In part three of his series of articles on the Making Tax Digital pilot scheme, Darren Powell points to a few glitches that HMRC needs to iron out before the system works as it is designed to do.
I am almost a year in to the pilot now, and I had hoped to make the fourth quarter MTD submissions for the quarter ending 5 April 2018 before this article went to press. While I had made every effort to try to get this done, there are unfortunately some unresolved issues that have prevented me from doing so.
Some may recall that I had previously written about issues regarding the inability to view the past obligation periods, and also that filing confirmation messages were still not available. These problems are no nearer being solved.
I could continue to make submissions and I am confident that these will be successfully transmitted and received by HMRC. However, I am more interested in seeing the system work as it is intended, and for the sake of the pilot I can see no advantage to me filing my data if I will not be receiving the expected confirmation messages or viewing the prior obligation periods. This would not be testing or adding any value to the pilot, in a situation where we know it will fail from the outset. I am sure those agents who are following the MTD pilot will be in agreement.
In contrast to my experiences a few months ago, I have to say that HMRC have upped their game. Any questions I have put to them have been responded to with increased urgency and a sense of willingness that I thought was previously lost. It is also clear that the technical team is working hard behind the scenes to address issues and resolve them. This certainly does inspire confidence, but only when the submission issues are fixed will I feel confident to enrol many other clients.
The IT team at HMRC implemented an upgrade on 12 April which HMRC had hoped would resolve the issues. This did not work, but a further change is planned in the next week and l do hope this is successful as it will be a positive step forward.
The software provider we are using is confident that this problem originates from HMRC and submissions the software provider have carried out on the test service, are working as they should be. With this in mind, I am musing over whether I should try to convince one of our other clients to sign up and prove if the issue is resolved with new enrolments. Perhaps the issue is with old data held by HMRC, and improvements to their systems since we first enrolled has altered the integrity or tagging of the data? I must state that I have no sound basis for this pondering and I will not pretend to understand the complexity or the scale of this.
If all goes to plan, I will soon be able to make a prior period amendment to one of my obligation periods. This, followed by the fourth submission for the year, will then leave me with the final submission for the year ending 5 April 2018. The final submission, as I understand it, will be able to be made at the same time as the fourth quarter submission if no other data is required to be submitted (such as bank interest, dividends, etc). HMRC have advised me that I will be able to make this final submission for one of our clients through the MTD platform, but not until later in the year – presumably when their systems have been fully tested to accept the final submission. This will at least mean no self-assessment tax return will be required for this client.
In respect of the other three clients, at least one of these will be expecting a tax refund due to CIS tax suffered at source, so we will need to file a self-assessment tax return in the normal way. Our clients have been amenable to the pilot but a delay to their tax refund as a result of waiting for the increased MTD functionality may be beyond the call of duty!
It would be interesting to see how other agents have been getting on with the pilot, so would an MTD forum would be of benefit to ICPA members? This may be a useful platform for us to exchange views and questions within our community.
The pilot has now been rolled out more widely and HMRC have a dedicated MTD team. For those who are interested in participating details can be found at https://www.gov.uk/guidance/ agents-use-software-to-send-income-tax-updates.
- Darren Powell ICPA is a Partner at Fraser & Co, based in Shepton Mallet
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