Making Tax Digital

[etf]

My takeaways from the article:

-MP Murray's decision making is reckless.
-HMRC's forecasts cannot be relied upon.
-Labour don't care about the costs small business will incur for questionable benefit and the time individuals will have to devote/waste on yet more red tape viz quarterly reporting that nobody will look at.


What the article doesn't cover:

-The huge overspend on this project...no wonder RR has budget worries when HMRC can spend, spend, spend/waste, waste, waste... so much money.
-The effect the overspend has had on HMRC service standards elsewhere viz waiting 12 months plus for HMRC to deal with tasks...waiting over an hour for someone to answer a phone...if they do answer.
-Why King Charles knighted the leader of this shit show.

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This was back in 2023:

The NAO report notes that: HMRC's initial estimate in 2016 of the cost of introducing MTD for VAT, Income Tax and Corporation Tax was £226 million. The total forecasted cost for MTD for Income Tax alone is now £1.3 billion, a 400% increase in real terms.9 Aug 2023

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By philaccountant
27th Mar 2025 11:03
This is spot on. They are about to create a time crisis in this profession and they are clueless about it because they have never spoken to anyone at the coal face who is going to have to implement the "plan".

The time and resources available to make these submissions doesn't exist, therefore the quality of everything else is going to fall to hit these deadlines. It's completely inevitable.

Just utterly crazy.


By kdbr
27th Mar 2025 11:23
Not forgetting that in those quarterly windows you will also be fully engaged with the SA returns for the previous year etc etc

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Reckless MP Murray perhaps rattled by someone mainstream (at last) criticising his MTD4IT plans....Desperado, why don't you come to your senses?

By ireallyshouldknowthisbut
28th Mar 2025 15:00
Mike Warburton wrote:
Emma

You may be interested to know that I received an e mail this morning from the HMRC press office asking me to add the following to my article;

An HMRC spokesperson said:
“We’ve worked extensively with customers, representative bodies and software developers to ensure MTD works well for small businesses and landlords.”
“MTD is designed to reduce time spent on record-keeping and tax administration, giving self-employed taxpayers more time to grow their business.”

.

Mike

Repeating that strapline does not make it true

its a gross imposition of red tape and will make LESS time for growing a business. if small business even want to grow - most are deliberately small with no intention of growth.

[Blueberry]

TICKING TIME BOMB

There is nothing more demoralising than being ordered to perform an impossible task and being screwed if you cant do it.

I have just seen an accountant for the first time. I have a German BTL. I get very late statements from the management, but too late to provide info for that quarter. As such, and just as if they were half yearly statements, it would be IMPOSSIBLE to provide quarterly inputs in time for MTD

The statements are in PDF format relating to an account with the management, that I have no access to. As a general remark how can this be synched, like a UK business account. It CANT. It also comprises, for the business and flats above it, hundreds of entries, relating to all sorts of costs/income some of which do not have any equivalent due to the nature of differences in way things are done in UK and Germany. Previously I determined the change in the amount of this escrow account, and added the fixed payments to my personal German ban account (which also I use for non business). So this software would have to convert PDF to Word, translate German perfectly, categorise each weird entry into UK equivalent. As a former software engineer and someone who's job it was to look at complex control systems etc and tech in German language and considering nuances also, I can assure you the software will fail. There is also DE tax payments I get via my DE accountant and German mortgage interest (again PDF) to consider.

I have had a small UK sole trader consultancy for the last 3 years; I was told by the accountant I would need a seperate business account. Even then thee are some entries that get divided according to HMRC rules e.g. proportion of council tax on a flat I use as my office, so what happens there?

It would be easier for me to emigrate, this is not a flippant remark. I would also avoid the extra 20% tax the UK gov takes over and above the 20% HMRC takes, pay no GCT on German property when its sold, and of course HMRC would get no income tax. Seriously this is for me very disturbing, HMRC already has glitches for self assessment where the system cant cope with DE tax anomalies wrt to DE tax relief.

I think a lot of people especially if near to retirement will pack up, leave the country etc. For the individual it is a nightmare, for the UK it will massively erode tax take, all for the sake of pathetic dogma, enforced by HMRC and Gov PAYE people who do not have to worry.

Thanks for reading

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It must be quite stressful for MP Murray knowing he is driving a vehicle that most people are predicting is going to crash:

https://www.accountingweb.co.uk/tax/personal-tax/im-an-mtd-taxpayer-get-me-out-of-here?cm-uuid=9c7e48c7-22ae-47eb-ae35-da823e2668af&utm_medium=email&utm_campaign=AWUKMON230625&utm_content=AWUKMON230625+CID_c197855a7c041a9323000297cfd5f7a2&utm_source=internal_cm&utm_term=Im%20an%20MTD%20taxpayer%20get%20me%20out%20of%20here

Summarised quite nicely here if you can't be bothered with the link:

By Tornado
20th Jun 2025 17:40
Your comments highlight more of the already hundreds of anomalies with MTD.

MTD is Pointless and totally unnecessary when we already have system called Self Assessment which easily deals with the hundreds of problems that MTD cannot, and in many cases, may never be able to.

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https://www.linkedin.com/posts/tom-bickle-4b15601a7_mtd-itsa-freedom-of-information-foi-request-activity-7338153348392509441-BuCs/

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By EasyMTDVAT
26th Jun 2025 21:45
As a software developer (currently in the process of putting together a bridging solution for MTD for Income Tax), I'll be amazed if it goes ahead in April 2026. The api endpoints seem to be devised by the work experience kid; The documentation is lacklustre and inconsistent; Core functionality is still being changed; Certain things work one way for one tax year and another way for other years; Certain endpoints can still only be used in the sandbox environment... Its a mess that even the biggest shovel will find difficult to clean up in eight months.

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Crikey, the MTD4IT car MP Murray is driving has turned into a half built rocket. Has Sir Keir got another U turn on the horizon?

By North East Accountant
27th Jun 2025 12:51
That's like launching a half built rocket to the moon and praying that the rest is built and fully working in time for a soft landing, on a hard date.


By kevinringer
28th Jun 2025 09:41
But that's completely against the online service recommendations laid down by Lord Carter and accepted by HMRC. To comply with Carter, the cycle of reporting needs testing, including capacity testing, 12 months before mandation. In other words, mandation can only start 12 months after all systems are complete and capacity tested. Systems are not complete and not capacity tested, which means MTD cannot start 06/04/2026 and will have to be postponed until 06/04/2027. Unless HMRC ignore Carter, which might well happen because there's probably no one in HMRC who remembers it.

HMRC ignore the Taxpayers Charter so why not add Lord Carter to the list.

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Lord Carter's recommendation:

The building blocks
23. We recommend that as part of their work to deliver robust, high-capacity services HMRC should build in more rigorous testing. Each of the services should be capacity tested at least a year before our recommendations are implemented, and if any tests are not successful the measures relating to that service should be deferred.

It appears there are doubts about how robust the systems are as well:

By kirsteno
27th Jun 2025 15:16
From the Accountability Club Webinar. I enrolled to get all the information I can, including this little nugget.

Jake Smith AWEB “ I think this is a Yes or No answer. "Are HMRC going to see every entry into tax software as it happens. If we're talking about pulling back those calculations each time."

Chris Downing from Sage. "Based upon on how it is built at the moment the answer is Yes. But like everything a Yes can turn into a Maybe depending upon on how the software vendors speak to HMRC. Because we don't want to put too much burden on the systems ”

So "based on how the system is built at the moment". Do I have tell you why I lack confidence?