Making tax digital
Discussion
Mr Whippy said:
If you have a bunch of banks/savings accounts and investment vehicles paying annually but sporadically over a year, that’s lots of admin to do 4 returns a year.
Plus some monthly interest paying Building Society accounts on books, that’d be fun, four visits a year just to update a book to get figures.
Is this all just desperation for revenue as soon as it can be borne?
A one hit boost to revenue, maybe a 3-6 month duration, then back to where it was?
Arguably after that period they’d take less revenue as people will start adding the extra admin to expenses
HMRC want banks/building societies and investment platforms to report interest and dividends directly (amongst other data sources). Long term goal is to pre-populate tax returns with this information for the taxpayer to review rather than rely on tax payers pulling it altogether.Plus some monthly interest paying Building Society accounts on books, that’d be fun, four visits a year just to update a book to get figures.
Is this all just desperation for revenue as soon as it can be borne?
A one hit boost to revenue, maybe a 3-6 month duration, then back to where it was?
Arguably after that period they’d take less revenue as people will start adding the extra admin to expenses
Hill92 said:
HMRC want banks/building societies and investment platforms to report interest and dividends directly (amongst other data sources). Long term goal is to pre-populate tax returns with this information for the taxpayer to review rather than rely on tax payers pulling it altogether.
Which also cuts out the need for small accountants and businesses, with everybody's tax reliably deducted through a handful of enormous employers instead. However, this is HMRC, and we all know how slow, incompetent and bureaucratic they are.Koyaanisqatsi said:
Hill92 said:
HMRC want banks/building societies and investment platforms to report interest and dividends directly (amongst other data sources). Long term goal is to pre-populate tax returns with this information for the taxpayer to review rather than rely on tax payers pulling it altogether.
Which also cuts out the need for small accountants and businesses, with everybody's tax reliably deducted through a handful of enormous employers instead. However, this is HMRC, and we all know how slow, incompetent and bureaucratic they are.Mr Whippy said:
If you have a bunch of banks/savings accounts and investment vehicles paying annually but sporadically over a year, that’s lots of admin to do 4 returns a year.
Plus some monthly interest paying Building Society accounts on books, that’d be fun, four visits a year just to update a book to get figures.
Is this all just desperation for revenue as soon as it can be borne?
A one hit boost to revenue, maybe a 3-6 month duration, then back to where it was?
Arguably after that period they’d take less revenue as people will start adding the extra admin to expenses
The quarterly submissions are for those who arte trading (small sole trader businesses/partnerships) and landlords.Plus some monthly interest paying Building Society accounts on books, that’d be fun, four visits a year just to update a book to get figures.
Is this all just desperation for revenue as soon as it can be borne?
A one hit boost to revenue, maybe a 3-6 month duration, then back to where it was?
Arguably after that period they’d take less revenue as people will start adding the extra admin to expenses
Those who currently complete Self Assessment chiefly because they have complicated tax affairs - such as large amounts of interest or dividend income or multiple employments/pensions, will not be required to make quarterly submissions.
Instead, HMRC HOPES to manage these types of situations by making sure Tax Coding notices are correct and up to date (ho, ho) and/or that tax payers monitor and AMEND, in real time, their own HMRC Tax Account.
Not worth starting a new thread, but just an FYI for any accountants, or anyone under self-assessment who has the unfortunate requirement to call HMRC. In short, from next Monday, you won't be able to!
Article said:
HMRC is planning to close the self assessment tax helpline for three months over the summer to focus call centre resources on dealing with other problem calls
All calls to the helpline will be redirected to digital services over the period to give HMRC time to deal with other more urgent phone enquiries.
The helpline will be closed for three months from Monday 12 June until Monday 4 September. During this time HMRC said it will ‘trial directing SA queries from the helpline to the department’s digital services, including its online guidance, digital assistant and webchat’.
What an absolute shower they are.All calls to the helpline will be redirected to digital services over the period to give HMRC time to deal with other more urgent phone enquiries.
The helpline will be closed for three months from Monday 12 June until Monday 4 September. During this time HMRC said it will ‘trial directing SA queries from the helpline to the department’s digital services, including its online guidance, digital assistant and webchat’.
So.. possibly the second busiest date in tax year for us - and they close the help line.
How about: Sorry I need to divert my Tax money for 3 months to deal with more serious issues?!
Makes you wonder just what a s
t-show they really are. Hopefully I'll never need to speak to them - but I can only imagine the pain of having to use a HMRC chat-bot.... what is it going to say other than... 'read the website for further information and join a general circle of dispare.
