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HMRC recently announced that it will be delaying some aspects of Making Tax Digital (MTD), while it reallocates officers and government departments to help in preparing the UK for Brexit. Here, we take a look at some of the new digital services that have been put on hold. 

Projects subject to delay

With more government resources being reallocated to prepare for Brexit, the following projects have been delayed in line with HMRC’s new priorities:

1. Introducing further digital services for individuals

Two of the key services which are subject to ‘halted progress’ are Simple Assessment and real-time tax code changes. Simple Assessment forms part of the government’s ‘commitment to abolish the tax return’, and provides HMRC with a new power to make an assessment of income tax or capital gains tax (CGT) liability without the taxpayer needing to complete a self assessment tax return. HMRC will assess an individual’s liability ‘on the basis of information held by it’.

In April 2017, HMRC began to use PAYE information in order to make in-year changes to tax codes in real-time. However, the Revenue has confirmed that progress in regard to real-time tax code changes will be ‘halted for the time being’.

HMRC has said that it will continue to develop and provide additional services only where ‘significant savings’ can be made, or levels of phone or postal contact can be reduced.

2. The digitalisation of services impacting on fewer individuals

Other services in HMRC’s plans for digitalisation include the making of inheritance tax (IHT) payments, applications for tax advantaged Venture Capital schemes and PAYE Settlement Agreements. HMRC confirmed that it will pause work on digitalising these services.

3. The online service for new tax credit claims

This new service will now not take effect. However, the drive to improve the existing Tax-Free Childcare (TFC) system will continue.  

4. The creation of single digital accounts for all business customers

This is still going ahead, but will happen at a slower pace. HMRC stresses that this delay will not affect the delivery of MTD.

Projects that remain ‘on track’

The following two MTD projects are still going ahead as previously planned:

1. Voluntary Making Tax Digital for Business service for income tax

This pilot remains available for sole traders wishing to make quarterly updates to HMRC on a voluntary basis.

2. Making Tax Digital for VAT

MTD for VAT is still on track to commence in April 2019. VAT-registered businesses with a turnover above the VAT registration threshold (currently £85,000) will need to keep digital records and make digital VAT submissions for all VAT periods commencing on or after 1 April 2019. HMRC has confirmed that no further MTD requirements will be mandated before 2020.

Here at Practice Track, we ensure we stay up to date in relation to Brexit and MTD. Our comprehensive MTD factsheet contains information on the key issues your clients should consider. To find out more, or to place an order, please email