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Ambitious MTD timeline hampered by Brexit

30th Jun 2016
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HMRC’s long awaited consultation documents on Making Tax Digital still haven’t appeared, further endangering the tax authority’s ambitious digital tax timeline.

Based on the assumption that the government still wanted to get quarterly reporting rolling for income tax and NICs in April  2018, the expectation had been that HMRC's making tax digital documents would be released this week to help meet that deadline. But AccountingWEB understands the documents will now only be released later in July.

The progress of the MTD project is turning into an epic to rival Game of Thrones. The initial consultation documents were expected to accompany the March Budget, but after some backroom doubts were raised, they didn't make it. The delay was lengthened when the Panama Papers scandal took priority over the digital initiative. Then as the EU referendum campaign swung into action, 10 Downing Street imposed a purdah that stopped almost all Whitehall communications - including potentially controversial consultation documents.

Despite the enduring radio silence, Rebecca Benneyworth, tax expert and member of HMRC’s digital advisory group, is hopeful that we’ll see the ball rolling in the next few weeks. Among 40 consultation documents reportedly awaiting release are six relating to MTD. Further consultations from other government departments are expected to follow.

The MTD vibes emerging from Whitehall are still positive, but with the latest delay the digital initiative's timeline now seems more ambitious than ever. “If we could’ve gotten the consultation documents before the Budget, we’d be now starting to build,” Benneyworth told AccountingWEB at the TaxCalc Smart Practice event in Farnborough this week.

“It’s not HMRC’s fault that politically it was decided not to do it before the vote but they’ve got an even bigger mountain to climb now.

“We’ve got three months to talk about it, but by then we’re already into the autumn. That’s very late to start building stuff.”

Ready to roll

Mercifully, this should be the final delay before we finally get a good look at the MTD project plans. “There are all sorts of internal wrangling and machinations before HMRC will decide what consultations will come out and when,” said Benneyworth.

“But HMRC has got a stakeholder event in the third week of July, they’re bound to want the consultation documents out before that, so that they can do a little bit of litmus testing.”

There had been rumours that the consultation documents would be released all at once, but indications are releases will be staggered in order of importance. “Frankly there are some areas we don’t need to sort out now,” said Benneyworth.

Most important, she added, is figuring out the basic principles of the digital proposals to help software vendors understand what software to build and how to build it.

“If I was HMRC I’d be thinking about what’s the urgent stuff, what do I want people to discuss over the summer and then the rest can follow.”

See the full interview with Rebecca Benneyworth below:


Replies (9)

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By petersaxton
02nd Jul 2016 07:28

I would have thought the first thing HMRC would want to do is explain why they want to introduce quarterly reporting. Once they do that then people can start to think about recommendations.

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By MartinLevin
02nd Jul 2016 10:11

I agree with you, Peter. When I did my tax training (a few decades ago), we were encouraged to understand "why" in all aspects. That way, we could understand what was intended.

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Locutus of Borg
By Locutus
02nd Jul 2016 15:12

Yes, Peter and Martin. That is an absolutely fundamental question that I have never seen answered by HMRC.

It is not unreasonable to assume that the ultimate intention is to collect tax quarterly too. If that is the case, then quarterly reporting is an extremely cumbersome way of achieving that objective.

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Replying to Locutus:
By petersaxton
02nd Jul 2016 18:11

Yes, there's no point reporting quarterly, It would make more sense to have quarterly payments on account instead of six monthly based on annual reporting.
When I went to a meeting with HMRC at a Digita conference the HMRC people were unable to say anything useful. They just kept babbling to run the clock down. This is a total shambles.

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Replying to Locutus:
By ming_the_reasonable
03rd Jul 2016 19:57

Yeah, I think that's where it's heading. No new taxes or tax hikes of any significance... just get existing taxes in earlier.

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By Marion Hayes
04th Jul 2016 07:09

I wanted to look at Rebecca's interview but despite it saying look below: I can't see how to

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Nigel Harris
By Nigel Harris
04th Jul 2016 10:59

Ming - you'd have thought so, but the HMRC speakers at the Digita conference were at pains to point out that MTD is only about reporting, annual or 6-monhtly tax payment dates will remain as they are. So quite what the point is I have no idea.

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By Tom 7000
06th Jul 2016 12:23

In some countries they report electronically monthly. If you make a loss 2 months in a row a tax/business advisor visits to see whats going on....

Its just different in different countries .

But as you pointed out its about getting money in quicker

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By AndrewV12
17th Nov 2016 15:33

Stepping back from it, and bearing in mind sole traders make POA's, after the first years additional receipts (if tax is to be also paid Quarterly) with all things being equal, the additional tax raised from the scheme will have gone.

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