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Two numbers caught my attention this week: nine and four million. First nine. That is the number of people currently within the making tax digital pilot for income tax. To be fair to HMRC, this stage of the pilot was always low key and there are restrictions on who can take part. Even so nine seems an astonishingly low number inparticular as, by definition, the people involved are self-selecting, and I wonder what real insights are being obtained.
I have always supported the principle of digitalisation and continue to believe that, properly designed and managed, it can bring real advantages to taxpayers and HMRC alike. But I am far from confident that we are where we need to be at the moment. At the very least we need assurance that there will be a meaningful pilot programme for the whole of the tax return cycle and that there will be enough time to evaluate its effectiveness before MTD is mandated. HMRC’s statement on page 4 of this issue is encouraging and I hope that regular feedback on the trial will be made available.
Four million is the number of self-assessment returns which were outstanding a week before the filing deadline. It is interesting to look at this figure in the light of the above. Some commentators say that if that number of returns are outstanding months after the year end, there is no chance that everybody will file quarterly in-year updates. Others say that MTD would obviate the problem. Everything will already have been done in more or less real time and there would be no need for a last-minute rush. What I do know is that the shift from post-year to in-year reporting will be a massive change for all involved. Can we really achieve it in the current timescale?
