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Making Tax Digital – HMRC to Prioritise MTD

In order to try and build public trust the HMRC charter has been upgraded and updated to clarify the standards of behaviour expected from both them and tax payers. The have also provided clearer guidance on Making Tax Digital, meaning it is more accessible and as clear and authoritative as possible. Support services will be made available for those who may need additional help.

More real time information will be included to help taxpayers gather a clearer understanding of their tax position. Tax reporting will also be brought in line with real time as part of the MTD programme. They hope that this will allow taxpayers to have the information they need to enable them to manage their tax affairs in one place and for them to be able to understand their tax obligations more easily.

At the annual HMRC stakeholder conference Jesse Norman MP, told businesses and stakeholders that HMRC will be prioritising Making Tax Digital (MTD). HMRC has created a 10-year tax administration strategy to focus on the changing tax system. Their hope is to improve the resilience and the effectiveness of the tax system and create greater flexibility.

Norman has said that HMRC want to focus, not just on the systems but the everyday business of making tax easier to calculate and understand. He stated that by April 2022 MTD will include smaller VAT registered businesses and by 2023 HMRC aim to extend MTD to income tax self-assessment for businesses and landlords with income over £10,000.

It is believed that as MTD develops it will potentially allow for better record keeping, a greater support for productivity improvements and lower error rates. There may be transitional processes and costs which stakeholders may be concerned about, Norman has said he is ‘very much still in listening mode on this issue’ and believes that MTD is a fundamental part of HMRCs vison for improving the tax system.

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