After what seems like an age (or an incredibly short space of time if you’re a software developer) HMRC has launched its MTD pilot programme.
The initial stage of the pilot tests the process of adding taxpayers to the MTD platform. The trial is aimed at taxpayers who have either a single sole trader business or a UK rental property (or both). For sole traders, the current accounting period should have started on or after 6 April 2017, although HMRC has indicated that those with a 31 March year-end can also be included.
Taxpayers with income from any other sources can’t enrol for the pilot scheme, something that I’m sure will be a disappointment to many.
The signup process itself is conducted on HMRC’s website, with users walking through a simple series of questions. These questions are:
- the types of income received by the taxpayer - i.e. is it from a sole trader business, a UK rental property or both
- whether you have income from any other sources (a “yes” answer here will mean you can’t enrol for the pilot)
- whether your current accounting period started before 6 April 2017 (again a wrong answer will exclude you from the pilot)
- the start and end dates of your current accounting period
- the name of your business (or your own name if no business name)
- whether you use cash or accrual accounting
- whether you accept the terms of participation
The terms of participation are fairly simple, with the user agreeing to provide the quarterly summaries and an end of period statement (all through third-party software), either themselves or via an agent. They also agree to let HMRC know if they’re unable to meet these commitments, and accept that HMRC can remove them from the pilot if they don’t remedy a prolonged failure to submit these returns.
It seems HMRC had one or two technical hitches delaying the big launch for a few hours. All participants must have a government gateway account, and this also led to some teething problems both from users and from HMRC. Taxpayers need to know their login details (something that itself may be an issue), and some users have more than one gateway account covering different taxes or no taxes at all. So it was a challenge gathering the relevant and correct information, and HMRC’s system rejected some of the gateway credentials without providing much in the way of feedback.
However we battled through and registered our first participant mid-afternoon. The ID received from HMRC’s system suggested they were third person to successfully sign up for the pilot.
So what’s next?
HMRC is starting in a cautious mode, implementing what it describes as a “controlled go live” roll out. Initially they’re working with software suppliers to register a maximum of 15 taxpayers per day for the first two weeks and, if this goes well, to then remove or increase this limit. HMRC is hoping to open the process to taxpayers more widely in mid-May, including promoting the signup link on the GOV.UK website.
The testing of quarterly submissions - what most accountants consider to be the main point of the pilot - is due to start in May. And presumably it will be July or August before the quarterly updates start trickling into HMRC’s system.
There is also a parallel process of testing the agent signup process. HMRC considers this to be less straightforward, and are visiting a small number of accountants to walk them through the enrolment process. More details will follow on this aspect of the pilot.