Quarterly reporting software will have to be compatible with HMRC’s systems

Businesses will have to use software that is compatible with HMRC’s systems to submit quarterly updates of their tax and accounts details Treasury minister David Gauke has confirmed.

He was replying to Andrew Tyrie chair of the House of Commons’ Treasury select committee who had expressed concerns about the extra burden placed by Making Tax Digital (MTD) on businesses.

Mr Gauke described the current way of filing tax returns as ‘an outdated system designed for a world of paper and not fit for the 21st century’. He said that MTD would give businesses ‘greater control certainty and confidence’. The ‘software will do much of the work to provide HMRC with the required information for the quarterly updates so submitting an update will feel very light touch’.

He implied that the government had made it clear in the December 2015 MTD road map and in his...