MTD pilot goes live on Monday 3rd. April
HMRC’s public beta testing programme for Making Tax Digital (MTD) went live at the beginning of April, meaning that MTD is now a working reality. There are two pilot projects in place: one looks at keeping business records digitally while the other looks at the online services that tax agents and accountants will use. A handful of agents are taking part in the pilots and more will be added in late April. By May it should be possible for those taking part to file MTD updates.
Reactions from tax professionals at a recent conference were mixed. Some welcomed the pilot because it meant that they would be able to begin preparing for the transition to MTD. Others queried whether HMRC fully appreciated the difficulty that many small businesses would have in using smartphones and apps to keep their records.
The HMRC representative replied that, although it was accepted that changing attitudes would not be easy for a percentage of smaller businesses there was no excuse not to embrace technology. The days of keeping records on paper and reconciling them once a year had to be abandoned in order to cut down on the number of mistakes which inevitably occur with such systems. The tax gap is currently £8bn which, in HMRC’s opinion, is largely attributable to poor record keeping.
Since the pilot began, there has been a lively correspondence on accountants’ websites querying whether HMRC fully understands that MTD will not encourage small business owners to upload their accounts on a daily basis to their smart phones or tablets.