A new investigation has revealed that just nine people are taking part in a trial for Making Tax Digital for Income Tax (MTD ITSA), despite the scheme being set to roll out to millions of self-employed workers from 2024. The Financial Times and Saffery Champness have worked together on the investigation and found that in 2018-2019, the trial had 900 participants, but that this has fallen to just 9.
Stuart Miller, product compliance and industry engagement manager at accountancy software provider Xero, said that having just nine people trialling MTD ITSA was too small a number: “Until there are a significant number of taxpayers included in the pilot, it’s difficult to determine how fully robust the system will be,” he said.
Under the MTD ITSA, anybody with combined annual earnings of more than £10,000 from self-employment and operating as a landlord will have the way they file their taxes changed. Those affected will have to complete their tax returns digitally and submit updates every three months, in addition to completing their annual tax return at the end of each year, which they are already required to do.
On top of these changes, self-employed workers and landlords will have to license accounting software to be able to complete the reports.
Emma Rawson, technical officer at the Association of Taxation Technicians, said that many self-employed workers that she had spoken with were unaware of the introduction of Making Tax Digital. Rawson added that they were “quite horrified to learn they’d have to buy software in a couple of years [to do their taxes]”.
The software has to be from approved providers and the Government is currently offering discounts for small businesses.
The announcement of the limited trial for Making Tax Digital will only add to mounting concerns over the new rules and how prepared those who will be affected by the changes are. In a recent survey by FreeAgent, two out of three UK employees said they were looking to start their own business, however, 82 per cent were unaware of the pending introduction of Making Tax Digital.
