There was an inevitability about the postponement of making tax digital (MTD) for income tax. As taxpayers and their advisers start to re-establish something like normality, to say nothing of having to deal with getting tax payments up to date after all of the various deferrals, the prospect of having to get to grips with MTD for the 2023 start was fast becoming a nightmare.
HMRC has, to its credit, provided more information about its assumptions about the costs and benefits to taxpayers of MTD. Some of this seems reasonable but I was left open-mouthed when I read that each quarterly return was estimated to take only an additional six minutes of agents’ time. This is on the basis that tasks which are currently done at year end will simply be spread over four quarters and will not create any significant extra work for agents. I leave you to make your own comments…
There is no consensus within the profession (indeed within the Taxation office itself) about MTD. Most people accept that there is an important role for technology in tax administration but opinions are divided about time scales, mandation, exemptions and de minimis limits. My view is that the government is right not to abandon the project and that, ultimately, a system will emerge which will work well for taxpayers, agents and HMRC alike – but I suspect that that might not be until well after Taxation’s centenary edition!