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HMRC delays plans to introduce more digital services for individuals

15/06/2018

Today I read this article by the AAT, and felt the need to share. From feedback of all the professionals I have spoken to, everyone has said the same thing, HMRC will not be ready for MTD in time. They cannot even handle what they have at the moment, and the below article substantiates this point.

Tuesday, May 1, 2018 – AAT

image: fingerprint and cloud

Brian Palmer, tax policy adviser, AAT (Association of Accounting Technicians)

HMRC has this week issued an e-mail to stakeholders acknowledging that the result of the 2016 EU referendum has resulted in major changes in priorities for the department.

The Department is now being required to deliver essential programmes to support access to European markets and boost worldwide free trade. Many of these projects will need to be underpinned by sophisticated digital systems.

At the end of 2017, HMRC had 15 major programmes and more than 260 projects running. It is hardly surprising in this context that Jon Thompson, HMRC’s Chief Executive, felt the need “to take a step back and look carefully at what we could, and should, deliver in light of those challenges.”

Simple-assessment on hold

The reorganisation of priorities includes halting the rollout of Simple Assessment (the removal from Self-assessment of those with limited taxable income from pensions or employment) and suspending real-time tax code changes.

“The things that we’re stopping or pausing will slow our journey,” Thompson continued, “but they don’t change our overall ambition to become the world’s most digitally-advanced tax authority. But crucially, they will allow us to support EU Exit while continuing to deliver ambitious changes for our customers.”

In its e-mail, HMRC acknowledged:

“While our transformation is on track, it hasn’t all been smooth sailing. We were overly ambitious about the number of customers who would stop contacting us by phone and post after we introduced digital channels. Demand is falling, but not by the amount assumed in 2015.”

VAT-MTD remains on track

HMRC however remains on track to deliver VAT mandation in 2019, for the VAT-registered with turnover above £85,000. Indeed, a limited pilot has just started. However, the convergence of business taxes from HMRC’s many legacy systems onto a new single system (ETMP) is set to slow. The department states this will not impact on the delivery of Making Tax Digital.

MTD for individuals slowed

While this might be the case for MTD for business, clearly this is not the position for MTD for individuals.  Back in his March 2015 Budget, then-Chancellor George Osborne promised us the death of the tax return. It seems that the demise of the self-assessment tax return has been greatly exaggerated, at least for the time being

HMRC highlights

In the e-mail, HMRC also took the opportunity to list some of its transformation highlights including:

  • More than 15 million people now have Personal Tax Accounts, which were accessed 32 million times last year.
  • Three million businesses now use Business Tax Accounts.
  • Powerful new data sources helped to secure a record £28.9 billion through compliance work last year.
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