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Two more vendors join MTD income tax private beta

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HMRC has confirmed that APARI and Thomson Reuters have both moved up from ‘in development’ to ‘available now’ on its Making Tax Digital software page. AccountingWEB gets the inside track from one of the vendors joining the beta. 

1st May 2024
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Following the launch of the Making Tax Digital for income tax (MTD IT) private beta on 22 April, two more tools have joined the five products already announced as participating in the testing.  

APARI and Onvio Tax (Thomson Reuters) are now part of the shortlist of MTD-ready vendors already in the private beta. The products now listed as available for the April 2026 start date of MTD IT range from accounting software giants like QuickBooks Online and Sage to lesser-known products such as 123 Sheets, self assessment direct and SE reports. 

Welcoming APARI and Thomson Reuters to the private beta, Craig Ogilvie, the programme director of Making Tax Digital, said in an HMRC webinar: “We’re continuing to work in partnership with a range of suppliers to create a vibrant marketplace who will join during the year.” 

While the list of MTD-ready products has increased to seven, HMRC’s Find software that works with Making Tax Digital for income tax lists 19 other software providers who are currently building tools. Although recognisable vendors such as FreeAgent, IRIS, TaxCalc, Wolters Kluwer and Xero are absent from the “available now” section.  

Thomson Reuters joins the trial with its Onvio Tax product. This MTD-ready product was developed in 2016 to support accountants through the transition to the digital tax regime. 

APARI pulls back the curtain on MTD testing

APARI was one of the first tools to appear on HMRC’s list of recognised vendors back in 2019. Anish Mehta, APARI’s chief product officer, is closely connected with MTD IT, having joined the vendor in 2020 from HMRC’s MTD IT team.  

Mehta told AccountingWEB that the vendor had been with the project since day one and didn’t want to let all of that hard work go to waste. “I think it’s an important signal about where we are as a software company, and our readiness for this change that’s coming,” he said. 

The vendor dropped off the list after HMRC published new versions of the APIs (application programming interfaces), but APARI worked out that the gap between what they’d already built and tested and what needed to be done to re-join the beta wasn’t a huge jump. 

“Having quite a few people already signed up for the private beta makes it easier to get those people activated again,” Mehta said. 

Hampered by the multiple delays to the digital project already, Mehta said APARI is going to learn from previous experience and expose only the existing cohort of people signed up and familiar to the private beta before opening it up more widely. 

Quality, not quantity

HMRC is in the process of encouraging agents to take part in the beta. Speaking at the Festival of Accounting & Bookkeeping (FAB) in March, HMRC’s Ogilvie told attendees that MTD is “going to happen” and “we want you to help us make it happen”. 

He also revealed that the private beta will be for a cohort of around 1,000 taxpayers, with HMRC focusing on “quality, not quantity”

As such, there are a number of restrictions for those who are eligible to voluntarily sign up to the testing, ranging from those who have a high-income child benefit charge to those claiming marriage allowance and those who are a partner in a partnership. 

Mehta agreed that focusing on quality makes a lot of sense for HMRC because “you’ll see the responsiveness of the APIs”, but he said there are elements that aren’t really testable yet such as the switch from quarter-by-quarter updates to cumulative updates. 

“There’s a question of how much are you really testing in all of this? Sure, we can pull information from HMRC APIs and we can push information through HMRC APIs, but are you getting the real experience of what an MTD compliance regime is going to look like? I think there are still a few gaps on that really.”

In addition, Mehta expects the testing to throw up some “live service issues”.  

He said: “Having more people testing means that you’re more likely to flush out those live service issues quicker. There was a period in the past where there were so few of us testing that actually we were providing a free public service.”

The re-launch of the MTD IT testing comes after the previous pilot saw numbers of participants plummet to just nine.

The MTD IT private beta launched on 22 April for taxpayers with an annual income of £50,000. The testing will open up to public beta from April 2025 before the MTD IT project becomes mandated in April 2026. 

Meanwhile, HMRC guidance confirmed last month that taxpayers signing up to the testing phase of MTD IT will still be subjected to late-filing and late-payment penalties.  

