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A photo of Craig Oglivie, Paul Aplin, Rebecca Benneyworth and Emma Rawson
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HMRC to kick off MTD ITSA testing on 22 April

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HMRC called on accountants and bookkeepers at the Festival of Accounting & Bookkeeping to join the private beta for Making Tax Digital for income tax self assessment from next month, while also acknowledging the challenges of implementing the digital project so far.  

15th Mar 2024
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HMRC took to the stage in the final session of day two of the Festival of Accounting & Bookkeeping (FAB) to announce that the private beta for Making Tax Digital for income tax self assessment (MTD ITSA) will go live from 22 April 2024 for those with an annual income over £50,000, before mandation in April 2026. HMRC will then extend the scheme to those with an annual income over £30,000 from April 2027. 

“It is now imperative that we expand our testing. This is our opportunity, not only for HMRC to make sure our systems work, it is the opportunity for all of us to help our businesses get ready for the future,” said Craig Ogilvie, the programme director of Making Tax Digital, who was also joined on the panel by tax luminaries Paul Aplin, Rebecca Benneyworth and Emma Rawson. 

Ogilvie emphasised to the attendees at FAB that MTD ITSA is “going to happen” and “we want you to help us make it happen”. 

Join the beta band

Agents looking to get involved with the testing were advised to get an agent services account, then from there it’s a case of selecting compatible software. Ogilvie said there are currently five software developers submitting to have software ready for the beginning of the testing period from 22 April, and with HMRC working with a range of other developers, he expressed confidence that the “diversity in the software market will grow”. 

He said the private beta from 22 April will be for a cohort of just over 1,000 taxpayers so they can test the quality of the service before the testing is opened up to a public beta from April 2025. 

Taxpayers unable to take part in the first phase include those that need to declare high-income child benefit, married couples allowance, pensions schemes and an overdue debt to HMRC. 

The elephant in the room

Ogilvie joined the MTD project six months ago, having previously delivered the furlough scheme during the Covid pandemic. He started the session by addressing the “elephant in the room” and accepted that things “haven’t been perfect in the past”. 

However, he highlighted how the changes announced since the Autumn Statement, and the subsequent tweaks in February to move the deadline for the quarterly update from the fifth day to the seventh day each month to align with VAT, have made a difference. 

“It’s clear that not everyone will agree with every part of the policy. And I want to start by saying I’m okay with that. Everybody’s got different views, and I respect your views on that.

“A lot of people will have had a challenging experience with Making Tax Digital – agents, bookkeepers, software developers. I think it’s right – before I give you my version of what the world can be like – to be respectful and acknowledge that there have been deferrals and we’ve not quite got to where we wanted to in the past with Making Tax Digital. I think it’s only right to recognise that.”

Rationale for MTD beyond the tax gap

The session took questions from the audience, which varied from the agent services account to multiple agents and the rationale behind the programme. 

As for the latter, Oglivie acknowledged that the fundamentals of MTD are to reduce error through up-to-date digital records, but also to move to more sustainable systems at HMRC. 

Adding his thoughts to this point, Paul Aplin said: “We all get hung up on the quarterly return part, but the bit we don’t talk about at all – and I think we should – is the fact that loads of tax information is on legacy systems. It’s in different places and it’s really hard to join it up without using the accounting equivalent of using bits of string and tin cans.

“Part of the process of making tax digital is to shift income tax, national insurance, corporation tax and other taxes onto a single platform: the enterprise tax management platform (ETMP). 

“When that’s done, it’ll be a lot easier to tie up information on individual taxpayers, whether they’re people or whether they’re businesses and then we can start doing some adventurous things with the tax system to make it much easier for businesses or for individuals to see all their information in one place.”

And while Aplin’s view on digital records differs from that of HMRC, he recognises that keeping digital records closer to real time, means agents and taxpayers can do more interesting things with data and software.   

“Once we’ve got businesses using software, we can start thinking about nudges and prompts and things to help people get stuff right at the point of recording the transaction, not getting wrong-footed two years later when they get a tax inquiry.”

Adding another practical example, Rebecca Benneyworth said she recently found out that once the systems have moved over to ETMP, if you’re doing a tax return for a sub in the construction industry, the Construction Industry Scheme (CIS) tax will be live real time populated and agents will be able to see it. 

Multiple agents

Another attendee asked about the current status of multi-agent access. Oglivie confirmed that HMRC is getting a lot of external help to “get it right”, but committed to delivering it in advance of mandation.  

Adding his thoughts, Aplin said that it’s important to recognise that the people who are doing the bookkeeping and quarterly returns on bookkeeping software will not always be the same people who are doing the finalisation and submitting the return. 

“It is absolutely mission critical that both sets of agents have access to the relevant parts of HMRC systems,” he said. “And that is something again, that we’ve all been banging on about for a very long time and we will carry on banging on about it until we actually see it going live.” 

