Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) - HMRC Q&As

HMRC have provided a list of Q&As to the most commonly asked questions during their MTD for ITSA webinar held on 29 July 2020.

Due to the large number of questions asked on the day (more than 300) they were not able to answer anywhere near all of the questions during the webinar itself. They have therefore provided all attendees with answers to a few of the more commonly asked questions.

The Q&As are here.

In addition, we understand that there were some complex questions being asked and some things are still in the early and developmental stages, which means that HMRC are not yet in a position to answer all the questions but that they will be reviewing and categorising the questions, and seeking clear answers where they can to help inform what they cover in future webinars. 

In respect of the two most commonly asked questions which were about free software, and COVID-19 support, HMRC have provided the following additional information:

Free software
“Free software will be available under ITSA for those taxpayers with the simplest affairs. And you will rightly ask what does that mean? Two things here. The announcement of ITSA coming in 2023 was only made on 22 July 2020. As you will have seen on the software choices pages not many products have yet been through our testing process and put up on GOV.UK. The software developers did not know the announcement was coming, but they have reacted quickly and positively to start discussions with HMRC to look to start developing their products. This will take time, probably many months of development and testing before they come to market.

“Equally, HMRC have started discussions with software developers to explore and define what will need to be included in such free software products. Again, this will take a little time, but is the key building block that we need to have in place”.

COVID-19 support income
“As regards COVID-19 support income, frankly, neither we nor you could have expected the devasting effects of the pandemic, and the speed and scale of the Government interventions. We had not factored such income into our design plans and, to build them in now would take too long and would not be in place before April next year, when a new tax year will start”.