The discussion during HMRC’s MTD session at FAB earlier this year extended beyond the need to close the tax gap and focused on the benefits of tax digitalisation. Mehta is also more interested in the potential benefits. “You can get more data back out of the HMRC system than you ever could,” he said. 

He offered the examples of employment information and Construction Industry Scheme deductions, where MTD will enable accountants to access the equivalent of HMRC’s income record viewer but in their software and with more data.

Replies (10)

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By Jane Wanless
01st May 2024 16:03

"He also revealed that the private beta will be for a cohort of around 1,000 taxpayers, with HMRC focusing on “quality, not quantity”. "

So did they confirm that 1,000 have signed up?

Thanks (3)
Replying to janewanless:
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By FactChecker
01st May 2024 19:31

Course not ... given that “quality, not quantity” is but a soundbite that (HMRC are hoping will) act as a fig-leaf to obscure their embarrassment over how few taxpayers can be found within their very limited 'entry criteria'.

And they don't care that this limitation (along with the gaps in the specification to which I keep alluding and that Mehta has now acknowledged) means that any feedback from the Pilot will be absolutely worthless - akin to saying that giving a rollerskate to an athlete has tested the overall suitability of roads for all vehicles/drivers.

Thanks (4)
Replying to janewanless:
Rob Swan
By Rob Swan
03rd May 2024 15:11

1,000 is such a small number (under the circumstances) that it really doesn't prove - or 'test' - very much; more like HMRC will gain a false sense of security and way too much self congratulation if it doesn't actually fall appart or fail.
It's what happens when 100K or 1M or 10M are all hitting it that counts, and that's nowhere near the same thing. No comparison. And what's Plan B if MTD get's hacked/currupted/disabled by Russia/China/Nastyplaceistan? That's a distinct possibility! What's the betting next Gov't. will scrap it all anyway?

Thanks (0)
Tornado
By Tornado
01st May 2024 16:08

How can this software be MTD Ready when it has not been tested and only works with a small specific range of users?

It really is Could be MTD Ready, but we don't actually have a clue

Thanks (4)
By ireallyshouldknowthisbut
01st May 2024 16:12

"Mehta told AccountingWEB that the vendor had been with the project since day one and didn’t want to let all of that hard work go to waste"

The concept of "sunk costs" have passed Metha by

I feel really bad for these developers sinking time and money into this dead and pointless project.

Its really sickening to see private developers mislead about the viability of this.

Thanks (2)
By ireallyshouldknowthisbut
01st May 2024 16:19

Also Richard, can I pick you up one this:

"before the MTD IT project becomes mandated in April 2026"

This suggest you think its actually happening. You are smart guy. Treat your readers with some respect.

This project was originally mandated as April 2018. Its been put back at least 5 or 6 times now. Its even less likely to happen now than 5 years ago given zero credibility on offer from HMRC on this project.

Thanks (3)
Replying to ireallyshouldknowthisbut:
Tornado
By Tornado
01st May 2024 16:35

This project died long ago and it is quite frankly unbelievable that anyone thinks it is going to miraculously spring back to life again by April 2026.

It is dead and only the special powers of beings from beyond this world can bring it back to life again, and there are none of these in HMRC (as far as I know!).

Thanks (3)
Replying to Tornado:
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By Graeme Lindsay Abdn
04th May 2024 13:36

'Winter is coming' as I am sure a err HMRC spokesperson said!

Thanks (0)
Stepurhan
By stepurhan
02nd May 2024 08:30

Restricting the eligibility of those who can sign up is the exact opposite of quality in the context of this test. Quality would be testing it with taxpayers with complicated affairs that test the limits of the system. Testing it with people that have employment income and a few shares is not going to prove anything.

Thanks (5)
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By JustAnotherUser
02nd May 2024 11:03

option 1) kill MTD and allow the opposition to use the cancelling and loss of hundreds of millions of pounds against you in an election year.

option 2) keep spending millions on millions on a project no one knows or cares about and likely all in budget.

someone come up with a positive political reason to kill this and spin it as a positive and it will die. the old boys will cover each others backs until then.

Thanks (6)