Brexit: HMRC chief exec warns of project delays

HMRC
iStock_ViolinConcertono3
Share this content
Tags

HMRC’s ambitious transformation plans are facing delays as government officials scramble to get the UK ready for Brexit.

In a letter to the Public Accounts Committee Jon Thompson, HMRC’s chief executive, explained that Revenue officials are currently deciding on which projects to delay or stop altogether, as resources are redeployed to work on Brexit.

“Basically, Thompson is turning around and saying to the government, ‘we already have so many projects to deliver and now Brexit has been dumped on us’,” said Brian Palmer, tax policy adviser and Making Tax Digital (MTD) lead at the AAT. “He’s asking for more money, and he’s asking the government to be realistic.”

The forecast for MTD for VAT would appear murky. The multi-year project has a well-documented history of being beset by delays. Mandatory quarterly reporting was earmarked to start this month - April 2018 - but was delayed in 2017 until “at least 2020”.

But Palmer waved away any doubts about the long-term future of the project. “They’re still clear, as MTD is the big show in town they want to deliver on. One or two of the services around it that aren’t so mission critical might not come online as soon as was promised.

“MTD itself will go on. They’re waiting on the success of the pilot, get the green light from Mel Stride and then get on with the rollout. The core services will all come in on the timescale we’ve talked about. But secondary support services that would be nice to have may be longer in delivery.”

An HMRC spokesperson confirmed to AccountingWEB that there’s been no change to MTD’s delivery timeline. “MTD will be mandated for VAT for those businesses with income above the VAT threshold from April 2019, as planned. Preparations for MTD are progressing well, with pilots underway for both VAT and Income Tax,” they said.

But between MTD and resources being redirected to focus on the UK’s post-EU customs operation, it seems clear that delivery of HMRC’s 267 projects will be staggered. Thompson confirmed that the review of HMRC’s “transformation programme” that will decide which projects get delayed or scrapped has already happened.

“The review prioritised on the basis of seven criteria and included all 267 projects that were in flight, or planned by September 2017, including all envisaged Brexit programmes,” wrote Thompson. “We also took a very clear view on the capacity and capability of HMRC to deliver and the risks associated with a programme as large and complex as this.”

Thompson promised he would update the PAC as soon “as final decisions have been taken”.

“At this stage I can say that we have proposed a number of projects which should stop, or not start and a number which should be stretched out over a longer time scale. I hope that we can provide further transparency of the detail of this in due course.

“Our assessment is that if these changes are agreed then the resultant portfolio is deliverable, with appropriate level of risk. Also, that we have the capacity and capability to deliver it, or can obtain those capabilities in an appropriate timescale.”

According to Palmer, it’s a prudent move. “If they have an already ambitious order book of projects. It’s a really sensible approach to take such a review in light of what was always going to be a challenging workload.”

About Francois Badenhorst

Francois

I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter. 

Replies

Please login or register to join the discussion.

avatar
17th Apr 2018 06:51

Nicely softening them up for saying "We can't do MTD yet due to Brexit."

Thanks (3)
avatar
to mr. mischief
17th Apr 2018 10:56

3 cheers for Brexit, then

Thanks (11)
avatar
17th Apr 2018 11:47

Yes, I would have voted Brexit if I had known it would torpedo MTD!

Thanks (11)
to mr. mischief
26th Apr 2018 10:14

mr. mischief wrote:

Yes, I would have voted Brexit if I had known it would torpedo MTD!

Actually, I did hoping it would!

Anything to throw a spanner in the works of statist meddling with things they are intellectually incapable of understanding.

Thanks (4)
avatar
By RobertD
to Nick Graves
26th Apr 2018 12:22

Nick Graves wrote:

mr. mischief wrote:

Yes, I would have voted Brexit if I had known it would torpedo MTD!

Actually, I did hoping it would!

Anything to throw a spanner in the works of statist meddling with things they are intellectually incapable of understanding.

I did too.

Thanks (1)
avatar
to RobertD
26th Apr 2018 13:03

I voted brexit because we couldn't deport a national security threat and our country doesn't have the infrastructure to handle 300,000 net immigrants every year and the EU sticking their noses in where it's not wanted just cos they can etc.etc.etc. However the postponement of MTD would be the icing on the cake.

Thanks (2)
avatar
17th Apr 2018 12:53

oh dear, how sad, never mind.....

