log into SA login at least 4 times today to check clients' positions. I got various error messages.

Where clients paid early and now don't owe anything, their accounts are showing a refund due and they clearly aren't going to get statements.

I had to explain POAs today-but I haven't submitted my 2022/23 return. God help us.

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Replying to Catherine Newman:
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By User deleted
15th Dec 2022 18:43

If only HMRC had spent all the energy and money on getting current systems working better instead of now what is in effect a dead project.

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Replying to Catherine Newman:
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By Jimess
19th Dec 2022 09:51

I have at least three clients that are still waiting for HMRC to "find" their July payments on account. They are clearly showing on the clients bank statements, with the correct client reference, but have somehow got "lost" in the HMRC banking system. One is an older client that worries about making sure his bills are paid and I am getting daily phone calls from him asking if his money is showing on his HMRC account yet. My worry is that once I submit his 2022 tax return, HMRC are going to show a false liability on his statement of account and try collecting it from him again. I last spoke to HMRC in October and was told that I couldn't chase this again until 30 December, meanwhile my client is worrying himself sick. It's just terrible. Taxpayers deserve better than this.

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
16th Dec 2022 09:23

The Times has jumped on the phantom post story and built it into a two-year delay announcement, but just reported what was circulating in the public domain yesterday. https://www.thetimes.co.uk/article/b21da94c-7ca1-11ed-8486-22782b7fe87b?...

Meanwhile, we're still waiting for official confirmation of the decision, with professional bodies, big firms, software developers and practitioners up and down the land all calling for clarity. Accountants have a lot of other things to think about at this time of year than the will they/won't they status of MTD.

Thanks (5)
Replying to John Stokdyk:
Tornado
By Tornado
16th Dec 2022 09:40

The announcement seems to have been made in error too early. Yet another example of how incompetent HMRC are.

MTD is clearly one step too far for them and it should be abandoned now and attention turned to the Self Assessment system which was well thought out in the first place and has worked very well for nearly 25 years, and could be developed into a truly World beating system of Tax Administration. MTD will NEVER be able to do this.

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Replying to John Stokdyk:
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By Jimess
17th Dec 2022 06:56

Steve Hare, CEO for Sage also posted an article in the Times the day before, about why Digital Taxation should be embraced as soon as possible. Hardly surprising from the point of view of the software houses, but it sort of let the cat out of the bag that something was going to happen.
https://www.thetimes.co.uk/article/a-tax-system-fit-for-the-digital-age-...

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By bernard michael
16th Dec 2022 09:26

Someone in HMRC thinks it's 1st April

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By lordofsums
16th Dec 2022 09:37

Good, hopefully by then they sack it off

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By bluebaron
16th Dec 2022 10:17

"Daily Business" (online) is saying that it's likely to be delayed to 2026. A client also heard an announcement on LBC Radio this morning that it's being delayed to 2026. He didn't know whether it was an HMRC official stating this, or not. Certainly a case of Watch this space!

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By ColA
16th Dec 2022 10:17

Reported as ‘fact’ by today's Times!

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By User deleted
16th Dec 2022 10:39

At this point why don't HMRC just make it a voluntary system for those few who want to use it. The two systems ran in tandem for VAT with no issues until HMRC forced everyone onto MTD.

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Replying to User deleted:
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By bernard michael
16th Dec 2022 10:43

ABC12 wrote:

At this point why don't HMRC just make it a voluntary system for those few who want to use it. The two systems ran in tandem for VAT with no issues until HMRC forced everyone onto MTD.


I don't think l have a single client that would volunteer to send 4 more tax returns a year. Any that did would be promptly "sacked" as being not compos mentis
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Replying to bernard michael:
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By User deleted
16th Dec 2022 10:45

Well, I was thinking of the 100 fools daft enough to be in the pilot...!

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Replying to User deleted:
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By bernard michael
16th Dec 2022 11:29

ABC12 wrote:

Well, I was thinking of the 100 fools daft enough to be in the pilot...!

I bet there's no-one on AWEB that knows of a single participant

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Replying to bernard michael:
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By User deleted
16th Dec 2022 11:37

They are probably all Xero, QuickBooks etc employees..

