ICAS ICAS logo

Quicklinks

  1. About Us

    Find out about who we are and what we do here at ICAS.

  2. Find a CA

    Search our directory of individual CAs and Member organisations by name, location and professional criteria.

  3. CA Magazine

    View the latest issues of the dedicated magazine for ICAS Chartered Accountants.

  4. Contact Us

    Get in touch with ICAS by phone, email or post, with dedicated contacts for Members, Students and firms.

Login
  • Annual renewal
  • About us
  • Contact us
  • Find a CA
  1. About us
    1. Governance
  2. Members
    1. Become a member
    2. Newly qualified
    3. Manage my membership
    4. Benefits of membership
    5. Careers support
    6. Mentoring
    7. CA Wellbeing
    8. More for Members
    9. Area networks
    10. International communities
    11. Get involved
    12. Top Young CAs
    13. Career breaks
    14. ICAS podcast
    15. Newly admitted members 2022
    16. Newly admitted members 2023
  3. CA Students
    1. Student information
    2. Student resources
    3. Learning requirements
    4. Learning updates
    5. Learning blog
    6. Totum Pro | Student discount card
    7. CA Student wellbeing
  4. Become a CA
    1. How to become a CA
    2. Routes to becoming a CA
    3. CA Stories
    4. Find a training agreement
    5. Why become a CA
    6. Qualification information
    7. University exemptions
  5. Employers
    1. Become an Authorised Training Office
    2. Resources for Authorised Training Offices
    3. Professional entry
    4. Apprenticeships
  6. Find a CA
  7. ICAS events
    1. CA Summit
  8. CA magazine
  9. Insight
    1. Finance + Trust
    2. Finance + Technology
    3. Finance + EDI
    4. Finance + Mental Fitness
    5. Finance + Leadership
    6. Finance + Sustainability
  10. Professional resources
    1. Anti-money laundering
    2. Audit and assurance
    3. Brexit
    4. Business and governance
    5. Charities
    6. Coronavirus
    7. Corporate and financial reporting
    8. Cyber security
    9. Ethics
    10. Insolvency
    11. ICAS Research
    12. Pensions
    13. Practice
    14. Public sector
    15. Sustainability
    16. Tax
  11. CPD - professional development
    1. CPD courses and qualifications
    2. CPD news and updates
    3. CPD support and advice
  12. Regulation
    1. Complaints and sanctions
    2. Regulatory authorisations
    3. Guidance and help sheets
    4. Regulatory monitoring
  13. CA jobs
    1. CA jobs partner: Rutherford Cross
    2. Resources for your job search
    3. Advertise with CA jobs
    4. Hays | A Trusted ICAS CA Jobs Partner
    5. Azets | What's your ambition?
  14. Work at ICAS
    1. Business centres
    2. Meet our team
    3. Benefits
    4. Vacancies
    5. Imagine your career at ICAS
  15. Contact us
    1. Technical and regulation queries
    2. ICAS logo request

Going digital

  • LinkedIn (opens new window)
  • Twitter (opens new window)
Philip McNeil By Philip McNeill, Head of Taxation (Tax Practice and Owner Managed Business Taxes)

11 August 2020

Recommendations:

  • Digital services should be accessible to all and so good that everyone wants to use them
  • The benefits of digital administration should be shared
  • Implementation needs to be planned and staged to an agreed timetable

Philip McNeill outlines the ICAS call for clarity on timescale, sharing of benefits and a digital tax system accessible to all.

The move to digital tax administration is worldwide and to be welcomed. To ensure that benefits of digital administration are available to all, the objectives need to be clearly outlined and measurable. Implementation needs to be planned and staged to an agreed timetable.

The announcement now of the extension of MTD to income tax from April 2023 provides a good opportunity for collaborative design to maximise the benefits. This is particularly so when it comes to the triangular relationship between taxpayers, their agents and HMRC.

What has ICAS recommended?

In its Future of Taxation in the UK paper, ICAS has said that HMRC should:

  • Provide a digital roadmap to set out how digitalisation of tax will progress for business and personal tax
  • Ensure that the timetable for implementation will allow for new systems to be robustly tested with a pilot covering a complete ‘cycle’, which anyone can join
  • Clearly set out the wider benefits taxpayers can expect from digitalisation
  • Enable agents to see and do everything their clients can see and do; this must be built into all new systems from the start, so that agents can properly support their clients
  • Make digital services so good that everyone who can ‘go digital’ will want to use them

ICAS is pleased to see that the recently issued report from HMRC ‘Building a trusted, modern tax administration system’ addresses a number of the above recommendations. We look forward to working with HMRC in order to put these recommendations in place.

Worldwide digitalisation

Increasing digitalisation is not confined to the UK tax system; tax authorities around the world are adopting a digital approach.

However, in contrast to some jurisdictions, the UK starting point is a complex tax regime developed over many years – with legislation which pre-dates the digital era and is often inadequate for dealing with digital developments. This background needs to be taken into account when developing mandatory digital options in the UK.

