On 19 December 2022, the then financial secretary announced a review to examine ‘whether and how MTD for ITSA could be shaped to meet the needs of smaller businesses’. HMRC has consulted widely and the main conclusions of the review were announced alongside the Autumn Statement.
The decision on further mandation of MTD for ITSA will be kept under review to enable HMRC to monitor users’ experience through public beta testing. This strikes me as eminently pragmatic.
HMRC has confirmed that it remains wedded to quarterly returns but has taken on board a major criticism and will make the reports cumulative within a tax year rather than simply containing the information for the particular quarter. This addresses concerns over HMRC’s proposal to require correction of a particular quarter’s report if errors or omissions are subsequently discovered.
Many stakeholders had been critical of the requirement for an end of period statement (EOPS) for each relevant income source as well as a finalisation for all sources. The EOPS has now been dropped.
There has been a great deal of discussion about the position of landlords of jointly let property. Landlords will not now be compelled to submit details of expenses for jointly let property in their quarterly returns and will be able to keep less detailed digital records.
Again, in response to stakeholder concerns, foster carers will not now be within the scope of MTD for ITSA on their qualifying care income.
A very significant concern has been the need for taxpayers to authorise more than one agent for MTD for ITSA if, for example, they appoint a bookkeeper to deal with the quarterly returns and another agent to deal with the finalisation. The government has acknowledged this need and has committed to delivering a solution.
I still struggle with HMRC’s assertion that basis period reform is ‘an important simplification in advance of MTD, making the transition smoother for most businesses’. For businesses with non-fiscal year ends it is a complication. HMRC acknowledges the issue for those businesses and is working with MTD software developers to minimise the impact.
The government says that it is ‘committed to working with stakeholders to get the design of MTD for ITSA right’. These measures certainly show that they are listening. There is, however, still a lot to do if the programme is to be delivered on the timescale set out last year.
Home >Articles > Autumn Statement 2023: Making tax digital
Autumn Statement 2023: Making tax digital
On 19 December 2022, the then financial secretary announced a review to examine ‘whether and how MTD for ITSA could be shaped to meet the needs of smaller businesses’. HMRC has consulted widely and the main conclusions of the review were announced alongside the Autumn Statement.
The decision on further mandation of MTD for ITSA will be kept under review to enable HMRC to monitor users’ experience through public beta testing. This strikes me as eminently pragmatic.
HMRC has confirmed that it remains wedded to quarterly returns but has taken on board a major criticism and will make the reports cumulative within a tax year rather than simply containing the information for the particular quarter. This addresses concerns over HMRC’s proposal to require correction of a particular quarter’s report if errors or omissions are subsequently discovered.
Many stakeholders had been critical of the requirement for an end of period statement (EOPS) for each relevant income source as well as a finalisation for all sources. The EOPS has now been dropped.
There has been a great deal of discussion about the position of landlords of jointly let property. Landlords will not now be compelled to submit details of expenses for jointly let property in their quarterly returns and will be able to keep less detailed digital records.
Again, in response to stakeholder concerns, foster carers will not now be within the scope of MTD for ITSA on their qualifying care income.
A very significant concern has been the need for taxpayers to authorise more than one agent for MTD for ITSA if, for example, they appoint a bookkeeper to deal with the quarterly returns and another agent to deal with the finalisation. The government has acknowledged this need and has committed to delivering a solution.
I still struggle with HMRC’s assertion that basis period reform is ‘an important simplification in advance of MTD, making the transition smoother for most businesses’. For businesses with non-fiscal year ends it is a complication. HMRC acknowledges the issue for those businesses and is working with MTD software developers to minimise the impact.
The government says that it is ‘committed to working with stakeholders to get the design of MTD for ITSA right’. These measures certainly show that they are listening. There is, however, still a lot to do if the programme is to be delivered on the timescale set out last year.
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