HMRC’s work programme to implement Brexit and Making Tax Digital, slowed but continuing

On 30 April 2018, Jon Thompson appeared at a Public Accounts Committee hearing, a significant part of which was to explain the outcome of the review of HMRC’s work programme which needed reprioritisation following the Brexit vote.

Details of this review have also been circulated to ICAEW and other professional bodies partner organisations. See attachment below for full text of the communication.

HMRC has said ‘These changes will enable us to deliver new priorities – particularly EU Exit – while keeping us on track with our ambition to become the world’s most digitally advanced tax authority.’

Although there was little in the statement that will be completely new to our regular readers, there are a number of areas where work will slow down. It is also notable that work to allow agents to see and do what their clients can, wasn’t in the statement. We have been reassured that this is still continuing as a priority.

New digital services for individuals

Progress on simple assessment and real time PAYE tax code changes will be halted for the time being. HMRC will continue to encourage taxpayers to use their Personal Tax Accounts and will instead focus on improving the existing service. Additional services will be added only where they reduce phone and post contact or deliver significant savings.

HMRC will pause work to digitalise services that impact fewer taxpayers, such as those paying Inheritance Tax, or applying for Tax Advantaged Venture Capital Schemes and PAYE settlement agreements.

There will be no online service for new tax credits claims (no new tax credits claims will be made after January 2019 anyway)

Work will continue on improving the existing Tax Free Childcare system.

Business

As announced in July 2017, the pace at which businesses will be required to keep digital records and make quarterly reports through Making Tax Digital (MTD) has been slowed, to make the transition as smooth as possible, particularly for smaller businesses. But it has not stopped.

Following last year’s pilot, a voluntary Making Tax Digital for Business service for income tax started on 15 March 2018. A live pilot of MTD for VAT has started for simple VAT returns and the mandatory service for VAT for those with a taxable turnover above the VAT threshold will begin from April 2019.

Government has repeated that, as confirmed last July, it will not mandate any further MTD for Business changes before 2020, at the earliest. It confirms in this latest circular that

‘The prioritisation work means the convergence of business taxes from our current range of IT systems onto a single system will now happen at a slower pace. This will slow the creation of the single account for all business customers. This remains our ultimate aim and it does not impact the delivery of Making Tax Digital.

We will continue to deliver all of the additional work we were given in Budgets and Autumn statements for which we were given funding. This includes: the Soft Drinks Industry Levy; the Trust Registration Service; work to tackle avoidance schemes that seek to exploit tax and National Insurance Contribution advantages through Disguised Remuneration and Salary Sacrifice arrangements; and work tackling non-compliant overseas suppliers who sell goods to UK customers.’

Visit www.ICAEW.com/MTD to learn more and access resources to help you and your clients plan for MTD.

Regional Centres

HMRC’s move to 13 Regional Centres will continue although at a more manageable speed with the costs spread over a longer period. Longbenton will be refurbished in 2020-21, two years later than originally planned. In Nottingham, it will either refurbish the existing Castle Meadow site, or move to a new building in the city during 2020-21.

HMRC digital transformation prog 2018.pdf
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