You may have seen that yesterday we published the consultation documents for Making Tax Digital (MTD). MTD is at the heart of our plans to make HMRC one of the most digitally advanced tax authorities in the world.
The consultations build on the vision from our MTD Roadmap published in December 2015 and follow months of constructive discussions with business and agent groups. They also feature some significant changes we’ve made following those discussions.
These include exempting an additional 1.3 million of the smallest businesses from mandatory digital record keeping and quarterly updates, although they can still choose to do it if they wish. The government is also considering deferring MTD for the smallest businesses if they need it and exploring options to provide financial support to help businesses with the transition.
The six consultations set out more detailed proposals about the design of MTD and seek views from businesses, individuals and their representatives to help shape it. The main focus is on businesses, setting out how the digital record-keeping and quarterly updates will work, as well as proposals for simplifications, including extending the scope of cash basis accounting.
Agents, individuals and business will be interested in the consultation on how HMRC will make better use of information from third parties by using it in real-time to improve the customer experience, which will bring phased improvements from April 2017. They will also be interested in the consultation looking at aspects of the tax administration framework that need to change to support MTD.
Agents are an essential part of our tax system, and we want to continue to work with you to develop the detailed design of the MTD for all individual and business customers and their agents.
The consultations run until 7th November 2016 and we look forward to speaking with you about these consultations and reading your responses and ideas.