Making Tax Digital scheme five times over initial budget
The Chartered Institute of Taxation (CIOT) has criticised HMRC’s handling of the Making Tax Digital project, saying it has spiralled out of control. What’s happened, and what is the latest timetable for rollout?
In a press release, the CIOT commented on a report by the National Audit Office (NAO) that states that the MTD project is now expected to cost five times it’s original budget. The institute said that HMRC was pursuing unrealistic timetables with questionable benefits. It also noted that the move to MTD with the VAT system initially led to VAT liabilities being overstated by £5 billion. The NAO is calling for a fresh business case from HMRC in respect of MTD for Income Tax Self-Assessment (MTD ITSA).
It’s unclear whether the report will have any effect on the anticipated rollout of MTD ITSA, which has already been pushed back. Until anything is announced, it is prudent to assume that things will proceed according to the most recent timetable, i.e. April 2026, with the self-employed and landlords with turnover in excess of £50,000 joining first. Those with income over £30,000 but not exceeding £50,000 will not need to join until April 2027. A start date for general partnerships has not yet been announced. The position for smaller businesses remains uncertain, as HMRC continues to review the suitability of MTD ITSA for these entities.
Related Topics
-
Tax relief for lending to your company
You can usually claim tax relief for money you borrow personally to lend to your company. It sounds straightforward but there are in fact a number of restrictions to trip you up. How do you secure the tax relief?
-
Who can't yet sign up for MTD IT?
Making Tax Digital for Income Tax (MTD IT) becomes mandatory from April 2026 for sole traders and landlords with qualifying income over £50,000. However, HMRC’s current guidance makes clear that not everyone can sign up yet. If you are preparing early, are you actually eligible?
-
Pay self-assessment tax