However, Aplin shared that he felt reassured that HMRC will follow through with its commitment after he visited Oglivie at his office in Edinburgh earlier in January. 

“We had a three-hour conversation. It was totally candid. We talked a lot about multi-agent access. And as I was leaving the building, I walked past one of his colleague’s desk, and there on her screen was ‘multi-agent access’. 

“That was either the best stage management I have ever seen in HMRC. Or it actually gave me a lot of reassurance that [HMRC] really is dealing with this and [it has] got people on the case.”

Transformation is not easy

Rounding off the session, Ogilvie said that he wants to take the more senior people in HMRC out to business and spend time with bookkeepers and accountants. 

He said that he has people in his team who have worked in the industry and understand the challenges, but some don’t. “So we will learn and we’ll educate ourselves. And we’ll be as honest and supportive as we can throughout this, but this is going to happen and we want you to help us make it happen.” 

But he admitted that MTD, as one of the biggest digital transformations in the government at the moment, will continue to be “bumpy” because “true transformation is never easy”.

Replies (30)

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By ireallyshouldknowthisbut
15th Mar 2024 16:02

HMRC's aims are good in theory.........but its completely undeliverable in the real messy world.

The good bits of MTD, ie upgrades at HMRC' end can happen completely independantly of what happen at the client side which is, and should always be, the clients problem, not HMRC's.

Quarterly reporting is a dead project looking for a problem to solve.

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Replying to ireallyshouldknowthisbut:
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By AdamJones82
15th Mar 2024 20:04

Yes, all they need to do is upgrade their systems to the 21st century and ask people for quarterly payments on account.
Clients will then decide themselves if they want to keep their records up to date more often so their POA reflect the true position

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Replying to ireallyshouldknowthisbut:
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By FactChecker
15th Mar 2024 20:46

The problem is, and has been for over 15 years, that the only way to get attention within the higher echelons of HMRC is by appealing to their personal vanity ... which in terms of systems only gets traction (and so budget) for the bits visible to the public - not the groaning back-end databases and attempts to integrate data.

Think of it like finally having your own Flat and getting excited about how you can decorate it to impress your friends (but forget about the roof, supporting walls, structural timbers and so on ... they're boring aren't they?).
That's the approach and limitation that drives HMRC's adoption of technology ... and, back to the decorating analogy, they don't really like to 'waste time' on all that preparatory work - preferring to get on with the splashy visible stuff, even if it doesn't really do the job and quickly starts to flake away).
Ring any bells?

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Replying to FactChecker:
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By FactChecker
15th Mar 2024 21:04

And, even ignoring for now the fact that all the 'big issues' raised over the past several years are still 'being considered' (i.e. remain unresolved), the elephant is still firmly centre stage in the room ... there's no full Specification of the whole end-to-end process (for even the most straight-forward taxpayer).

Nice little anecdotes about things like multi-Agent access (which the missing Spec would have highlighted as a need within the first draft) are just distractions.
Important distractions, along with all the other barriers to widespread adoption, but that's just smoke and mirrors ... the core is still a jigsaw puzzle with presumed missing pieces (although no-one's sure because there's no picture of what the result should look like)!

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Replying to FactChecker:
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By adam.arca
16th Mar 2024 08:22

FactChecker wrote:

The problem is, and has been for over 15 years, that the only way to get attention within the higher echelons of HMRC is by appealing to their personal vanity

Yes, this.

Now that HMRC is no longer the Revenue we once knew and ever since it just became part of the wider civil service pulling managers in who haven’t the first idea about the tax system, it’s been infected by the civil service mantra of “let’s do nothing, let’s not rock the boat” at the bottom and by the “let’s not stay too long but must polish up my CV for that private sector job I want on retirement” philosophy of the higher ranks.

So, something “sexy” is exactly what they want. But mustn’t stay to see it through because, then, might be pinned for some of the blame.

To extend your decorating analogy into the fabric of a building, the whole thing is a castle built on sand with absolutely no preliminary spadework, no foundations whatsoever and no blueprints to indicate where they’re going.

Like anyone else, I could talk utter horlicks about how to progress a building project but would be called out as a blagger straight away by the builders. Why is it, then, that the software industry works another way?

