HMRC launch Making Tax Digital consultations

Wednesday 24 August 2016

HMRC has launched a series of Making Tax Digital Consultations, which set out radical detailed plans on how they propose the make tax digital and simplify the tax system.

BACKGROUND

The MTD Roadmap, published in December 2015, set out the government’s ambitious plans to deliver a fully digital tax service by 2020. The government say the aim is to make HM Revenue and Customs (HMRC) into one of the most digitally-advanced tax administrations in the world by 2020.

Edward Troup, Executive Chair, HMRC, said:
"Making Tax Digital represents very significant change. It will bring the tax system into the 21st century and help make HMRC one of the most digitally-advanced tax administrations in the world. Going digital will abolish the annual tax return as we know it by 2020, replacing it with a personalised digital service through which taxpayers will be able to send and receive information to HMRC at the click of a button."

"There is still a lot to design and develop, and it’s important that we do this hand-in-hand with our customers and their representatives; these consultations are the next step in this process."

Some of the consultations are specifically aimed at small business owners, landlords and their agents, so please make sure you take a look. 

The benefits of Making Tax Digital include:

  • cash-basis accounting so that thousands more will be able to pay tax based simply on the difference between money they have taken in and what they have paid out, meaning tradesmen will pay tax on cash received rather than invoices issued
  • prompts and alerts to help businesses get tax right and giving advice on tax reliefs they might be missing out on
  • greater certainty over tax bills so businesses don’t have to wait until the end of the year to find out how much they have to pay

ABOUT THE CONSULTATIONS

The six consultations set out detailed plans about how HMRC propose to make tax digital and to simplify the tax system, covering:

  • how digital record keeping and regular updates will operate
  • options to simplify tax for unincorporated businesses, including how the self-employed map accounting periods onto the tax year, extending cash basis accounting and reducing reporting requirements for unincorporated businesses
  • extending cash basis accounting to unincorporated property businesses, making life simpler for landlords
  • how the voluntary pay as you go arrangements announced at this year’s Budget will work
  • changes to tax administration to effectively underpin compliance with MTD and ensure HMRC has a fair and proportionate penalties regime
  • how HMRC will make better use of the information they currently receive from third parties to provide a more transparent service for customers.

Each consultation focuses on specific elements of the MTD reforms.

The consultation period is open now and will run to midnight Monday 7 November 2016.

HOW TO GET INVOLVED

Each consultation document contains details of how to get involved in the discussion over the next 12 weeks and how to formally respond to the consultations.

The consultation period will offer an excellent opportunity to continue to shape HMRC’s approach to the implementation of MTD.

For lots more information including links for taking part, go to:

www.gov.uk/government/collections/making-tax-digital-consultations

Face to face
If you’re interested in attending a face-to-face event, you can email HMRC to register your interest. Please let them know:

  • your nearest city
  • the consultation document or subject area you’re interested in

HMRC will then respond to you with details of the date, time and location of an event.

Webinars
HMRC are also running a series of hour-long webinars where you can find out what Making Tax Digital means to you, including an overview of all the consultations around specific elements of the Making Tax Digital reforms.

6 September 2016, 1pm to 2pm

9 September 2016, 11am to midday

14 September 2016, 3pm to 4pm

15 September 2016, 11am to midday

19 September 2016, 2pm to 3pm

21 September 2016, 3pm to 4pm

22 September 2016, 11am to midday

27 September 2016, 1pm to 2pm