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HMRC freezes MTD response until New Year

23rd Nov 2016
Practice Editor AccountingWEB
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While further details on HMRC’s Making Tax Digital (MTD) were conspicuously absent from the Chancellor’s Autumn Statement speech, a single sentence buried within the policy paper revealed when the government is set to publish its consultation document response.

“In January 2017, the government will publish its response to the Making Tax Digital consultations and provisions to implement the previously announced changes,” the government revealed five chapters deep in the policy paper.  

By this time, HMRC should have sifted through the 3,000 responses it received to its MTD consultation documents.

Although the Chancellor did not explicitly discuss MTD during the Autumn Statement, he did announce a £1bn investment in full-fibre connections and future 5G communications by 2020-21.

The full-fibre network would serve the government’s pledge to roll out superfast broadband to support its MTD regime. The Autumn Statement claims this investment will create more reliable broadband for homes and businesses. The government said in the Bringing business tax into the digital age consultation document that 95% of taxpayers will have access to superfast broadband by 2017.

Those hoping the Chancellor was going to announce a relaxation in the timetable or, at the least, an update were left disappointed on AccountingWEB’s live Autumn Statement panel discussion.

AccountingWEB member NH added: “Just some certainty on MTD is all I ask, if it is to be April 2018 fine, but we need to know now.”

Tax writer Wendy Bradley questioned the affect that the January update will have on its already tight timeline: “I'm not convinced MTD is deliverable in the timescale envisaged, and it would have been good if he had admitted that now and stepped back a bit.”

Steve Cox, senior product director at IRIS software, voiced the frustrations felt by accountants hoping the Chancellor would offer more insight during the Autumn Statement.

“With HMRC’s response to the recent Making Tax Digital consultation period not expected until January, accountants and their clients remain uncertain about what lies ahead. Will the April 2018 deadline remain? Have there been any major amendments as a result of accountant feedback?”

“By failing to answer these questions, the Chancellor has increased the fear of what lies ahead and negativity towards the mandate. The longer the industry is given to prepare for Making Tax Digital, the smoother the transition will be, so many will hope the next announcement comes sooner rather than later”.

Meanwhile, AccountingWEB member Stuart Miller said on Any Answers: “I was told by HMRC that they didn't want to make any mention to MTD so quickly after the consultation period as it would look like they had already decided what they were going to do regardless of the feedback provided and wanted to actually analyse the feedback from the consultation.”

Finally, the question remains: With the consultation response arriving at the end of January, will accountants distracted by self assessment season actually take any notice of the response?

Replies (7)

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By SWJWBA
24th Nov 2016 11:48

The reason HMRC ....."didn't want to make any mention to MTD so quickly after the consultation period as it would look like they had already decided what they were going to do regardless of the feedback provided and wanted to actually analyse the feedback from the consultation" - is precisely that. THEY have made their mind up but don't want us to know that! Do they think we are stupid?

Mind you I suppose they could not win either way could they! BUT!!!!!

1) Software is not ready.
2) We (accountants) are not ready as we do not have enough detail to sensibly plan the change.
3) Clients don't know too much yet because we are concerned about "putting the frighteners" on our clients in terms of time and cost.
4) HMRC are definitely not ready. ( P800's for people already in self assessment is not really joined up thinking is it!).
5) Broadband/internet structure in the UK is not ready.
6) Any more???

They need to wait and then get it right when everything is in place. Then it may benefit everyone! (We hope).

Thanks (7)
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By cstwragby
24th Nov 2016 17:11

How the hell do they expect to announce the full details of such a major change and for it to be enacted 15 months later?!

Thanks (4)
Jennifer Adams
By Jennifer Adams
24th Nov 2016 18:49

As SWJWBA says - its a done deal as far as HMRC are concerned. They wont be backing off now and the fact that they are looking at 'January 2017' is the indication - is that the first week of Jan or the last when we are fighting to get returns in by the deadline? Do they hope we will be working so hard that we miss their response?
Assuming the 2nd week, delete Xmas/New Year hols for their staff and that means a result in 6 weeks.
But we know the outcome already - MTD will be happening the way HMRC say.
The time for us to say our bit has gone. More should have been said at the beginning by representative bodies. From reviewing previous consultation documents the comments made by the 3,000 will be ignored.There will be some tinkering around the edges but thats all. Its the comments made by the software suppliers that we should be looking at now.
Unless, of course, you are thinking of selling up within the next few months - if so then you wont be interested.

Thanks (3)
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By North East Accountant
26th Nov 2016 12:19

MTD is the biggest change to the tax system ever.

We'll (hopefully) find out the details in Jan 2017 and it goes live in April 2018.

What could possibly go wrong!

Thanks (3)
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By Red1960
28th Nov 2016 14:17

MTD - welcome to the cash economy folks.

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PJ
By paulgrca.net
29th Nov 2016 13:16

Oh yes January announcement - it's not as though we have anything else to do!

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By Rangith Athauda
20th Dec 2016 15:37

MTD is an absolute joke.
No internet at busy time of the year. How many times the Revenue Website was down last year. Treasury can afford millions of tax payers money to put it right. We are small accountants working hard with our clients to comply.
OTS can make total destruction of the tax system and principles involved over the years. It took ages to get it going. Revenue & Customs expected to loose many more billions in taxes by changing the systems in a period of economic uncertainty. No need of tax books of specialists.
MTD is supposed to overcome the problem. Joke???

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