A number of key projects at HM Revenue & Customs (HMRC) have been placed on hold to make staff available for Brexit issues, including Making Tax Digital for Individuals.
The simple assessment rollout and real-time tax code changes, both part of MTD for Individuals, will not be introduced as planned according to an HMRC stakeholders email due to a “change in priorities” in the department as it focuses on creating sophisticated digital trade systems.
The email stated that while its transformation programme was on schedule it had not necessarily been “smooth sailing”.
It states: “We were overly ambitious about the number of customers who would stop contacting us by phone and post after we introduced digital channels. Demand is falling, but not by the amount assumed in 2015.”
Despite changes to MTD for Individuals, HMRC has insisted that the Making Tax Digital (MTD) for VAT programme, due to come into effect in April 2019, will remain on track. However, it is yet to comment on MTD for other taxes, which is expected in April 2020 at the earliest under the current implementation timetable.
“The MTD for Individuals programme has made significant progress here, so we’ve laid foundations that will enable us to return to this in the future,” the email said.
“We will pause work to digitise services that impact fewer numbers of customers, such as those paying Inheritance Tax, or applying for Tax-Advantaged Venture Capital Schemes and PAYE settlement agreements.”
Among the casualties of the delays will be simple assessment, which was intended to take two million people out of self-assessment and ease the Revenue’s workload.
However, HMRC has previously revealed that it has encountered issues for taxpayers and problems for their tax agents, with taxpayers only being given 60 days to correct errors.
Yvette Nunn, Co-Chair of ATT’s technical steering group, welcomed the pause to these projects, but called on the Revenue to “use the extra time given to iron-out the known problems with simple assessment and dynamic coding before they hit play on them again.”