Save content
Have you found this content useful? Use the button above to save it to your profile.
chinese dragon | accountingweb | chinese new year and tax
iStock_oneclearvision_dragon

A new year but how long will MTD delays drag on?

by

While celebrating the Lunar New Year, Amy Chin noticed parallels between the signs of the Chinese zodiac and issues in the tax world.

15th Feb 2024
Save content
Have you found this content useful? Use the button above to save it to your profile.

Many readers will, like my family, have celebrated the Lunar New Year last weekend. As we welcome in the year of the Dragon and share wishes of good fortune, health and prosperity a new year is an opportunity to reflect on the previous 12 months. Accountants also commonly observe 1 February as their own New Year’s Day, breathing a collective sigh of relief as they rise from the self assessment swamp.

There are many versions of the Great Race, the story of the Chinese zodiac, but the premise is broadly the same – 13 animals began the challenge to cross a rapidly flowing river, and their finishing positions determined the order in which they appear in the Chinese zodiac. 

Feline the pressure

First came the Cat. Those vaguely familiar with the Chinese zodiac may be concerned at this point about the credibility of this article – there is no Cat in the Chinese zodiac! The poor Cat began the race in true feline style, by cunningly jumping onto the back of the Ox. Alas, this strategy was short-lived as the miserable moggy was pushed into the water and carried away by the current, never to complete the course. 

The ill-fated Cat can be likened to the rumours that were rife that inheritance tax (IHT) would be cut in the 2023 Autumn Statement. We at AccountingWEB had high hopes for this and a team of writers, pens poised, were ready to cover the headline news: “Hunt slashes IHT”. 

On 22 November 2023, an entirely different tax break grabbed the limelight when the Chancellor announced reductions in national insurance across the board, including the all-but-abolishing Class 2 NIC for self-employed taxpayers. This bombshell pushed all thoughts of IHT cuts into the shadows, making it the Rat in my story, who pushed the Cat into the water and finished the race in first place.

On the podium

Of course, the Rat wouldn’t have got anywhere near poll position were it not for its vessel – the strong, dependable Ox. Like income tax, the backbone of any tax system, the Ox plodded calmly but swiftly across the river, earning a respectable silver in the race. 

Like most basic rate taxpayers, the Tiger toiled valiantly to keep up with the current. He swam hard and fast, working consistently to propel himself forwards but the drag from the water, like fiscal drag for so many, held him back and he arrived at the riverbank, exhausted and bedraggled, in third place.

Next up we have the Rabbit. Hopping from stone to stone, the Rabbit was putting up a good fight, almost earning a spot on the podium until he slipped and fell into the water. As luck would have it, he managed to grab a passing log and floated to the bank in fourth place.

Rabbiting on

Avid AccountingWEB readers will be familiar with the rabbit in a hat analogy and basis period reform is the Rabbit of this story. Unlike its friend Making Tax Digital (MTD), basis period reform – buoyed by the software companies – has overcome minor setbacks such as the delay to MTD ITSA (income tax self assessment) and survived the transitional year.

The Dragon came fifth, despite his ability to fly making him the bookies’ favourite. His compassion and generosity kept him grounded, offering help to villagers and expelling a little puff of air to boost the Rabbit. We can relate the Dragon’s tale to the team of benevolent Tax Titans, headed up by Rebecca Benneyworth, who in the midst of a busy self assessment season donated time and resources, including free software, to help subpostmasters who were victims of the Horizon scandal.

Snaking along

Sixth place would have gone to the Horse were it not for the clever Snake who wound himself around the Horse’s leg, startling him and sending him back to seventh place. The Snake represents all the dodgy tax avoidance schemes, notably less tax for landlords and property 118 that have been scuppered by Tax Policy Associates founder, Dan Neidle.

Neidle probably deserves a higher ranking in the world of tax than sixth place, but that’s just how the analogy works, sorry Dan, and to be clear I’m not calling you a snake. (Incidentally, if Wikipedia is to be trusted I believe Neidle is an Ox, so we have that in common.)  

The next three animals worked together and reached the riverbank concurrently on a raft. The Goat (or Sheep), the Monkey and the Rooster are represented here by the High Income Child Benefit Charge (HICBC), IR35 and mixed-use properties for stamp duty land tax (SDLT), collectively keeping the first tier tribunal and upper tribunal very busy over the past 12 months.

Dogged delays

HMRC’s self assessment helpline was closed for three months from June until September 2023, to much dismay and understandable outrage among taxpayers and their agents. Rather like the Dog, who stopped to take a bath partway through the race, this puts the helpline close to the bottom of the leaderboard. Unlike the self assessment helpline, the Dog was an otherwise strong swimmer and would no doubt have ranked higher without the comfort break. 

