HMRC has paused its making tax digital for income tax self-assessment (MTD for ITSA) pilot, according to a freedom of information request filed by Saffery Champness. The response revealed that only 115 taxpayers were active in the voluntary trial at the time, with recruitment to the pilot put on hold in November 2022 alongside the decision to delay implementation of MTD for ITSA until 2026.
The firm reports that HMRC intends to launch a new testing strategy based on the revised timetable.
Lucy Woodward, Partner in the Private Wealth team, commented: ‘Even though a push in the summer of 2022 saw more taxpayers enrolled into the pilot the numbers were still vanishingly small when set against those who will be mandated to use the system in a couple of years. There have already been a number of teething problems seen with the system, and others will only be identified, and addressed, when it is tested at scale.
‘Along with MTD for ITSA, wider consultations on tax administration and payment have raised the possibility of more real-time tax payments. If the government were to move towards a real-time payment system, there are various possible options – it would be good to see them set out a detailed vision for tax administration and payment as soon as possible, which would make this clear and allow future work on MTD to develop in the right way.’
An updated MTD for ITSA pilot could, for example, tap into HMRC’s recent ‘legislative pilot’ proposals to test new policies or processes with smaller groups of taxpayers before rolling the changes out to the wider public, although the idea of potentially suspending the usual tax rules for selected taxpayers for a limited period has already been met with criticism.
In an initial response from the ATT, Senga Prior, chair of the ATT Technical Steering Group, said: ‘Rather than seeking to exempt taxpayers from existing rules to test new systems we think HMRC should turn this idea on its head and look to provide more exclusions and protections for those not able to use new systems or processes after they have launched.’
The ATT has also raised concerns around the additional time and cost for taxpayers and agents which could arise from being invited to participate in pilot schemes – for example, in learning how to manage and use new systems which, ultimately, may then not be introduced (or could be introduced in a different final form).
As Senga Prior noted: ‘Asking or obliging taxpayers to take part in pilots which are unlikely to result in any personal benefit to them will not prove popular.’
HMRC has paused its making tax digital for income tax self-assessment (MTD for ITSA) pilot, according to a freedom of information request filed by Saffery Champness. The response revealed that only 115 taxpayers were active in the voluntary trial at the time, with recruitment to the pilot put on hold in November 2022 alongside the decision to delay implementation of MTD for ITSA until 2026.
The firm reports that HMRC intends to launch a new testing strategy based on the revised timetable.
Lucy Woodward, Partner in the Private Wealth team, commented: ‘Even though a push in the summer of 2022 saw more taxpayers enrolled into the pilot the numbers were still vanishingly small when set against those who will be mandated to use the system in a couple of years. There have already been a number of teething problems seen with the system, and others will only be identified, and addressed, when it is tested at scale.
‘Along with MTD for ITSA, wider consultations on tax administration and payment have raised the possibility of more real-time tax payments. If the government were to move towards a real-time payment system, there are various possible options – it would be good to see them set out a detailed vision for tax administration and payment as soon as possible, which would make this clear and allow future work on MTD to develop in the right way.’
An updated MTD for ITSA pilot could, for example, tap into HMRC’s recent ‘legislative pilot’ proposals to test new policies or processes with smaller groups of taxpayers before rolling the changes out to the wider public, although the idea of potentially suspending the usual tax rules for selected taxpayers for a limited period has already been met with criticism.
In an initial response from the ATT, Senga Prior, chair of the ATT Technical Steering Group, said: ‘Rather than seeking to exempt taxpayers from existing rules to test new systems we think HMRC should turn this idea on its head and look to provide more exclusions and protections for those not able to use new systems or processes after they have launched.’
The ATT has also raised concerns around the additional time and cost for taxpayers and agents which could arise from being invited to participate in pilot schemes – for example, in learning how to manage and use new systems which, ultimately, may then not be introduced (or could be introduced in a different final form).
As Senga Prior noted: ‘Asking or obliging taxpayers to take part in pilots which are unlikely to result in any personal benefit to them will not prove popular.’
