I know it's nearly the weekend and no-one wants to

hear more about MTD ITSA ... but you might enjoy(?) a read of HMRC's latest "Research and Analysis"

Didn't find your answer?

The snappily titled "Newly registered Self-Assessment customers’ views on registration timing and timely payment" has a few 'interesting' bits in amongst the usual guff (that says nothing but takes a lot of pages to do so).

https://www.gov.uk/government/publications/itsa-registration-timing-and-...

.

The key 'findings' IMHO are, despite the tiny and probably well controlled sample, that:

* there is a woeful lack of even basic awareness/readiness of someone becoming liable for ITSA (due to becoming self-employed or a landlord, or starting to earn foreign income or income from dividends) for the first-time;

* they generally assume either that it will somehow come right on its own or seek help from their software supplier, but are generally unaware of HMRC being a source of assistance (e.g. tools) and unwilling to rely on them;

* there is passing reference to better behaviour and expectations from those with representation (but this isn't expanded upon for some reason);

* HMRC seem surprised (I almost said stunned) by some of these so surprising 'revelations'!

.

BUT then we get to the Recommendations - which seem to be the whole purpose of this charade.  And the game is given away (after all the usual references to the need for 'Raising awareness') by the following:

"Policy changes around ITSA registration and payment of tax:

To a large extent, the perceived benefits of paying tax based on in-year liability and more frequent payments mirrored each other.  To gain public support for the overall package of proposed changes, promote the following messages:

 - helps to avoid ‘nasty surprises’ as liability is closer to when profit was made, and more frequent payments mean smaller payments;

 - easier to submit accurate returns as using more recent data;

 - paying tax based on in-year liability means that profit and tax are more closely linked in the lifecycle of a business – meaning tax for profits in a ‘good year’ would not be paid during a ‘bad year’.

.

So the whole point is to "gain public support for the overall package of proposed changes" - namely "paying tax based on in-year liability and more frequent payments" ... which of course officially remains NOT one of the objectives of MTD!

Replies (9)

Please login or register to join the discussion.

By Duggimon
30th Jun 2023 11:45

So their recommendation is the one thing they have repeatedly been questioned on and have repeatedly said they will not be doing as part of MTD, despite each and every one of us considering it a main aim of MTD.

Quelle surprise.

Anyway, thanks Hugo for reading all that so I don't have to, it's always good to know what they want us to think they think.

Thanks (5)
Replying to Duggimon:
avatar
By swimmer
02nd Jul 2023 21:58

https://www.change.org/p/scrap-quarterly-reporting-mtd

To sign up to the petition to scrap quarterly reporting click on the above link

Thanks (0)
Replying to Duggimon:
avatar
By swimmer
02nd Jul 2023 22:00

https://www.change.org/p/scrap-quarterly-reporting-mtd

To sign up to the petition to scrap quarterly reporting click on the above link

Thanks (0)
Replying to swimmer:
By Duggimon
03rd Jul 2023 09:03

The government have sunk literal billions into MTD, this petition that has amassed 213 signatures in 20 days is probably not going to stop it, or even register on the radar of anyone in government with an opinion on MTD.

Thanks (0)
By ireallyshouldknowthisbut
30th Jun 2023 12:01

Lets face it, HMRC just think sole traders should all be on PAYE. And to be fair in many cases, they are right, and perhaps should deal with delivery drivers and similar to get them on PAYE with proper rights, and taxed at source. But that does require getting stuck in with status reviews etc. Currently it just seem to be "industry standard" in many area to pretend all your workers are self employed so you don't have to pay minimum way.

For everyone else, the solution remains, quarterly payments on account (perhaps accelerated a bit)

Those with brilliant software that works that out month to month through hugely brilliant an accurate forecasting of the year end result will be able to do that easily.

For everyone else, they can guess "a bit more than I think" and get a rebate.

Of course non of these suggestions would require spending a couple of billion on software, or creating a massive admin burden............so which will they pick.....

Thanks (5)
avatar
By NotAnAccountant2
30th Jun 2023 13:23

I do have to wonder if they're also intending to accelerate repayments.

As someone who is sitting on a something like 7K PAYE overpayment currently, (I've estimated will be around 4K owing to me at the end of the year when I do my tax return), I'd like to propose that HMRC first deal with PAYE tax on a monthly basis and get that right. After all, how hard can it be, the employer is giving them all the information they need to get it right.

Thanks (1)
Replying to NotAnAccountant2:
By Duggimon
30th Jun 2023 14:56

Woah there, RTI has only been in for eleven years, we're still in the soft landing period for HMRC where they iron out those first few bugs.

Thanks (1)
avatar
By amycollier2893
30th Jun 2023 14:36

Hugo, big thanks.
It has proved very convenient for the half yearly payments to have already been moved from the 1st of the respective months to the end. Quarters ended 30 June and 31 December already have payment dates waiting at the end of July and January respectively.
I have no objection to quarterly payments though some clients will miss the thrill of the Premium Bond draw. A few clients pay early when cash flow allows anyway so as to 'not get into trouble'.
Thing is, once again, all this can be done and is occasionally already happening without MTD. It is not quite 'in year' but it is a worthy balance because only the roulette wheel of cash accounting will get them over the line with that.

Thanks (1)
Ivor Windybottom
By Ivor Windybottom
30th Jun 2023 16:01

If HMRC had been honest and had told us that they want the tax quarterly and sooner we could have had a sensible debate, agreed MTD was not needed and just paid a quarter of the PY's liability for 3 quarters, with a final actual quarter.
Billions saved. A little more tax paid earlier and no excessive admin all round.

Who is running this from the government end? Why are all the civil servants not standing up for some common sense and simplicity?

Where's my coat?

Thanks (3)