MTD for ITSA Publicity boost needed
An HMRC survey around the awareness amongst taxpayers of the next phase of MTD has shown it is sadly lacking. Many of those likely to be affected by the forthcoming Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) in 2024 are unsurprisingly unenthusiastic, but also many are unaware.
The HMRC survey showed:
- 38% of taxpayers agreed using MTD-compatible software would be easy, 35% disagreed and 14% were indifferent.
- 49% of taxpayers agreed submitting quarterly returns would be easy, 39% disagreed and 11% were indifferent.
- 54% of taxpayers respondents already complete their record keeping quarterly.
- 45% of taxpayers still use paper while only 17% use software.
As a result, the Chartered Institute of Taxation (CIOT) and the Association of Taxation Technicians (ATT) are calling on HMRC to increase the publicity.
Andrew Jackson, vice-chair of the joint CIOT and ATT digitalisation and agent services committee, said: “The survey results show an alarming lack of readiness and enthusiasm for MTD, fuelled largely by a lack of awareness that MTD for ITSA begins in less than two years’ time. This is why we have encouraged HMRC to publish more detailed guidance about the MTD process, as there are seemingly more questions than answers at the moment.’
We would wholeheartedly agree!
When the first phase of MTD was rolled out, many businesses were unaware of the looming changes required, until we raised the issue.
Whilst we see this as part of our service for existing clients, it’s essential that ALL businesses are aware in plenty of time of changes they will need to make. It should not be down to Accountancy firms to publicise HMRC schemes.
The most important issue is that it takes a significant amount of time to educate yourself around the options you may have as a business owner, faced with changing requirements. You need plenty of time to fact- find, and from there to make informed decisions and implement new processes, all alongside running a business!
If you are in the fourth category listed above, and are still using paper for your records, now is the time for you to start fact-finding, if you haven’t already.
What is MTD for ITSA?
The requirement for individuals with total gross income above £10,000 from self-employment and property to keep digital records and send information to HMRC directly from those records. This takes effect from April 2024.
If you are a sole trader or Landlord and are affected, you can register for MTD for ITSA here. You will need to use a software package that’s approved by HMRC for your future filings, so you’ll need to find MTD compatible software.
If you’re a client of ours, we will take care of the registration for you, and support you through the choice of software and its implementation. We’d recommend that you make the move to a software option at your next year end, so you have time to become familiar with how it works before you are required to make the regular HMRC submissions.
As ever, if you have any questions or concerns about MTS for ITSA, please get in touch.