HMRC’s Making Tax Digital Income Tax Self Assessment (MTD ITSA) initiative is the main focus of the Administrative Burdens Advisory Board (ABAB) just-published 2023 annual report.
It welcomes the tax authority’s addressing of ABAB’s key concerns outlined in its 2022 report, including deferring MTD ITSA from April 2024 to April 2026, together with a review focused on those with qualifying income below £30,000.
In her introduction to the report, ABAB Chair Dame Teresa Graham says on MTD that “having felt frustrated at times that our advice has not always been listened to and acted on, we have been encouraged by the more collaborative approach we have witnessed over the last 12 months,” adding “there is still much to do, however, and it is absolutely vital that the collaborative approach is maintained.”
The report repeats ABAB’s earlier caution that the MTD ITSA pilot will be mission-critical, and that as many real-life scenarios as possible must be thoroughly and successfully tested through the system before it is adopted.
It added that it was “fully supportive of MTD’s core aim of improving the quality of business records”, adding “as we have said in previous reports, change must be implemented in the right way and at the right pace: tax is not and never should be the only driver for change.”
ABAB’s report said it was supportive of the Single Customer Account (SCA), which will bring together all tax information for a particular taxpayer in one place.
The report also focuses on the Check Employment Status for Tax (CEST) tool for deciding whether to classify a worker as employed or self-employed. Having said in its 2022 report that CEST was not sufficiently robust, ABAB notes in the latest report that CEST has moved to a new platform and that customer satisfaction scores have improved as a result.
ABAB provides HMRC with independent insight on issues relating to the regulation and administration of tax for small businesses, using information and feedback generated by its annual survey.
As we have said in previous reports, change must be implemented in the right way and at the right pace: tax is not and never should be the only driver for change.”
ABAB, 2023 Annual Report