Bringing up the rear, the lazy, greedy Pig. Gobbling up valuable resources but moving at a snail’s place, plagued with delays and setbacks, the Pig got there in the end after a meal and a long nap.

No prizes for guessing where I’m going with this, but the Pig did at least finish the race. But the jury is still out on our old friend MTD ITSA.

Replies (18)

Please login or register to join the discussion.

avatar
By GHarr497688
15th Feb 2024 15:27

Looking at the filing if Self Assessment tax returns in Jan 2024 and delays in filing , the letter ICAEW sent to HMRC about performance , the bad press on Horizon and the delays and cribbing about MTD for years I will be amazed if the project is not cancelled or a complete disaster should it go ahead . Time will tell. Luckily I won't one a part of the fiasco.

Thanks (6)
avatar
By FactChecker
15th Feb 2024 17:10

I believe the Pig has now hired a reputation protection lawyer.

Comparison with MTD ITSA is an odious slur, and damages (on behalf of porcines everywhere) will be sought when their snouts are extracted from the trough for long enough to make a statement.

Thanks (7)
Replying to FactChecker:
Tornado
By Tornado
15th Feb 2024 22:52

I wonder if MTD will become a vile banned word and get added to the swearing filter on AWEB and never get printed again.

Thanks (3)
Replying to Tornado:
avatar
By johnjenkins
16th Feb 2024 14:54

Now your talking. Love it.

Thanks (2)
avatar
By AdamJones82
16th Feb 2024 07:59

I’ve always thought of MTDfIT was akin to the Emperor’s New Clothes fable.
HMRC and cloud software companies parading it as fantastic whilst the public were saying “but….it’s unworkable”
And seeing that this was originally announced by George Osborne and the only progress is we submit VAT box 1-8 figures via a different portal (WHAT a waste of money) it is time to put it down

Thanks (8)
avatar
By Mr J Andrews
16th Feb 2024 13:51

Harra's MTD year must surely be the snail. Or dead slug.

Thanks (3)
avatar
By johnjenkins
16th Feb 2024 14:59

Amy is this article your spin on wit? (No offence was meant in this comment).

Thanks (1)
Replying to johnjenkins:
photo
By Amy Chin
16th Feb 2024 15:57

Would you mind explaining what you did mean please? I've probably missed the point but it's difficult not to take offence without context to your comment.
Thanks!

Thanks (1)
Replying to Amy Chin:
avatar
By Mentinor
16th Feb 2024 16:29

maybe dont be so sensitive , if you publish you should expect rhetoric not blind submissive agreement. actually i find the pig analogy you used very offensive to pigs , they are very intelligent , they do not eat their own excrement as is widely held out, the reason they appear dirty is they roll in mud in the heat because they have no sweat pores, and they are very protective of their young.
so maybe toughen up a little like the pig has

Thanks (2)
Replying to Mentinor:
avatar
By Postingcomments
16th Feb 2024 16:42
Thanks (1)
Replying to Mentinor:
photo
By Amy Chin
16th Feb 2024 16:54

Not sensitive, just intrigued as the comment seems to contradict itself so I wondered whether I'd missed something. Perhaps it was just johnjenkins' spin on charm.

FWIW I'm well aware of the intelligence of pigs which is why I don't eat them :-)

Have a lovely weekend all!

Thanks (1)
Replying to Amy Chin:
avatar
By FactChecker
16th Feb 2024 18:49

"Perhaps it was just johnjenkins' spin on charm" ... that's an abrupt diversion into the world of quantum physics, Amy!
Mind you, spinning quarks also include strangeness as well as charm amongst their flavour properties - so you may be onto something.

Thanks (3)
Replying to Amy Chin:
avatar
By Rob Swan
18th Feb 2024 12:01

Isn't that the point? Doesn't everything about MTD contradict itself? :P

Thanks (1)
Replying to Amy Chin:
avatar
By johnjenkins
19th Feb 2024 09:52

There you go, Amy, you answered your own question. Hope you had a great weekend.
Getting back to the eating of pigs. It amazes me that the eating of certain animals, and indeed the roasting of said animals have strong religious connections.

Thanks (0)
avatar
By Mentinor
16th Feb 2024 16:15

if MTD actually happens , madmen will then be running the tax asylum

Thanks (1)
Replying to Mentinor:
avatar
By Paul Crowley
19th Feb 2024 17:21

No change then

Thanks (1)
avatar
By Rob Swan
18th Feb 2024 12:11

Oh... the lamentable fate of UK Govt. three character acronyms... DTF (Destined to Failure? No. Dispicable Trashing of Funds!)

Thanks (0)
Replying to Rob Swan:
avatar
By FactChecker
18th Feb 2024 12:22

"three character acronyms"? Aah, TCAs ... understood.

Thanks (3)