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Replying to adam.arca:
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By Rob Swan
17th Mar 2024 08:56

'things “haven’t been perfect in the past”. '
AND!! as before, the answer is just kick the can down the road a bit...
So, all in all, that's the best indicator of things to come...
This is public money wasted on vanity projects for personal gratification....
What if all the money wasted (in all Gov't/Civil Service/Public Sector) was taken from Civil & Public Service & MPs pay, spread across the board, and deducted from payroll, starting at the top, and not moving down a level until the actual (higher level) pay reaches that of the level below, and so on.... Will never happen, but a nice idea methinks ;)

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Replying to ireallyshouldknowthisbut:
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By robertmmatthews
18th Mar 2024 09:54

I agree with Adam Jones comments 100% but that would be too simple a solution for the Revenue to swallow. When will HMRC listen to the professionals - MTD quarterly reporting is not deliverable. It would serve no real benefit to the tax payer, it would increase business costs and would be a distraction to the person(s) running their business. The only people it advantages are the software writers and the professionals employed in delivering their services. I'm so pleased I'm long since retired.

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Replying to ireallyshouldknowthisbut:
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By robertmmatthews
18th Mar 2024 09:54

I agree with Adam Jones comments 100% but that would be too simple a solution for the Revenue to swallow. When will HMRC listen to the professionals - MTD quarterly reporting is not deliverable. It would serve no real benefit to the tax payer, it would increase business costs and would be a distraction to the person(s) running their business. The only people it advantages are the software writers and the professionals employed in delivering their services. I'm so pleased I'm long since retired.

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By Rob Swan
15th Mar 2024 16:25

"kick off" - methinks that's invetable: someone, somewhere, somehow....
Struggling to work out why HMRC didn't go for April 1st - we'd all get the joke!

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By PAULLEWISFCCA
15th Mar 2024 17:53

the sooner this corrupt money printing regime collapse the better

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By AdamJones82
15th Mar 2024 18:16

Ogilvie emphasised to the attendees at FAB that MTD ITSA is “going to happen”. Best joke I've heard in ages.

How the hell can 1000 people (if they even get that many) be a meaningful proper test. And public testing within the 12 months before launch? Gives no time whatsoever to make changes.

FIVE software developers with products. WOWEEEE

They're making it up as they go along

"we can start doing some adventurous things with the tax system" - how about getting the current one to a workable, serviceable standard? HMRC can't cope.

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Replying to AdamJones82:
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By FactChecker
15th Mar 2024 20:54

Has anyone explained to Ogilvie the meaning of the 'Boy Who Cried Wolf' fable?

That if you just keep repeating the same thing (which each time fails to happen), then you aren't 'reinforcing' your message ... you (and the message) just become a laughing stock.
Oh, and when your latest failure leaves you in deepest doo-dah (or the wolf's jaws) ... your final thoughts are likely to be 'if only I'd told the truth then maybe people would want to help me'.

It would be funny (in a cruel way) to watch this project unfold towards it's latest failed deadline ... if it wasn't for the fact that it may well take HMRC (and so the Nation's revenue gatherers) beyond the brink. Selfish I know, but I'm out!

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By Refs1
15th Mar 2024 19:10

As a profession I will not be engaging on this matter. Already starting to form limited companies for clients that this may affect.

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Replying to Refs1:
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By petestar1969
18th Mar 2024 12:12

Have you told them their P&L accounts may need to go on public record?

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By Open all hours
15th Mar 2024 20:05

800K+ phones not answered in January and they have the nerve to reheat this stuff.
Where’s the reply to my letters from last September?
Faith, hope and charity almost exhausted

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Jennifer Adams
By Jennifer Adams
18th Mar 2024 10:58

Only January Openallhours?

Try Oct last year. Plus AAM twice -acknowledgement nothing else

My client has been waiting 2 years for a tax refund. A Loan charge victim (note the word 'victim')

My heart sinks whenever whenever there is a Accweb mention of MTD (or any mention anywhere come to that). I can barely bring myself to read the text (well written though it is!)

Hands up who is going to take 'advantage' of this beta (no.. thought not)

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By Self-Employed and Happy
18th Mar 2024 11:24

All this says to me is that they have no intention of sorting out the actual problems at HMRC, the fact that I have issues I can't sort out because I can't actually speak to anyone, on the odd occasion I do they can't help and refer to another department who does nothing.

HMRC are in my opinion destroying the integrity of the accounting profession.

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By moneymanager
18th Mar 2024 11:57

A better idea,,'it's time' to stop building our digital prison, analogue, analogous to freedom.

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By petestar1969
18th Mar 2024 12:03

Join the beta test? Let me think about it................NO!

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Morph
By kevinringer
18th Mar 2024 13:21

"HMRC to kick off MTD ITSA testing on 22 April"

Deja vu all over again - checkout https://www.accountingweb.co.uk/tech/practice-software/mtd-pilot-offers-... from 7 years ago. HMRC are no further forward. The purpose of a pilot is to test. The fact that the 1 year test started 7 years ago should tell HMRC that MTD is a failure. But HMRC can't accept this because HMRC seems to think MTD is the reason HMRC exists and HMRC needs to show something for the £1.3 billion HMRC has wasted on MTD whilst HMRC's non-MTD services collapse. So HMRC dumbs down tax to try and make it fit with MTD. Surely even HMRC can see that MTD is a failure.

