Scale up digital tax account trials, HMRC urged

Pilots of Making Tax Digital should be scaled up even though the timetable for the ‘at least’ quarterly requirement to report to HMRC has been relaxed, says a charity.

The pilots also need to be run over a full financial cycle and thoroughly evaluated, so that it can be proven that the reports can actually be made -- and are accurate, urged the ATT.

“HMRC [needs] to devise a version of MTD that works. Not just making tax digital, but making it do-able,” said Graham Batty, of the Association of Taxation Technicians (ATT).

He believes there is a cost issue with MTD to address too so, as part of the pilots, he wants the Revenue to be assessing and publishing the compliance costs for the traders who take part.

But it’s not just firms who are 'in the dark' about the final price tag of digital tax accounts -- taxpayers (who will ultimately fund the project for the department) need to be told as well.

The association said: “Very few businesses currently understand the impact which the MTD obligations will have on them.

“That means it is essential that HMRC have an adequate budget for a sustained publicity campaign to explain how and when MTD will be introduced and how businesses can prepare.”

In July, HMRC said: “We will start to pilot Making Tax Digital for VAT by the end of this year, starting with small-scale, private testing, followed by a wider, live pilot starting in Spring 2018.

“This will allow for well over a year of testing before any businesses are mandated to use the system. No business will be mandated before 2019.”