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digital accounts

HMRC has announced that it will be delaying the introduction of digital services for individuals.

Aspects such as the simple assessment and dynamic coding changes will now be rolled out at a later date as was detailed in an email sent out to stakeholders. HMRC has confirmed the delay has come down to a shift in key priorities driven by the need to free up civil servants for Brexit.

Chief executive at HMRC, Jon Thompson, commented:

“We feel the need to take a step back and look carefully at what we could, and should, deliver in light of those [Brexit] challenges. The things we’re stopping or pausing will slow our journey, but they don’t change our overall ambition to become the world’s most digitally-advanced tax authority.”

He continued:

“Crucially, they will allow us to support EU exit while continuing to deliver ambitious changes for our customers.”

‘Simple assessment’ is intended to be used where a taxpayer has a secondary income or gain of more than £10,000, such as from self-employment or property. It’s a tax assessment made by the Revenue, not by the taxpayer and as such, will be the opposite of a self-assessment made alongside a tax return.

Under the ‘dynamic coding’ system, otherwise known as real-time tax codes, the intention is to replace potential underpayments with in-year adjustments. The tax codes are adjusted to reflect changes in an employee’s circumstances as soon as HMRC becomes aware of the change. This system has also been hit with a range of issues however.

HMRC said in its email sent to stakeholders:

“We’re halting progress on simple assessment and real-time tax code changes. The Making Tax Digital (MTD) for Individuals programme has made significant progress, so we’ve laid foundations that will enable us to return to this in the future.”

The delay for individuals will not affect the obligation for VAT-registered business to submit digital accounts from April 2019, which remains on track after a pilot scheme got under way last month.

No new timeline is in place for the rollout of MTD for Individuals at this time.

 

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If you would like further information about MTD or would like to enquire about our tax planning services, please get in touch with PKB and we will be more than happy to help.

 

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