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By Postingcomments
18th Mar 2024 14:38

The state (and it's servile toadies, such as the Institutes and a number of posters on here) can do their thing over there. I'll be elsewhere doing my thing and minding my own business.

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By Cathy Milligan
18th Mar 2024 16:22

And so - what would they do if none of us bookkeepers / agents sign up for the testing?

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Replying to Cathy Milligan:
Morph
By kevinringer
18th Mar 2024 16:36

They are arrogant enough to push on with it anyway. They don't think they need agents and are convinced MTD is so simple, the software does everything for you and every self-employed business owner will find it a doddle.

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By Mr J Andrews
18th Mar 2024 16:35

Which planet is Ogilvie on ? Does he not realise the all time low his department has sunk to under his head honcho ? And then he has the gall to invite us to participating in the mess he's inherited. Sorry Ogilvie ; invitation declined. Your mess ; you dig yourself out.
Ogilvie must however be commended for the best 2024 MTD euphemism to date :
''.....things haven't been perfect in the past.......''. This must have lit up the luminaries faces.

The sad and deplorable aspects of these continual propaganda HMRC ''presentations'' brings home how we have all lost track of the initial whims of George Osborne. Remember the comical HMRC published booklets about how much life would be easier for the general public under MTD ? Now Ogilvie rounds off by wanting to take ''more senior'' HMRC people out to business and spend more time with bookkeepers and accountants. God knows how this will help Joe Public.
You, Ogilvie have inherited a lost plot in the indoctrination chain .

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By raybackler
18th Mar 2024 20:13

"Taxpayers unable to take part in the first phase include those that need to declare high-income child benefit, married couples allowance, pensions schemes and an overdue debt to HMRC."

Er... HICBC, married couples allowance, pension schemes and overdue debt to HMRC. That affects a huge number of clients. So... I'm OUT.

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By raybackler
18th Mar 2024 20:20

By the way... Got a P800 today for the 5th April 2023 tax year, relating to someone who ceased to be a client due to taking up employment. As I no longer act and have updated my Agent account accordingly, there seems to me something amiss here at HMRC. Fixing this sort of anomaly should be high up on the HMRC agenda. The last contact I had with this client was an exchange of emails on 5th August 2021. Does that make HMRC in breach of data protection rules?

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Replying to raybackler:
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By Mr J Andrews
19th Mar 2024 09:40

Definitely. This is a regular occurrence - originating from HMRC's incompetence with computer tech going back to the days of C.O.P. and introduction of S.A. Two programmes and it seems never the twain will fully meet.
Of course , with HMRC standards at its lowest ebb, the attitude to this serious data protection breach would simply be ''...couldn't care less - we are not accountable....''.
However the ex-client should be kept informed as to how his personal data is being bandied around by a Government Department. What else are they passing on to God knows who ?
Depending upon current relationships , ex-client should be asked to lodge a formal complaint , request a full report as to how this breach happened , seek reassurance that all records are now correctly updated. He should also point out that this misuse of private information as a common law 'tort' and request a suitable amount of compensation to avoid further legal action on his part such as damages for private information disclosed without his consent.
Do nothing and expect another P800 next time around.
Wait for the next 'progress' with MTD and expect a lot more bugs crawling out of the woodwork.

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By johnthegood
19th Mar 2024 05:28

HMRC need to improve their own systems, we all get that. I have no issue with HMRC implementing a new digital system at their end to cope with the various tax filings, it is needed and has been needed for a very long time. We would all welcome things like access to Subbies tax figures, but that is not what we all take issue with.

3 things fundamental questions that HMRC & co ignore.

1. why does that mean that we have to introduce third party software into the process, this adds complexity, time and cost.

2. why quarterly submission, this adds time and cost and serves no purpose, however you argue this point, this means we have to do something 4 times a year that we currently do once, even if you could argue that the sum of the work each quarter adds up to about the same amount you would do each year (which in itself is debatable), in our real world each time you pick up a job there is time spent in contacting clients, asking for missing info, fixing the software that doesn't work, sending clients authorisation to file, etc etc.

3. why keep insisting that digital equals more accuracy - it just doesn't

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Morph
By kevinringer
19th Mar 2024 10:00

"Adding another practical example, Rebecca Benneyworth said she recently found out that once the systems have moved over to ETMP, if you’re doing a tax return for a sub in the construction industry, the Construction Industry Scheme (CIS) tax will be live real time populated and agents will be able to see it."

CIS returns are already reported ETMP (see DMBM524560), so HMRC could already let agents view subcontractor information now. This does not require MTD.

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Morph
By kevinringer
19th Mar 2024 10:07

AW echo

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