HMRC will close the online VAT return on 1 November 2022. This will force businesses not signed up to Making Tax Digital (MTD) VAT to sign up or apply for a digital exclusion exemption.

Over the summer, draft tertiary legislation (notices) were issued for MTD income tax self assessment (ITSA). HMRC has recently revised the MTD ITSA guidance on gov.uk. However, many important details about the requirements remain unanswered including:

• The need for multiple agent functionality to allow different agents to complete the quarterly and year end activities, or to submit information for different income sources (eg, for property income and for trading income).
• The design for businesses that have accounting dates that do not fall between 31 March and 5 April.
• The design for jointly owned property including how income from different property portfolios is aggregated prior to submission to HMRC needs further development and software that can deal with complex, but common, cases.
• The need for clarity over when adjustments and corrections must be included in a resubmitted quarterly update and when they can be included in a subsequent update or as annual adjustments.
• The capacity of HMRC, software developers, taxpayers, and agents to deliver MTD ITSA to the current timeline. This is a concern because of (a) the very limited scope of the pilot, (b) the lack of clarity over many of the requirements, (c) the capacity of software developers and HMRC’s customer services group to provide the support required, and (d) the current lack of awareness and resistance to the additional cost and workload involved.

Join Anita Monteith and Caroline Miskin of ICAEW’s Tax Faculty on Tuesday 20 September at 12:00 for an update on latest developments on MTD.