Welcome to the April 2023 Newsletter from Walsh & Co

The deferral of the Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) will cost the Exchequer over £1.75 billion, figures published at Spring Budget have showed.

Meanwhile, think tank the Resolution Foundation has found that Britain's economy remains 'stuck in a deep funk' despite Chancellor Jeremy Hunt announcing a wide range of policies at the Spring Budget designed to help get people into work.

Treasury estimates MTD for Income Tax deferral will cost over £1.75 billion

Figures released in the Spring Budget documents have revealed that the deferral of Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) will cost the Exchequer more than £1.75 billion.

The Financial Secretary to the Treasury previously announced that the £10,000 turnover threshold for MTD for ITSA will increase to £50,000 from April 2026 and £30,000 from April 2027. Meanwhile, the mandation date for partnerships was pushed back from April 2025 to a later date.

The Budget figures suggest that the cost of these changes will total £1.75 billion.

Reviewing the figures, the Chartered Institute of Taxation (CIOT) and the Association of Taxation Technicians (ATT) stated that MTD for ITSA's benefits may have 'begun to flow more quickly' if the government had consulted stakeholders earlier and worked more closely in partnership with them.

Commenting on the issue, Alison Hobbs, Chair of the joint CIOT and ATT Digitalisation and Agent Strategy Committee, said: 'The announcement to defer the implementation of MTD for ITSA, and subsequently introduce it in a staged manner, was clearly the correct one. The incredibly limited testing, combined with significant problems still to be resolved, meant that this delay had to happen. However, according to government figures, the cost is clearly substantial.'

Budget boosts employment but living standards falling, says Resolution Foundation

Chancellor Jeremy Hunt announced an impressively broad suite of policies in the Spring Budget to encourage more people into work, but Britain's economy remains stuck in a 'deep funk', according to the Resolution Foundation think tank.

Although the think tank says Mr Hunt will succeed in boosting employment, it warned of a 'disastrous decade for living standards' with real household disposable incomes now lower than they were pre-pandemic.

It did welcome changes to childcare support as 'much needed help for parents' that will encourage more parents to work.

However, it criticised the changes to pension allowances as 'an unneeded tax break for wealthy pension savers'.

Torsten Bell, Chief Executive of the Resolution Foundation, said: 'Jeremy Hunt's first Budget was a much bigger affair than many expected, combining improvements to the dire economic and fiscal outlook with a significant policy package aimed at boosting longer-term growth in general, and the size of the workforce in particular. A step change in childcare support stands out.

'But stepping back the UK's underlying challenges remain largely unchanged. We are investing too little and growing too slowly. Our citizens' living standards are stagnant. We ask them to pay higher taxes, while cutting public services.'

ESSENTIAL TAX DATES FOR APRIL

5 April

• Last day of 2022/23 tax year.
• Deadline for 2022/23 ISA investments and pension contributions.
• Last day to make disposals using the 2022/23 CGT exemption.

14 April

• Due date for income tax for the CT61 period to 31 March 2023.

19 April

• Automatic interest is charged where PAYE tax, Student loan deductions, Class 1 NI or CIS deductions for 2022/23 are not paid by today. Penalties may also apply if any payments have been made late throughout the tax year.
• PAYE quarterly payments are due for small employers for the pay periods 6 January 2022 to 5 April 2023.
• PAYE, Student loan and CIS deductions are due for the month to 5 April 2023.
• Deadline for employers' final PAYE return to be submitted online for 2022/23.

QUOTE OF THE MONTH

'The interests of small firms should be at the heart of any trade discussions and politicians must create a better, more small business-friendly conditions to help SMEs achieve their trade ambitions on both sides of the Atlantic.'

Tina McKenzie, Policy Chair at the Federation of Small Businesses (FSB), commenting on data that showed that the US tops the list of most desirable countries for UK firms to trade with outside of Europe.

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