Thanks (7)
avatar
18th Apr 2018 08:47

Brexit, the snow...there is always something to blame for one's failings. Thing is, a lot of people don't care why a person has failed - only that they have. It really is much easier just to succeed and go off and celebrate while the failures stammer out their excuses. Sean Connery put it better in The Rock

Thanks (1)
avatar
19th Apr 2018 09:59

Well, well, well. Is this something we weren't aware of?
HMRC do now have a face saving opportunity so do what we have all been saying and that is not to make MTD mandatory and bring it in over the next 5 - 10 years. So Mel, balls in your court. I like Sean Connery but I prefer Dwayne Johnson.

Thanks (3)
avatar
26th Apr 2018 10:13

HMRC's MTD excuses are still about as convincing as the reasons you gave for not handing in your homework.

"Write 100 lines - I must not blame Brexit for my own failings."

Thanks (2)
avatar
26th Apr 2018 10:16

Brexit , govt. cuts to HMRC staffing , inability to engage contractors owing to IR35 legislation , absurd dumb stupidity with MTD in the first place; Jon Thompson could have got his retaliation in first with a number of excuses.

Thanks (2)
avatar
26th Apr 2018 11:55

“Our assessment is that if these changes are agreed then the resultant portfolio is deliverable, with appropriate level of risk. Also, that we have the capacity and capability to deliver it, or can obtain those capabilities in an appropriate timescale.”

This is a very important comment by Thompson. What on earth is an appropriate level of risk? Either a system works in accordance with the law or it doesn't. The taxpayer , and by extension their agents, are supposed to get everything 100% right with the onset of MTD, but HMRC thinks that there is a risk that things can go wrong from their own perspective. Forget the whole thing, don't just even delay it for 5-10 years! Get your house in order and fit for purpose before contemplating this horrendous change to record keeping. And show a bit of respect to the taxpaying public (and accountants).

Thanks (2)
avatar
By djtax
26th Apr 2018 12:52

....and still no news for all those smaller businesses (VAT Regd with turnover over around say £100K to £250K) who rely on spreadsheets (and does anyone at HMRC realise how may thousands there are out there!).

Yes HMRC are committed to allowing use spreadsheets to continue but are 'still in discussion' with software providers to come up with a solution ('bridging software'). None yet exists - we accountants will need some time to assess it when it does come on the market, before we can advise clients what to do, before they can get familiar with it .... and all ready for MTD for VAT implementation April 2019!! Or do we have to assume HMRC will renege on their commitment re spreadsheets and force all our smaller clients onto Sage, Xero et al asap (which are not always a better solution for those clients).

Thanks (1)
avatar
26th Apr 2018 22:42

The article shows two dates are they for the same MTDfB?
"The forecast for MTD for VAT would appear murky. The multi-year project has a well-documented history of being beset by delays. Mandatory quarterly reporting was earmarked to start this month - April 2018 - but was delayed in 2017 until “at least 2020”"

“MTD will be mandated for VAT for those businesses with income above the VAT threshold from April 2019, as planned. Preparations for MTD are progressing well, with pilots underway for both VAT and Income Tax,” they said."

Thanks (0)
avatar
27th Apr 2018 08:50

I think it's a foregone conclusion that mandatory MTD will not be brought in for the under £85k mob until the vat MTD is running properly - I'm pretty sure Mel said that somewhere.
The pilot voluntary MTD for under £85k started this month and agents have been urged to take part. The seminars that HMRC are doing at the moment are really interesting cos reading between the lines they are highlighting the difficulties that business will be facing. The one that springs to mind is the software and cost. Will affordability be a reasonable excuse for not joining?

Thanks (0)
avatar
27th Apr 2018 19:34

Why has it taken them this long to work out they may have an awful lot of work to do around Brexit? Are they all on a different planet?

Thanks (0)
avatar
27th Apr 2018 19:34

Why has it taken them this long to work out they may have an awful lot of work to do around Brexit? Are they all on a different planet?

Thanks (0)
avatar
28th Apr 2018 13:26

I am waiting to see the fiasco that MTD produces. There will be excuses dressed up as 'explanations' and it will always be some other beggar's fault.

One thing we accountants have learnt, or should have - IT and HMRC are like oil and water. I bet it will be a good few years before MTD is in an acceptable form.

Thanks (0)