PAYROLL INSIGHT
Will MTD make tax easier?
Samantha Mann MAAT, MCIPPDip, CIPP senior policy and research officer, brings us up to speed with developments
S o much has been said and written about Making Tax Digital (MTD) that it is quite hard to believe that it hasn’t yet been achieved. I think it is fair to say that from the viewpoint of a payroll professional, MTD began with Patrick Carter’s recommendations to move (in a leisurely and planned manner) to the online submission of employer annual returns followed swiftly (or so it seemed) by the roll out of real time information (RTI) – or ‘near real time’, as is more the case. Transform the tax system The former Chancellor, George Osborne, announced during the Spring Budget of 2015 that “the government will transform the tax system over the next Parliament by introducing digital tax accounts, removing the need for annual tax returns. By the end of the next Parliament over fifty million individuals and small businesses will be able to see and manage their tax affairs online.” Since then the accounting profession has been on alert and barely a day has gone by when MTD hasn’t received a mention (or two) in the press.
So what has happened with MTD to radically transform the tax system and ‘make it digital’ since the Spring Budget of 2015 (other than a general election and a referendum), and we ask this question almost mid-way between the beginning of the ‘next Parliament’ and its end. Jargon When it comes to jargon the payroll world can hold its head up high and be proud of the contribution that it makes to complex acronyms, idioms and just plain confusing terms – and I offer ‘optional remuneration arrangements’ and ‘OpRA’ to prove my argument. However, when it comes to the use of jargon, MTD transformation is becoming a world leader in terminology and patois that does little to help and much to confuse. However, a particular word is being used more consistently. ‘Transformation’ is the word on everyone’s lips across government and is used to introduce the work being carried out to bring the tax administration (and other working areas) into the 21st century. If you think making your office paperless is challenging, imagine what a challenge
MTD is proving to be for HM Revenue & Customs (HMRC). Whilst all consultation forums across government are being impacted by the digital strategy, the CIPP policy team is privileged to be representing the payroll viewpoint on two forums that have being created specifically to aid the delivery of ‘transformation’ to make tax digital. The MTD Upstream compliance forum aims to provide the technology and support to help ‘customers’ to comply with their tax obligations. This forum looks to use third party software to provide prompts and nudges at the early or input stage to prevent errors being submitted to HMRC. We in payroll have become familiar with this built-in functionality that prevents us from, for example, inputting a National Insurance number using the wrong format or a format of letters that hasn’t yet been brought in to use by the Department for Work and Pensions. Our software prevents us getting this wrong and thus failing the validation process when we submit. We also sit on the MTD for Business forum which focuses on two main areas impacted by MTD transformation: business and individuals. Recent examples of working include the introduction from this month of ‘dynamic coding’ – or rather ‘PAYE refresh’ – which looks to reduce the
...MTD transformation is becoming a world leader in terminology and patois...
| Professional in Payroll, Pensions and Reward | May 2017 | Issue 30 20
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