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MTD 5/7: “voluntary” pay as you go

November 7, 2016

“Voluntary” pay as you go.  How voluntary is voluntary?  I’m already suspicious, given that MTD was originally supposed to be MTE: Making Tax Easier, not “Digital”.  No mandation without representation!  It’s also about rights: the government doesn’t have any right to the money until the day that the liability is crystalised, so this whole “voluntary but we’ll restrict your power to get it back” thing in the consultation worries me.  In fact it reminds me of when my mum was £1000+ in credit with the electricity and I tried to get them to repay her. The damn fool woman on the helpline told me it was their job to prevent their customers getting into debt.  No it isn’t: it’s your job to sell electricity, just as it’s HMRC’s job to collect the right amount of tax when it’s due.

The consultation seems to me to be very light on the consideration of interest when surely that’s the way to get “voluntary” pay as you go moving.  Pay 2% interest on tax paid early and I think the government might find payments were a great deal more timely than they are at present.

Make it easy for people to pay their taxes (a lot of the problems reported by the profession are pure HMRC problems – misallocation of payments, ignoring instructions, making unwanted repayments that generate unfair payment demands) and a lot of the remedy is in HMRC’s own hands.  If they put their own house in order, if the MTD record gave a clear statement of all liabilities and their due dates, if the government paid 2% on money paid before it was due and charged 3% on money paid afterwards, well, wouldn’t this issue disappear altogether?

I’m short of time so I have given the specific questions below the cut but I will actually be responding with an email.  You can too: the email address for this one is makingtaxdigital.consultations@hmrc.gsi.gov.uk and the consultation closes – they all do – at a quarter to midnight tonight!!!

 

 

(Final note: I know I’m starting to look like the proverbial man with a hammer, to whom everything looks like a nail, but I have to comment on the impact assessment.  According to the impact assessment, moving to voluntary pay as you go won’t have any impact!  Actually I think this is the one likely to have the most profound impact of all, at least as far as the individual taxpayer is concerned, and I think if it worked well it would have an enormous (albeit temporary) positive impact on the government’s cash flow, sufficient to counterbalance the impacts they’re worried about in terms of overlap relief and other timing changes.)

Question 1: Do you see any challenges with the voluntary payments process
described? Do you think there are alternative options that should be
considered, and if so, what are these?

Question 2: Do you have any views or suggestions on the display of voluntary
payments in the digital tax account?

Question 3: Should there be a ‘period of grace’, and if so, what period would be
appropriate to allow for separate payment of an amount becoming due

Question 4: Do you have any general comments to make on the allocation of
voluntary payments?
Question 5: Do you foresee any problems with HMRC’s intended approach to
the allocation of voluntary payments?

Question 6: What improper or inappropriate use of the repayment facility do you
think there may be, and what rules do you think should be applied by HMRC to
stop that happening?
Question 7: Do you agree with a restriction on repayment shortly before a
liability becomes due, and if so, what period or terms of restriction do you think
should be put in place?

Question 8: Do you have any views or evidence on whether, and how, HMRC
should revisit the sums paid as payments on account to match more closely to
the sums being reported under MTD?

Question 9: Do you have any views or suggestions on customers’ ability to elect
for overpayments to be held as voluntary credits?

Question 10: What are your views on how voluntary payments might work for
partnerships? Do you think partners will see the convenience of direct payment
towards their total liabilities as outweighing a loss of a limited amount of
confidentiality?

Question 11: Do you think there are any special considerations that should
apply to third party voluntary payments?

Question 12: What additional processes or measures would make customers
feel more confident about making voluntary payments?

Question 13: Do you have any suggestions for the basis on which earlier
repayments could be reasonably claimed?

Question 14: Please tell us if you think there are any other costs or benefits not
covered in the summary of impacts below, including any detail you may have.

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