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Published on 12 August 2022

Making Tax Digital for Income Tax: draft tertiary legislation

LITRG has responded to HMRC’s consultation on the draft Notices required under the Income Tax (Digital Requirements) Regulations 2021. We took the opportunity to express continued concern about the readiness of the MTD for ITSA (Making Tax Digital for Income Tax Self Assessment) programme for a ‘go live’ date of 6 April 2024.

LITRG response. MTD for ITSA: Draft tertiary legislation. Illustration of man drinking a hot drink whilst looking at a computer screen.

We observed that the intention to relegate much of the detail that was expected to be in the Notices to guidance was not satisfactory and identified many key areas where we felt specific details should be included in the Notices.

We also highlighted a number of technical areas which the requirements of the draft Notices did not seem to deal adequately with, and so which, in our view, need reconsideration. 

We also noted a number of concerns, including:

  • that the MTD process is imposing obligations on some taxpayers which will be significantly more onerous than current legislation requires for establishing their income tax liability; and
  • that there is an expectation Quarterly Updates will be reconciled to taxable profits by the End of Period Statement, which is unrealistic for unrepresented taxpayers.

We urged HMRC to provide comprehensive and thorough guidance for MTD for ITSA in a timely manner, bearing in mind that some people are already trying to get to grips with MTD for ITSA in the pilot.

The consultation can be found here.

Our full response can be found here.

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