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Piloting MTD for ITSA

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According to figures obtained Saffery Champness, only six participants are piloting making tax digital for income tax self-assessment (MTD for ITSA) in the current tax year.

HMRC has explained that, as with MTD for VAT, numbers are restricted in the early stages of the pilot. As the functionality of the ITSA service is expanded, the number of eligible participants will increase – which will enable the testing at scale in advance of the mandation of the service in April 2024, HMRC said. 

Nonetheless, there are concerns over the testing process. Paul Aplin, former tax partner of a regional accountancy practice and member of the HMRC’s Administrative Burdens Advisory Board, described the pilot as ‘mission-critical’ for the success of MTD for ITSA. ‘We need – as a matter of urgency given what we now know – a roadmap for the expansion of the pilot that has been agreed with software developers and that gives agents and representative bodies a clear idea of who can join and when,’ he said. ‘Currently only people with extremely simple tax affairs can join. Successive cohorts of taxpayers with increasingly complex affairs must be progressively added to the pilot and the system seen to be working for them if the aim of mandating over 4m businesses and landlords in April 2024 is to be achieved. MTD can only succeed if it is a collaborative endeavour by all stakeholders.’