Annual Summit 2020

Presentations & Updates

HMRC Update (as at November 2020)

HMRC have kindly reverted on outstanding questions from the BASDA virtual Annual Summit.

Question: By what date will HMRC have published definitive information on how Brexit will affect accounting systems from 2021 onwards ? (e.g. VAT returns, MOSS VAT, EC Sales Lists etc.)

Response: Further guidance will be set out on the application of VAT and Excise rules for goods in Northern Ireland in due course. Links to the guidance products will be shared once they are live on gov.uk via usual channels so that you have early sight.

Question: i) How well do you think HMRC is joined up with the agent reps and the software industry?

Response: We have started to do more with the whole IT industry through our Technology Sourcing Programme, which will open up our IT supply chain over the next couple of years, and also our innovation work. Continuing to collaborate with software providers on solutions to customer problems is certainly something we plan to do more of, and not necessarily just as part of Making Tax Digital. We recognise that HMRC cannot solve every problem itself and by working together with the software industry and with the broader technology community we can address more and do so more quickly.

Question: ii) What do you think BASDA, with its members, could do to help improve matters here? 

Response: Carry on engaging as you are.  We already have an API first policy, where appropriate, and our MTD strategy has shown the level of opportunity we see exists. The important part is for the industry to carry on being open and honest with its feedback on the challenges we bring to the table, in terms of whether there will be interest from the industry in delivering a solution to that problem. Where software developers are involved in developing solutions, it’s also paramount that options are going to be available that meet the broad requirements of everyone within a customer group. For example, for accessibility we are striving for WCAG 2.1AA for all products.

Question: In the past HMRC have adopted 3rd party solutions to enable them implement successful IT strategies. Are there any plans to consider this for the future?

Response: Yes absolutely. COVID has shown we have excellent capability to deliver solutions ourselves. But that equally opportunities exist for 3^rd party solutions to help.

Question: HMRC have been communicating regarding a no-deal Brexit – have you resources in place in that eventuality?

Response: Yes, we have a robust plan and are already ramping up resources across core operations areas according to the projected demand.

Question: A member was on an EU call last week and there was a discussion about how governments were raising funds; countries in Europe i.e. Italy using clearance models for getting tax on invoicing which has proved very successful in raising funds but massive impact on business processes on invoices in particular. Has HMRC given any consideration to this tax approach which is moving MTD forward a level and to a clearance model for tax as a way to reduce the tax gap? 

Response: As referenced in July’s Tax Administration Strategy, alongside more frequent tax reporting through Making Tax Digital the government wishes to stimulate debate on appropriate timings and frequency for the payment of different taxes. HMRC is already looking at the payment of tax at the point of sale, facilitated by an intermediary, for VAT purposes. This exploratory idea is known as a split payment model.