CIOT and ATT members remain concerned about MTD for ITSA
95% of respondents were also not confident about HMRC’s ability to oversee the introduction of MTD for ITSA, while 87% doubted it would close the tax gap
Accountants remain “concerned” about the proposed introduction of digital record keeping and reporting requirements for many income taxpayers, according to a CIOT and ATT survey.
The survey, which sought over 500 members’ views on the feasibility of the April 2026 start date for MTD for ITSA, revealed that 70% of respondents thought April 2026 was still an unrealistic start date, despite the two-year delay.
Some 95% of respondents were also not confident about HMRC’s ability to oversee the introduction of MTD for ITSA, while 87% doubted it would achieve the stated goal of closing the tax gap.
In addition, over half said that the MTD ITSA proposals had “significantly” adversely affected their trust in the tax system as a whole.
Alison Kerrey, chair of digitalisation and agent services committee of CIOT and ATT, said: “The responses from this survey make for worrying, although not surprising, reading. Despite the start date being postponed for two-years to April 2026 and the introduction being phased based on income levels, tax agents are still very concerned about the impact which the MTD ITSA proposals will have on them and their clients.
“HMRC’s insistence that MTD will make lives easier, as well as closing the tax gap, continues to be met with scepticism. There is a real lack of confidence that a convenient, user-friendly and effective system will be ready to go by April 2026.”
The government is undertaking a review of the needs of smaller businesses with respect to MTD for ITSA, to which the CIOT and ATT have contributed.
The survey also asked whether those businesses with turnover below £30k should be included within MTD for ITSA, to which 86% of respondents said they were opposed to extending MTD for ITSA to taxpayers with incomes less than £30k.
87% also stated that quarterly reporting will be of no use to those small businesses.
Kerrey added: “Tax professionals are clearly strongly opposed to extending the MTD for ITSA requirements to businesses and landlords with incomes below £30k, seeing little to no benefit in quarterly reporting requirements and many of the other ‘pillars’ of MTD. We will continue engaging with HMRC to help MTD for ITSA become an effective, relevant and user-friendly system.”