How about: Sorry I need to divert my Tax money for 3 months to deal with more serious issues?!
Makes you wonder just what a s
t-show they really are. Hopefully I'll never need to speak to them - but I can only imagine the pain of having to use a HMRC chat-bot.... what is it going to say other than... 'read the website for further information and join a general circle of dispare.No thats perfectly ok because all the answers are always on the website and so easy to find.
Every time I have had to phone them I have hunted and searched the website first and continued for the 45 minutes I am hold being told my call is important to them.
At the end of the call I always ask if the answer was on the website and am told no.
Every time I have had to phone them I have hunted and searched the website first and continued for the 45 minutes I am hold being told my call is important to them.
At the end of the call I always ask if the answer was on the website and am told no.
Well colour me (un)surprised. Article just in... 
Article said:
The rollout of Making Tax Digital is expected to cost HMRC five times the original forecast in 2016 following repeated delays
The digitalisation of tax will cost HMRC £1.3bn, more than £1bn above the original budget of £226m, according to a report by the National Audit Office (NAO). So far HMRC has spent £642m on developing Making Tax Digital (MTD).
From the outset, the NAO said HMRC had set ‘unrealistic’ ambitions and timescales, with ‘unknown levels of risk’. It also underestimated the complexity involved in moving from its own legacy systems and had not fully understood the scale of the challenge of moving data and systems when it prepared its initial business case.
In its May 2022 business case, HMRC forecasted total net ongoing costs to taxpayers of around £900m over five years to comply with MTD.
However, the NAO found that HMRC excluded significant upfront costs of £1.5bn to VAT and self assessment taxpayers from the business case’s cost-benefit analysis.
These costs related to taxpayers updating their own systems and obtaining tax advice. This would have shown that the combined cost to the government and to taxpayers of proceeding with MTD for self assessment would have exceeded the forecast additional tax revenue.
The digitalisation of tax will cost HMRC £1.3bn, more than £1bn above the original budget of £226m, according to a report by the National Audit Office (NAO). So far HMRC has spent £642m on developing Making Tax Digital (MTD).
From the outset, the NAO said HMRC had set ‘unrealistic’ ambitions and timescales, with ‘unknown levels of risk’. It also underestimated the complexity involved in moving from its own legacy systems and had not fully understood the scale of the challenge of moving data and systems when it prepared its initial business case.
In its May 2022 business case, HMRC forecasted total net ongoing costs to taxpayers of around £900m over five years to comply with MTD.
However, the NAO found that HMRC excluded significant upfront costs of £1.5bn to VAT and self assessment taxpayers from the business case’s cost-benefit analysis.
These costs related to taxpayers updating their own systems and obtaining tax advice. This would have shown that the combined cost to the government and to taxpayers of proceeding with MTD for self assessment would have exceeded the forecast additional tax revenue.
Eric Mc said:
Is that not what many of us have been saying over the 8 year period this farce has been in progress?
Amazingly, there were one or two gung-ho advocates for MTD posting here on PH in the early days. They seem to have gone strangely quiet in more recent times.
Absolutely Eric. Farce is the correct word! Amazingly, there were one or two gung-ho advocates for MTD posting here on PH in the early days. They seem to have gone strangely quiet in more recent times.
Koyaanisqatsi said:
considering that it didn't take many combined PH brain cells to work that out a long time ago - perhaps we should collectively bid to run HMRC?! 
how can someone in that position not be able to forecast the potential issues?
Eric Mc said:
Apparently the IRS in the US want their version of MTD too. However, they intend to create the software themselves and provide it for free to EVERY US taxpayer.
I wonder if they've learned some lessons from the UK's disastrous attempt to introduce MTD?
Is that not still going to have issues - how will it integrate with xxx thousand proprietary bits of accounting software?I wonder if they've learned some lessons from the UK's disastrous attempt to introduce MTD?
If we want progress then simplification must surely be the way forward - and e.g. for VAT the way to do that is to have one standard bit of software and let's say a website could do it - just type in 9 numbers and press submit - worked for years!
the concept behind MTD is to try and address fraud by tracking everything digitally, but we don't live in a joined up digital world so there will always be a point of manual input and at that point someone wishing to commit fraud can put in whatever figures they wish!
akirk said:
considering that it didn't take many combined PH brain cells to work that out a long time ago - perhaps we should collectively bid to run HMRC?!
how can someone in that position not be able to forecast the potential issues?
