HMRC’s Giles McCallum on the vision for MTD and THAT articleby
Giles McCallum’s column about HMRC’s vision for MTD wins the prize for having the most reader comments in 2021, so during his session at the AccountingWEB Live Expo he had his right to reply.
Giles McCallum’s column, published on AccountingWEB in October, about HMRC’s vision for MTD and the benefits it will bring to the tax system wins the prize for having the most reader comments in 2021.
Whilst many of the views and concerns expressed were not anything that hasn’t been said before by the AccountingWEB community, the level of responses and strength of feeling certainly made HMRC sit up and listen.
So it was no surprise that when McCallum, who heads up MTD for HMRC, spoke at the AccountingWEB Live Expo he took the opportunity to set the record straight, tackling some of the challenges and questions shared by readers of his original article.
First, he qualified his credentials for doing the job he has been tasked with. McCallum said: “Some of you may have read my recent article on AccountingWEB, judging by many of the comments some may have expected me to be presenting this from a golf course - maybe between holes 9 and 10 - telling you how to do your jobs. I’m sorry, that’s not me. Or you were expecting me to be a pinstripe-suited civil service mandarin from Whitehall. That’s not me either.
“My background is from the private sector where I have been running digital transformation programmes across many different industries for a great number of years and I’m bringing that into MTD, combined with my wide team.”
He also tackled criticism in the article’s comments that HMRC “is sitting in its ivory tower” and is “blind to the pain or the journey ahead”, reassuring the audience that he is out in the field, speaking to accountants and businesses regularly.
“Just the other day I was in Newcastle speaking with a number of different accountancy firms. We are very close with all of the software industry and are working with them hand in hand. But there is so much still to do and we are well aware of that and are taking that forward.”
McCallum also underlined his recognition of the role accountants had to play in readying clients for MTD, but said: “MTD is happening and MTD for ITSA is happening, the legislation in parliament has been passed and we have a lot to do. It is not a question of whether we work together on this, it is how we work together on this because we will need to.”
“There is plentiful reward for the accountancy profession and for businesses if we get this right. I am committed to ensuring we do get this right and with you we will move on this journey together.”
In the session, Glenn Collins, head of policy at ACCA, steered questions and said that the concerns expressed by agents were on behalf of their clients. McCallum reassured the audience that the message had come through “loud and clear”.
He added: “I talk to individual accountants who are uber digital as well as those who have not started that journey and I understand it is about getting the message out and helping their clients understand what this is, what the journey is and how to get that across.
“This is about the taxpayer having the ability to keep digital records and a different way of submitting tax. We are utterly cognizant of the impact that this will have. It will be much bigger than VAT because there is a more fundamental change going on in ITSA than there was in VAT, with quarterly reporting and so on.
“But digital record keeping is the way forward. Sticking your receipts on a spike and dealing with them at the end of the year is not the way things are going. We have got to make that change. It is happening. But I agree it is about the taxpayer.”
Collins pressed hard on the low £10,000 threshold - and it is something the ACCA continues to lobby against.
McCallum said that while £10,000 is a low bar, it was purposefully low to get the long tail of smaller UK businesses and taxpayers filing digitally.
“We are not trying to exclude here, we are trying to create as much inclusion into MTD as possible because filing records digitally is the way to go."
Talking of end goals, Collins also asked whether quarterly reporting was the test bed and starting point for quarterly tax payments in the future - McCallum’s response was an unequivocal ‘no’.
“There is a lot of confusion and we have to up our game in getting these messages out. Quarterly submissions are not the same as the end of year tax calculation. There will still be one end of year calculation and the quarterly submission is just a summary to say ‘yes we are keeping our records digitally, we are able to submit digitally and those records give an accurate representation of where our business is over that quarter’.”
Coming soon: more from Giles McCallum’s session and the UK business journey to digitalisation.
AccountingWEB Live Expo is in the Coventry Building Society Arena on 1-2 December.