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MTD for Individuals Slowing Down Due to Brexit

MTD for Individuals Slowing Down Due to Brexit

HMRC had set a deadline of 2020 for the implementation of MTD for individuals. However, they have now decided to delay these plans to free up resources for work on Brexit. An email was sent out by HMRC explaining that the MTD for individuals programme has made significant progress and that foundations had been laid enabling them to return to it in the future. It explained that the ‘change in priorities’ was driven by the amount of work that will be required on sophisticated trade systems because of Brexit.

Since April 2016 every tax payer has had access to their own digital tax account. By 2020 HMRC had hoped to have a system up and running that would even pre-populate the self-assessment tax form. Whilst HMRC remains committed to their digital ambitions they have stated that they will be halting further roll-out for the foreseeable future. HMRC followed up by saying that it would encourage more customers to use their personal tax accounts and will focus on improving the existing service. They also stated that they were ‘overly ambitious’ about the number of customers who would stop contacting them by phone and post after digital channels were introduced.

HMRC has also announced that they will no longer work on plans for a new tax credit claim as no new claims can be made after January 2019. They will also pause all work on Inheritance Tax (IHT), PAYE Settlement Agreements and Tax Advantage Venture Capital schemes as these schemes impact fewer people.

The slowdown will also affect the ‘dynamic coding’ system.  This system promised to pick up over or underpayments of tax by making in-year adjustments via tax code changes but it has been fraught with errors and issues. It is therefore likely that fewer dynamic code changes will be made and if the taxpayer wants to ensure that the right amount of tax is paid through PAYE then they will need to tell HMRC about any changes that may affect their tax code.

Brian Palmer of ATT said it is not a not huge surprise that HMRC have paused the roll-out given that it had 15 major transformation programmes and more than 260 projects on the go before Brexit was announced.

Nevertheless, HMRC are still committed to becoming the world’s most digitally-advanced tax authority. It is also on track to introduce the mandatory service for VAT for those with taxable turnover above the VAT threshold from April 2019.

 

The S4B Team

We are a team of Chartered Accountants based in Maidenhead. We help our clients to implement the latest developments in taxes. Send our team an email at info@s4b.co.uk or call 01628 623444 to see how we can help you.

 

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