Spreading the benefits of digital

ICAS supports the Making Tax Digital initiative as something with longer term potential for streamlining the interaction between taxpayers and HMRC. However, it is important to get implementation right and to proceed at the right pace, so that taxpayers see the wider benefits of going digital, rather than simply incurring costs to meet a tax requirement. Mandated digital interaction on a short timescale, as experienced with compulsory MTD for VAT, is not necessarily best for business. One size does not fit all; different businesses need different levels of digitalisation for maximum efficiency.

Lessons from MTD for VAT

Lessons need to be learned from the introduction of MTD for VAT before MTD for business income tax becomes mandatory. On introduction, MTD for VAT was only mandatory for businesses with taxable turnover above the VAT threshold, whereas MTD for business income tax will affect much smaller and less sophisticated businesses.

Income tax and corporation tax

Income tax returns are also far more complex, and the complexities make quarterly reporting difficult. Ideally, significant simplification would take place before MTD is extended. Work is also needed on the interaction between business income tax and personal income tax (and the Personal Tax Account and Business Tax Account). Whilst work on business income tax and the BTA has progressed, the same is not true of personal income tax (and the PTA), where work has been put on hold, leaving things in limbo and the system frequently not functioning properly.

If MTD is also to be extended to corporation tax this should take place in a reasonable timeframe. Numerous issues which would need to be addressed ahead of implementation were raised in the informal consultation meetings which took place in 2017. It is essential that a proper consultation should take place on the scope and details, followed by legislation and then at least a one year pilot (in which any company which wants to can take part).

Accessible to all

We do not support mandatory ‘online everything’ in the tax system. Digital services should be accessible to everyone and so good that everyone who can ‘go digital’ will want to use them. There must also be proper alternatives for the digitally excluded and adequate support for the digitally challenged.

The benefits of adopting our recommendations

  • Providing a robust and cost-effective tax administration
  • Offering digital tax administration that taxpayers will want to use, and which flows from their business systems
  • Integrating business and personal income tax digital systems, to facilitate compliance and provide a ‘one stop shop’ for tax compliance
  • Improving public support for tax digitalisation by ensuring it is not viewed as imposing additional costs and burdens solely to meet tax obligations

Join the debate

The recommendations in the ICAS Future of Tax paper were agreed by the ICAS Tax Board in 2020 and inform the work of ICAS Tax. They will be reflected upon and revised to reflect economic, social and political developments.

Please send us your feedback and comments by emailing tax@icas.com or login to the CA Connect forum, an area  exclusive to members where you can post your views and discuss with others.

There are also opportunities to join ICAS tax committees to discuss these recommendations and many other tax policy and practical matters – email tax@icas.com to find out more about being a committee member.

The Future of Taxation in the UK

By Charlotte Barbour, Director of Taxation and Susan Cattell, Head of Tax Technical Policy

10 June 2020

Making Tax Digital review: Lessons to learn

By Philip McNeill, Head of Taxation (Tax Practice and Owner Managed Business Taxes)

19 May 2020

2022-11-mitigo 2022-11-mitigo
ICAS logo

Footer links

  • Contact us
  • Terms and conditions
  • Modern slavery statement
  • Privacy notice
  • CA magazine

Connect with ICAS

  • Facebook (opens new window) Facebook Icon
  • Twitter (opens new window) Twitter Icon
  • LinkedIn (opens new window) LinkedIn Icon
  • Instagram (opens new window) Instagram Icon

ICAS is a member of the following bodies

  • Consultative Committee of Accountancy Bodies (opens new window) Consultative Committee of Accountancy Bodies logo
  • Chartered Accountants Worldwide (opens new window) Chartered Accountants Worldwide logo
  • Global Accounting Alliance (opens new window) Global Accounting Alliance
  • International Federation of Accountants (opens new window) IFAC
  • Access Accountancy (opens new window) Access Acountancy

Charities

  • ICAS Foundation (opens new window) ICAS Foundation
  • SCABA (opens new window) scaba

Accreditations

  • ISO 9001 - RGB (opens new window)
© ICAS 2022

The mark and designation “CA” is a registered trade mark of The Institute of Chartered Accountants of Scotland (ICAS), and is available for use in the UK and EU only to members of ICAS. If you are not a member of ICAS, you should not use the “CA” mark and designation in the UK or EU in relation to accountancy, tax or insolvency services. The mark and designation “Chartered Accountant” is a registered trade mark of ICAS, the Institute of Chartered Accountants of England and Wales and Chartered Accountants Ireland. If you are not a member of one of these organisations, you should not use the “Chartered Accountant” mark and designation in the UK or EU in relation to these services. Further restrictions on the use of these marks also apply where you are a member.

ICAS logo

Our cookie policy

ICAS.com uses cookies which are essential for our website to work. We would also like to use analytical cookies to help us improve our website and your user experience. Any data collected is anonymised. Please have a look at the further information in our cookie policy and confirm if you are happy for us to use analytical cookies: