The Treasury Select Committee (TSC) wrote to HMRC in early June 2019 to raise a number of Making Tax Digital (MTD) for VAT service issues. HMRC’s response of 18 June 2019 has now been published (the letter from the TSC to HMRC has not yet been published).
The correspondence concerns two particular issues which have also been raised by ICAEW members:
The recent poor performance of the VAT helpline
Statistics for the performance of the VAT helpline to the end of May 2019 are included in an annex to the correspondence.
The performance of the helpline is very worrying: in May 2019 HMRC answered only 9% of calls to the VAT helpline within 10 minutes and it failed to answer more than 58% of the calls to the helpline (44,382 calls answered out of a total of 106,937).
It would appear that HMRC had not allocated any additional resource to the VAT helpline to deal with MTD queries as it answered fewer calls in May 2019 than it did in each of January, February and March 2019.
The response from HMRC states:
‘We have doubled the number of people taking VAT helpline calls from 100 in March to more than 200 now, and extra staff are being deployed to match call peaks. Productivity levels have increased as newly trained staff have gained experience of this work. We are beginning to see performance levels improve and aim to achieve at or around our 5-minute monthly average speed of answer target and maintain this thereafter ensuring normal service for the first significant quarterly filing deadline for MTD on 7 August.’
However HMRC is unable to provide reassurance as it also states:
‘It is too soon to be confident that we have resolved the issue, and we continue to monitor it very closely.’
This situation is clearly unacceptable. This issue has been raised with HMRC at the ICAEW MTD software advisory group and is on the agenda of a specially convened meeting of the Joint Initiative Steering Group on 17 July 2019.
Issues with paying VAT by direct debit
HMRC has also acknowledged another issue raised with them which concerns payment by direct debit by those signing up to MTD for VAT.
Some businesses that pay their VAT by direct debit and have signed up to MTD have not had their last non-MTD payment collected. HMRC advises that it is rectifying the situation as a matter of priority and expects to have collected all outstanding payments by 22 July. If a business has not had their payment collected by this date they should contact the VAT helpline.
In the majority of these cases, payment has not been collected because the business signed up immediately after submitting their final non-MTD return. Businesses, and agents acting on their behalf, should wait until after payment has been collected before signing up.
I was one of those businesses that signed up immediately after submitting my final non-MTD return & as a consequence the last non-MTD DD was not collected in June. The helpline advised me to make a manual payment of the amount due. Now, one quarter later, I find that the manual payment has been allocated to the MTD system which thinks I am in credit so my first MTD DD has not been collected either. The old system shows nothing due as it seems to think the DD was collected. Its a mess.