HMRC must not be “complacent” as MTD for income tax draws near, says new ATT president

Speaking at the Association’s annual general meeting today, at which she officially took over from Simon Groom, Senga Prior said the flagship digital programme, which has been beset with delays, must work effectively for taxpayers and agents when it is brought in.

Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) will require businesses to keep digital records and use compatible software to file quarterly updates of their income and expenses with HMRC, in addition to their current annual tax filing requirements.

In December 2022, the Government announced that the proposed introduction of MTD for ITSA for sole traders/landlords would be postponed from April 2024 to April 2026. Those with income above £50,000 would be mandated from that date, with those whose income is above £30,000 joining in April 2027.

Senga said:

“MTD for income tax is a little under two years away and represents a fundamental change in how taxpayers and agents interact with HMRC, and with each other. The ATT has been involved with this project since it was first announced in 2015, and it’s fair to say it’s been a rocky road!

“Despite numerous delays and changes, we look to be closer than ever before to MTD becoming a reality. However, HMRC cannot afford to be complacent, and must ensure the project does not deliver excessive costs for minimal benefit.

“We’ll be keeping a close eye on progress in the run up to 2026, engaging with HMRC to ensure our members’ voices are heard and will be looking at how we can support members through what will no doubt prove to be a tricky transition.”

Senga said the ATT’s other “big challenges” for the year ahead include HMRC service levels and the regulation of tax agents.

She added:

“We continue to raise concerns over whether HMRC are sufficiently resourced to deliver for taxpayers.

“In the last year, we have seen several closures or restrictions to the Self-Assessment helpline, one in the run-up to January’s tax return deadline, as well as frequent complaints from members about the ability to get through to HMRC and have their questions answered in a timely manner. HMRC clearly wants to shift more customers to digital platforms, and that’s a reasonable aspiration, but are those platforms fit for purpose?

“We also believe requiring all tax practitioners to be registered with a professional body is a good first step towards a strengthened regulatory framework, but raised concerns about how such changes could profoundly impact the ability of some tax practitioners to legitimately remain within the tax advice market.

“We are urging the new Government and HMRC to be clear as to what the current problems in the tax market are, understand which type of agents are causing the issues and how the proposals will seek to address these.”

Graham Batty was also appointed as Deputy President of the ATT at the meeting, with Barry Jefferd taking up the post of Vice President.

Watch the full AGM.¹

Notes for editors:

1. The AGM is accessible using the password DGH534NVX.