Making Tax Digital Income Tax (MTD ITSA) registration starting soon!

MTD ITSA is at best going to be challenging for tax payers and accountants, but we love a challenge, don’t we?!

In the MTD ITSA there are

  • 900,000 Landlords
  • 2.5 Million Self Employed
  • 400,000 Partnerships

Over 130,000 probably need to change their year end and when MTD ITSA starts a single self assessment will be become 6 returns.

HMRC announced in August in there Agent Communications

Making Tax Digital for Income Tax Self Assessment (MTD ITSA) β€” Agents can sign-up customers in advance of April 2023

It has been confirmed that a bulk sign-up facility for MTD ITSA will not be possible due to several factors including each individual customer having different details to be input.

It is recognised that data will need to be input during the sign up process for each customer. It is accepted that this could be time consuming if all this had to be done at once, especially if it coincided with other peak demands such as the tax year end or VAT filing for example.

Following discussion with agents, HMRC is working to deploy a solution which will help flatten this workload. Agents will be able to sign up mandated MTD ITSA customers from 6 April 2022. This will not activate MTD obligations but will give agents the opportunity to spread the load of sign-up work across a 12-month period.

The back-end process is being worked on and further information will be issued. HMRC reaffirms, this will only come into effect from 6 April 2022 and that any sign-ups made before that date would be for the active pilot.

Agent Update: issue 87 – GOV.UK (www.gov.uk)

Since HMRC know all about tax payers (because they get annual Self Assessment Returns) and they know all about agents (because we have agent service accounts with HMRC that list our clients), why is it necessary to have a signing up process.

MTD ITSA is compulsory, so why aren’t the relevant tax payers automatically registered by HMRC?

Let’s hope HMRC can find a back-end process that will save us from manually enrolling millions of tax payers.

steve@bicknells.net

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