It is generally accepted that the introduction of the Real Time Information (RTI) system was botched by HMRC, and now a tax charity is calling on HMRC to use the lessons that it learned from the process to improve the Making Tax Digital (MTD) programme.
The recommendation has come from a tax charity which claims that a published review of RTI reveals that although the programme benefited HMRC, it disadvantaged many businesses.
The charity thus says said that to prevent the same thing happening with MTD, HMRC must learn the lessons of RTI and improve its performance on consultation, implementation and communication – the three areas where even HMRC admits it botched proceedings.
Yvette Nunn from the Association of Taxation Technicians said: “HMRC [acknowledges it] did not sufficiently understand the costs to small businesses of real-time reporting. [Officials must] … consider whether they are making the same mistake again with MTD. Many businesses… regard the government’s estimates of their costs, in both time and money, as unrealistically low.”
A review of RTI was published recently with the aim of investigating if the programme had achieved its aim, and if not, what had gone wrong so as to improve future programmes.
In the report, HMRC acknowledges that it did not have a sufficient understanding of the cost to small businesses of the introduction of real-time reporting.
However, Nunn said that the cost of MTD is only one of the issues faced by small businesses. She said that guidance and the targeting of communications are also important to get right.