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Making Tax Digital

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Making Tax Digital (MTD) is at the heart of our plans to transform the tax system, delivering a real time system that is more effective, more efficient and easier for taxpayers and agents.

The introduction of digital tax accounts will enable agents, where their client has given them permission to do so, to view and manage their clients’ tax affairs in one place.

Over 90% of agents can and want to use digital services and 95% already file online. And the majority of clients already provide their tax information digitally, with 99% of VAT returns, 98% of Corporation Tax and 86% of Self Assessment done online. The new digital accounts will enable agents to provide their clients with more certainty over their tax bill and access to an in-year picture of their tax position.

MTD does not mean four tax returns a year. The new digital accounts will integrate all the different information individuals and businesses already provide to HMRC into a simple, streamlined system; and once a quarter businesses and agents can check and submit the information they have been collecting digitally to HMRC. This will remove the requirement to collate and prepare the onerous annual tax return.

No additional records are needed for MTD either. The increased digitalisation will improve the quality of records, and reduce errors – meaning fewer of your clients facing the shock of a bigger tax bill than they expected at the end of the year.

Earlier this month we published a video on YouTube explaining how tax is being digitally transformed for businesses, and how MTD will make life easier for business.

For many clients using an agent is a considered choice and the introduction of MTD is not intended to change the professional relationship that exists between clients and their advisors. Many businesses will continue to choose to pay an agent to manage their tax affairs, enabling them to focus on their businesses.

Agent Online Self Serve (AOSS) is working with MTD to start enabling access to business digital services. Agents access to their client’s Digital Tax Accounts online will be enabled through third party software or web interfaces, where their client has given them permission to do so. Over 1000 agents are using an AOSS private beta service providing a view of employer client’s PAYE liabilities and payments. Other agents who meet the criteria will be invited to take part in the AOSS private beta service over the coming months. Updates on AOSS will be provided through regular briefings to stakeholders and posts on this blog.

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