HMRC digital accounts and quarterly reporting (MTD) – update January 2017

HMRC digital accounts and quarterly reporting (MTD) – update January 2017
26th January 2017 Debbie

Following on from my article in November in relation to the above. My earlier articles – February, May and November – can be found in my earlier blogs.

Since my last blog The Treasury Select Committee issued their Initial Report on MTD on 14 January 2017. The report focused on digital record keeping and the quarterly aspects of MTD, there will be further comments on the other aspects of MTD – eg Cash Basis, revised GAAP, in due course.

The key points raised in the report are as follows:

It was agreed that, carefully introduced, digitisation of tax records and reporting (MTD) can be an opportunity to greatly improve the administration of the tax system for the long term;

  • It should be implemented carefully – with long transitional arrangements, where necessary – drawing on information from fully inclusive pilots;
  • A number of short comings were identified:
    • Cost and administrative burdens for very small businesses;
    • Speed at which MTD is being implemented;
    • If the Government get it wrong they could jeopardise the trust and goodwill between HMRC and taxpayers;
  • So it is proposed that the Government should change its approach:
    • Abandon plans for £10,000 threshold. The Committee has yet to see evidence to justify a threshold below the VAT threshold (currently £83,000);
    • Timetable of April 2018 looks unachievable – it should be delayed to 2019/20 or later;
    • Pilots of the proposed system are essential – which need to gather information over four quarters and the year end reconciliation; and
    • Free software for smaller and less complex businesses.

So the Committee have agreed with a large number of concerns raised by the Accountancy profession – but what will happen next?

The Government will publish their consultation response very soon and it will be interesting to see whether the above is taken into account – still Watch This Space!


Debbie Wicks

Friston Wicks; Chartered Accountant and Chartered Tax Adviser