The Institute of Chartered Accountants in England and Wales (ICAEW) has written to HMRC with their conclusions to a review around the introduction of Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA).
The conclusion was that quarterly reporting would be an administrative burden and HMRC should rethink their current proposals.
The suggestions included:
- The informal review gives an opportunity for fresh thinking on MTD ITSA policy.
- This fresh thinking needs to be applied to all taxpayers, not just those with turnover below £30,000.
- The project should be refocused on what can realistically be delivered in 2026 and through digital record keeping software
- The administrative burden associated with quarterly updates is disproportionate and needs a rethink.
- The requirements to maintain digital records and to submit details of income from self-employment and property directly from software could be decoupled from quarterly updates, with the current annual reporting cycle being maintained.
The review is informal and no consultation document has been published by HMRC in respect of this. HMRC are expected to make a recommendation on the next steps to the Financial Secretary to the Treasury in June.