I read this report yesterday. If they'd spoken to any agents/accountants in the 'real world', we'd have told them that it was a stupid idea in the first place. Sitting there shrugging and saying 'we didn't realise' after having spunked many millions of taxpayer cash up the wall just doesn't cut it IMO. Muppets.how can someone in that position not be able to forecast the potential issues?
Interesting development. Let's hope they listen.
Article said:
An influential group of tax advisers is calling on the government to ‘rethink’ plans to expand the scope of Making Tax Digital reporting to landlords and the self employed
In a letter to the newly appointed financial secretary to the Treasury, Nigel Huddleston, the Chartered Institute of Taxation (CIOT) and Association of Taxation Technicians (ATT) said the government needed to commit to a ‘full review of MTD so that all of those affected can work together to form a less burdensome (for taxpayers, agents and HMRC), less disruptive and more realistic plan for realising the many benefits of digitalisation’.
‘MTD is seeking to mandate decisions made almost a decade ago, which were ill-informed given there was no prior consultation among those affected at the time, and the project continues to suffer delays and growing costs as the enormity and complexity of the task has emerged.
‘The current approach needs a rethink – and we would urge you to consider using the Autumn Statement to launch a review of MTD, followed by detailed consultation on its future direction and delivery, with a full assessment of its impacts and benefits,’ the letter stated.
Under the current much delayed timetable, new MTD reporting will require the submission of five returns a year with quarterly statements and a fifth year end round up of earnings from April 2026. This will affect all landlords and self employed individuals with income over £50,000.
HMRC has long argued that digitisation of the tax system will reduce the level of errors and reduce the tax gap but the current proposals will increase the administrative burden for reporters and accountants due to the volume of reporting. It is also understood that the current software is unable to deal with complex affairs or provide access to MTD accounts by multiple agents.
‘We remain unconvinced that MTD will significantly reduce the tax gap or bring substantial efficiencies to businesses and HMRC in its planned form,’ the institutes stressed.
‘As was also observed by the National Audit Office in the summer, we have long been concerned that HMRC have not given sufficient consideration to the considerable increased compliance costs for businesses and agents.
‘The proposals as they stand are likely to lead to a further deterioration in HMRC’s already poor service levels, especially if MTD is launched before it is fit for purpose.’
A CIOT/ATT survey earlier this summer found that 70% of respondents thought April 2026 was an unrealistic start date for MTD for income tax self assessment and 95% were not confident about HMRC’s ability to oversee the introduction.
Edit to add - Who on earth are the 5% that were confident in HMRC's ability to oversee the introduction?? In a letter to the newly appointed financial secretary to the Treasury, Nigel Huddleston, the Chartered Institute of Taxation (CIOT) and Association of Taxation Technicians (ATT) said the government needed to commit to a ‘full review of MTD so that all of those affected can work together to form a less burdensome (for taxpayers, agents and HMRC), less disruptive and more realistic plan for realising the many benefits of digitalisation’.
‘MTD is seeking to mandate decisions made almost a decade ago, which were ill-informed given there was no prior consultation among those affected at the time, and the project continues to suffer delays and growing costs as the enormity and complexity of the task has emerged.
‘The current approach needs a rethink – and we would urge you to consider using the Autumn Statement to launch a review of MTD, followed by detailed consultation on its future direction and delivery, with a full assessment of its impacts and benefits,’ the letter stated.
Under the current much delayed timetable, new MTD reporting will require the submission of five returns a year with quarterly statements and a fifth year end round up of earnings from April 2026. This will affect all landlords and self employed individuals with income over £50,000.
HMRC has long argued that digitisation of the tax system will reduce the level of errors and reduce the tax gap but the current proposals will increase the administrative burden for reporters and accountants due to the volume of reporting. It is also understood that the current software is unable to deal with complex affairs or provide access to MTD accounts by multiple agents.
‘We remain unconvinced that MTD will significantly reduce the tax gap or bring substantial efficiencies to businesses and HMRC in its planned form,’ the institutes stressed.
‘As was also observed by the National Audit Office in the summer, we have long been concerned that HMRC have not given sufficient consideration to the considerable increased compliance costs for businesses and agents.
‘The proposals as they stand are likely to lead to a further deterioration in HMRC’s already poor service levels, especially if MTD is launched before it is fit for purpose.’
A CIOT/ATT survey earlier this summer found that 70% of respondents thought April 2026 was an unrealistic start date for MTD for income tax self assessment and 95% were not confident about HMRC’s ability to oversee the introduction.
Edited by LeighW on Thursday 16th November 16:13
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