Only nine persons participate in a pilot program that will roll out Making Tax Digital to more than 4 million self-employed people by 2024.
According to a Financial Times investigation and accountant Suffer Champness, the number of volunteers participating in the trial has decreased from 900 in 2018-19 to only nine this year, according to HMRC.
From April 2024, 4.3 million self-employed and landlords will be required to file digital returns under the Making Tax Digital for Income Tax (MTD ITSA) initiative. Anyone with combined self-employment and a landlord income of more than £10,000 will be enrolled in the plan.
Currently, self-employed people only have to file one tax return at the end of the year, but MTD ITSA will require them to submit updates every three months. Each year, there will be an end-of-year statement and a “finalization return” (today known as a tax return). This means that the present single annual self-assessment tax return will be replaced with six reports to HMRC.
Furthermore, self-employed and landlords would be required to license accounting software from licensed suppliers, although the government presently grants small businesses up to £5,000 in software rental discounts.
Many self-employed people she spoke to were ignorant of Making Tax Digital and were “quite upset to learn they’d have to acquire software in a couple of years [to pay their taxes],” according to Emma Rawson, technical officer of the Association of Taxation Technicians, a professional organization.
According to Stuart Miller, product compliance and industry engagement manager at accountancy software vendor Xero, the number of people trialing MTD ITSA is far too small.
“It’s difficult to judge how robust the system will be until many taxpayers are included in the trial,” he told the newspaper.
Zena Hanks, a partner at Saffery Champness, said that if the number of people who tested the system was too small to be representative, there could be issues when it goes live.