HMRC 'not ready'
Making Tax Digital likely to be delayed two years
Plans to impose digital tax returns on the self-employed and small businesses are being delayed for a further two years, it has emerged.
Whitehall sources say computer systems are not yet prepared for the Making Tax Digital switchover which would require 4.2m taxpaying businesses to file their returns four times a year instead of the current annual submission.
The intention to launch the multibillion-pound programme, called “Making tax digital”, was first announced by George Osborne in the spring budget of 2015. It has already been postponed from next April to April 2024 and this is now expected to be pushed back to 2026.
The changes affect anyone with annual income of more than £10,000 and aim to claw back some of the estimated £32 billion which HMRC believes is underpaid in tax each year, amounting to 5.1% of the UK’s annual tax bill.
There was no confirmation of the postponement from HMRC. However, three big accountancy firms have told The Times that the move to 2026 was to be announced shortly.
Nimesh Shah, chief executive of Blick Rothenberg, said the lack of HMRC preparation for the introduction had been “shambolic”, adding that no pilot had been carried out to test the software.