Following extensive discussion with members, ICAEW has submitted its response to the Making Tax Digital: Draft Value Added Tax (amendment) regulations and notice 2018 published by HMRC on 18 December 2017. The response is available as ICAEW REP 18-2018
We have repeated many of our earlier comments, including our full support for HMRC’s digital transformation initiative, but we believe that MTD should be voluntary. Our members make this known to us at every opportunity. They and we want to help HMRC make MTD a success and welcome the assurance from the Financial Secretary to the Treasury that MTD will not be made mandatory for income tax or corporation tax until the programme is working well, but this principle should naturally also apply to VAT.
We have also made the following key points in this representation:
In the same week that we have seen the HMRC presentation on MTD we have received "revised" tax calculations for every client who opted to pay voluntary class 2 NI . These are not revised and show the same figures as the original calculation. The tax account still shows the £145,60 as due. How can we possibly ask clients to go through all the hoops for MTD when the HMRC system can not get this simple thing right and demonstrates that by sending the nonsense to our clients which we have to explain to them
I am fed up with HMRC sending notifications to clients saying that they have corrected the returns that I have submitted. In most cases, the figures are exactly what was shown on the return and, in cases where it isn't the same, almost invariably, the "correction" is incorrect and has to be reversed - guess who ends up paying for that. HMRC need to get their systems sorted before trying to introduce this ridiculous idea - last year, I found two errors in HMRC's programs. "Senior technicians" told me that I was wrong and their program was right but, after standing my ground and a lot of arguments with several people who told me that I was wrong, they backed down, agreed that I was right and I successfully recovered the fees but one of the clients affected was a new client and it is very embarrassing to have to tell a new client that you have got to invoice them a substantial amount for something that was caused by HMRC's errors and that they have to pay it before HMRC will even look at the claim for reimbursement.
It is about time that the ICAEW put up a stronger fight against this stupid scheme - it is your members that are going to have complaints from clients about the massive additional fees that they will incur for which they can see no benefits whatsoever. I have several clients who have said that they will close down their businesses and retire earlier than planned rather than computerise everything, with all of the costs and problems that will entail, when they have accounting systems that have worked perfectly well for many years.