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Replying to bernard michael:
By ireallyshouldknowthisbut
16th Dec 2022 10:49

but but but but but there are huge benefits of quarterly filing Apparently

Like it being able to work out your tax bill. [no, me neither]
And, erm. Others, like, erm. Regularly bookkeeping. That's the one. And, erm you cant use software unless you report quarterly. Hang on, maybe no that one.

Anyhow, its a brilliant project, you just have to BELIEVE, and its part of HMRC digital strategy so it cant possibly be wrong.

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By 0098087
16th Dec 2022 11:26

Labour policy is to junk it. They'll be in government by then so it's dead

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Replying to 0098087:
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By NotAnAccountant2
16th Dec 2022 11:54

0098087 wrote:

Labour policy is to junk it. They'll be in government by then so it's dead

I did wonder whether the 2026 date was specifically to achieve that.

April 2025 would be election fodder if the current government does delay the general election to the last possible moment.

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Replying to NotAnAccountant2:
Pile of Stones
By Beach Accountancy
16th Dec 2022 12:02

Yes, but it's funny how many policies get ditched once a party is in power. Once the civil service smother Labour there'll be no no real change...

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Replying to 0098087:
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By Jo Nokes
16th Dec 2022 16:49

Is that a fact, or wishful thinking?

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Morph
By kevinringer
16th Dec 2022 14:12

Google says the text also appeared on https://www.gov.uk/guidance/using-making-tax-digital-for-income-tax.cy. That page now includes the following statements in Welsh which Google has translated:

"The page you are looking for is no longer available
The information on this page has been removed because it was published in error."

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Replying to kevinringer:
Tornado
By Tornado
16th Dec 2022 14:29

This sounds to me like a classic deliberate 'leak' to prepare some people for the worst .... such as software developers.

It could also be an error in that HMRC are not going to delay MTD further, but are going to SCRAP IT instead.

YIPPEE

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Replying to Tornado:
Morph
By kevinringer
16th Dec 2022 15:27

I can't see HMRC scrapping it, even if they've now seen the light. There's been too much political capital and HMRC resources put into it. At this stage, even if they want to scrap it, I think they'd do no more than announce a postponement.

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Replying to kevinringer:
Tornado
By Tornado
16th Dec 2022 15:45

Whilst it would be very difficult to scrap this project, there is absolutely no justification for continuing with this when it is quite obvious (and has been right from the start) that there are signifiant elements that are far too complex to work properly.

I am sure that there are some elements of the project that could be used to enhance Self Assessment, but even then that may not work. On many of the Tax Returns I have been working on recently, basic information that should easily be pulled in through the API, such as employment income, State Pension and Private Pensions is simply not there. If this small part of the project was perfected for Self Assessment I would be very happy but at the moment it is difficult to find anything related to MTD that does actually work.

Perhaps someone in the know (AWEB Journalists?) could give us a summary of what is working correctly in the MTD project so far and what is planned, but not yet working correctly.

If HMRC do not scrap this project soon or convert it into a simpler project that is likely to work, then I will be making stronger representations to the Government and remind them who votes them into power.

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Replying to kevinringer:
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By User deleted
16th Dec 2022 15:55

The current lot running the country have scrapped many a thing at huge cost. One more won't make a difference

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By the_fishmonger
16th Dec 2022 14:37

Are HMRC going to reimburse those businesses who have moved onto a cloud platform in readiness, for the subscriptions they did not want to pay? Of course not - there'll be the usual BS statement along the line of "your new bookkeeping platform will still help you run your business more efficiently, saving at least that cost, so why should we".

We've been pushing clients to be prepared because we didn't want this to hit them in 2024 when it was live. I cannot put words to how angry this delay (or permanent suspension) of MTDfITSA will make me, if it turns out to be true.

Heads should be rolling in HMRC and the civil service wonks responsible for it too, should this come to pass. Better still, put them in a SpaceX pod and send them to Mars so there's no risk they can ever screw up anything else!

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Replying to the_fishmonger:
By ireallyshouldknowthisbut
16th Dec 2022 16:50

Whilst i have some sympathy that you have decided to push ahead preparing your clients for this and look to have been shafted in the process, I fail to see why the project should proceed just to appease those businesses which are already wasting time and money on unsuitable accounting processes. That is just wishing time wasting processes onto others.

