An opportunity to tell HMRC what you think…
Have your say on MTD
Unless you’ve been living in a cave, you’ll no doubt have heard about Making Tax Digital – aka the Death of the Tax Return. From 2018, interacting with the tax system will become an increasingly digital process, bringing in its wake fundamental change to the current annual tax regime.
Most businesses, the self-employed and landlords – your clients in other words – will need to use software or apps to keep their business records, and to update these quarterly.
A good read?
HMRC has finally released its consultation documents on MTD, with the publication of 6 documents on 15th August. As the saying goes, good things come to those who wait – and we’ve been waiting since March. The consultation documents cover a variety of relevant areas of MTD and outline the proposed changes to the existing strategy. They weigh in at a hefty 400+ pages!
There’s already been one major shift in HMRC’s strategy: the smallest businesses and landlords will be exempted from digital record-keeping and quarterly updates.
This means that in addition to the 1.6 million small businesses and landlords that were already excluded, a further 1.3 million small firms and landlords will no longer be in scope of MTD. Therefore, half of the UK’s 5.4 million small businesses will not be affected by the quarterly tax reporting regime of MTD. That’s quite the change, and shows that HMRC does listen to feedback!
3 ways to get involved
There are several options now open to you:
- Ideally, HMRC wants accountants and other agents to read and provide feedback on these papers before the consultation closes on the 7th November. An effective cure for insomnia perhaps? READ PAPERS
- HMRC has provided a useful overview of the consultation documents to make it easier to digest the information. It also provides a list of the key questions that HMRC would like responses to. READ OVERVIEW
If you’d prefer to respond to the questions in their overview, rather than to the individual consultation documents, you can do so using an online form HMRC has provided at the following: MTD QUESTIONS RESPONSE
- Finally, here at IRIS we are currently ploughing through these documents on your behalf and will provide an outline of the proposals and key changes. We will then provide you with a mechanism for submitting your feedback to us, so we can send it to HMRC on your behalf. As well as easing the review process for you, this has the advantage of creating ‘critical mass’, rather than any single practice or firm being a lone voice.
HMRC needs, and indeed wants, to understand the impact of this transformative change on UK businesses and their tax advisers. I would strongly recommend you get involved with any of the above options.
For our part, we’ll be in touch soon with our summary of the consultation papers and will explain how you can submit your feedback via IRIS. In the meantime, why not join us at our annual IRIS World event where HMRC will be presenting a keynote on Making Tax Digital, as well as participating in the industry panel.