Mtd for it pilot a cause for concern

MTD for IT pilot a cause for concern

MTD for IT pilot a cause for concern

A leading accountancy group has raised concerns about HMRC’s Making Tax Digital for Income Tax initiative, due to be implemented for self-employed people in 2024, after the tax authority revealed it had just nine people taking part in the pilot.
HMRC confirmed the figure to the Financial Times after a Freedom of Information request by accountancy firm Saffery Champness showed a sharp fall in the number of volunteers to test the new software since the trial began three years ago, from 900 people in 2018-19 to the nine who are currently participating.
Some 4.3 million self-employed people and landlords will have to use the MTD for IT system in April 2024.
Zena Hanks, a partner at Saffery Champness, described the numbers as “stark”. She warned there may be problems when the system goes live if the number of people who have tested it was too small to be representative. “I worry what we will have in the end will be an amazing system for nine people,” she added.
Under the new system, about a third of taxpayers who are self-assessed and have either income from a business or property exceeding £10,000 a year will have to keep digital records of their earnings and expenses. These will have to be filed to HMRC every quarter, using third-party software, rather than submit an annual tax return.
HMRC told the FT that it had always planned to keep the initial numbers in the pilot low so it could “provide additional support to the first customers in the service before testing at scale”. It added that it planned to open up the trial to more people from this April, two years ahead of launch.