Surely its better you can now safely bail out and clients can go back to simpler systems more suited to their needs. Of course those clients who benefit from cloud will stay as they are.

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Replying to the_fishmonger:
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By User deleted
16th Dec 2022 17:14

Respectfully, the project has been delayed so many times that the 2024 date was as firm as jelly as all the other dates.

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Replying to the_fishmonger:
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By Mr_awol
17th Dec 2022 13:56

Why would HMRC reimburse taxpayers who moved to software over a year and a half before the would need to do so (for MTD purposes at least).

I suspect your push to get everyone on software ‘early’ had less to do with protecting them and more to do with you listening to the account manager (sales rep) from your preferred software providwr(s). The smart move was to migrate everyone for whom it would be a benefit anyway, and leave until the last minute (Jan 2024 at the earliest) those for whom it would be an unnecessary cost - whilst of course keeping them update that eventually they would ‘have to’ change their ways.

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By Refs1
16th Dec 2022 19:40

Unfortunately, as with many similar projects over the years from HMRC I felt it was obvious that this was not going to work.

I doubt they will be ready in 2026, as what they are proposing is unworkable.

You just have to look at the number of clients who leave things until the last minute. You also have to consider the UK has a skill shortage, so with the additional work required with these type of clients, where is the people coming from do this work?

Like many small practices we now have a waiting list for new clients, who are happy to wait (most of the time) and also a large backlog of work.

So, I am glad I did not follow the hype and so far my preparation for MTD ITSA is zero.

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Replying to Jimess:
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By User deleted
17th Dec 2022 08:24

Is the text in that article parody "The reason is that digital records and software help reduce common mistakes"
Not from what I see presented when DIY clients tell me the cloud software is ready for me. Items under wrong categories, drawings as wages, balance sheet transactions in P&L etc etc

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Replying to User deleted:
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By Yossarian
17th Dec 2022 11:17

ABC12 wrote:

Is the text in that article parody "The reason is that digital records and software help reduce common mistakes"
Not from what I see presented when DIY clients tell me the cloud software is ready for me. Items under wrong categories, drawings as wages, balance sheet transactions in P&L etc etc

In my experience the use of software just replaces one set of common mistakes with a slightly different set of common mistakes.

A recent example. Ltd co client buys car on HP in directors name, puts full invoice amount onto company purchase ledger (where it sits ad infinitum) and to p&l as motor expense. Monthly repayments start coming out of bank, client also puts these monthly repayments to the p&l as a motor expense. The software defaults to reclaiming VAT on motor expenses so therefore reclaims VAT on both the original invoice and the HP repayments.

So there we have software not only claiming a full deduction of the cost of a car against CT (twice) but also reclaiming VAT on a car (twice). That's all fine though, because it's digital so it must be right and it must be helping to reduce the tax gap..

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Replying to Yossarian:
Tornado
By Tornado
17th Dec 2022 11:28

A while ago I was told by someone (not a client) that they had claimed the full cost of a new van in the year of purchase (AIA) and also the writing down allowance, but I have no idea what was in the Accounts which could have been the full cost put through as Motor Expenses with a Depreciation Charge and perhaps some VAT claims as well. Who knows or will ever know.

Leave Accounting and Taxation to people who are not trained or qualified to do it, and the inevitable is going to happen.

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Replying to Tornado:
Morph
By kevinringer
17th Dec 2022 12:01

Clients really struggle to understand capital v revenue, and what expenses are business and what are not. The following clients maintain their own accounting using software.

Client 1. The client has built a new farmhouse costing £200,000. They've reclaimed the VAT and accounted it as a property repair.

Client 2. They constructed a new milking parlour at a cost of £150,000 for the structure and £300,000 for the machinery. They've posted the entire cost to repairs. They've also bought a new tractor costing £100,000. They've posted that to repairs.

Client 3. The farm is run by husband and wife: the partnership is registered for VAT. The wife inherited a house which she is going to run as a holiday let outside of the farm business. She has paid £100,000 to renovate the house. The client has put all the expenses through the farm business, reclaiming the VAT and categorising is as property repairs.

This is the world that HMRC seems to be striving for. HMRC don't seem at all concerned about the accuracy of digital records. HMRC are happy with rubbish as long as it is digital rubbish.

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