This week's opinion: 6 January 2022

New year is a time both for reflection and looking forward. Our review of 2021 is on page 8, but here I want to look at 2022. 

Everything will depend on Covid. The optimism of autumn drained away towards Christmas and we start the year in an uncertain position. I hope that new fiscal support measures will not be necessary but, if they are, they must incorporate much more robust anti-fraud protections. The level of abuse which took place with the schemes was shocking and we cannot risk a repeat of the consequent drain on the public purse. I do not blame HMRC. Schemes were rolled out in an extremely tight time scale and ministers were warned of the possibilities of abuse. Another time round there would be no such excuse: I hope that lessons have been learned.

2022 is the last year in which significant changes to the design of MTD can be made: after that everybody will have to be gearing up towards implementation. I have said many times that I support the digital direction of travel, but I have grave concerns about the current proposals, in particular quarterly reporting. I am not against it in principle. It has some attractions, but HMRC must do more to explain why it is necessary and how the information will be used. Otherwise it risks becoming discredited. Vague talk of needing to see that taxpayers are ‘doing their homework’ is patronising and will not persuade people to make fundamental changes to the way that they operate. 

Next January, when I come to review 2022, I hope that I will be applauding the great steps forward that HMRC and the profession have jointly made to reshape MTD into something of benefit to all parties. There’s no harm in starting the year in an optimistic mood...