Making Tax Digital Deadline and Cheques

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0:30originally deposited, and any profit you might have made. This is not a recommendation or offer to buy, sell, or attain any specific investment or service. Fall tastes better with better ingredients from Whole Foods Market. No added growth hormones or antibiotics in their meat department means slow-braised short ribs are even more satisfying. All seafood is wild-caught, like their vibrant sockeye salmon or verified responsibly farmed. and all sweets, including fall-themed cookies, are made without high-fructose corn syrup. Spice up fall at Whole Foods Market. Hello, welcome to this Moneybox podcast.

1:09Capita's share price plummets as MPs say it has apologised too much and done too little about civil service pension failings. Banks are not reimbursing customers all the money stolen by thieves, despite rules intended to make them pay up. And you will be allowed to tie up your black horse at the local post office, just not yet. But first, more than 400 ,000 people have not registered for a new tax reporting system just four weeks before the deadline. Perhaps they think that more paperwork is the last thing they need. But from this year, 860 ,000 self-employed people and landlords must start reporting their income and expenses five times a year instead of one.

1:55The deadline for the first of these five reports is less than a month away, but half of those affected have still not even registered, never mind sent any figures to HMRC. It's called Making Tax Digital, and it affects small businesses with sales above£50 ,000 a year. They have until August 7th to do a mini tax return of income and expenditure. and to do it they must use commercial accounting software and then do it all over again every three months and then a fifth time at the normal filing date of self-assessment by the 31st of January 2028. Our reporter Joe Krasner has been speaking to two listeners who've emailed Moneybox about the new system.

2:37David is a self-employed conductor and composer. He has bought the new software. The thing about being self-employed is the lines between what is business and what is personal expenses are not blurred, but you need to basically divide up your expenses. It's not difficult once you get the hang of it, but the software that we've used, we've bought the software, is not conducive to allocating different bits of a purchase to different cost centres, if you like. And how much did this software cost you? Well, we've gone for a kind of medium range, so it's not that much. I mean,£10 a month, I think. So what do you think of making tax digital?

3:21Is it helpful? I don't know whether it's a good idea or not. I mean, there's no benefits for me, I don't see. So it must be the only benefits for HMRC. HMRC haven't issued any software of their own. I mean, the HMRC website that I've been filling my tax return in for the last 25 years is brilliant. It's really good. It's really clear. This just makes it even more complicated. David hasn't actually filed his figures yet. And Tim, a self-employed furniture maker and designer, hasn't even started the process. There's all these different kinds of software that you can use, and they've all got their own idiosyncrasies about how they work and the terminology they use.

4:02And there's nothing really which is guiding you in the process. So you have to use your best judgment, I suppose. And I know there's no penalties for the first year, which is useful, because I'm sure that I'll get some element of it wrong. Knowing me, I'll mostly be waiting until the last minute, but submit it in time so that if I do something wrong, I've got some time to correct it. Listening to David and Tim is Jonathan Athow, Director General, Strategy and Policy at HM Revenue and Customs. Jonathan Athow, David and Tim are finding the new system more complicated, time-consuming, confusing. Why have you done this to them?

4:40So, firstly, I think it's really good that people like David are engaging with the program. We want to change the way – we're not changing people's tax liabilities. We're not changing the requirement to keep good records, but we are changing how people report that. And we want people to be keeping records closer to real time. That's why we're asking people to update us every quarter, because if you keep records as you're going along, they're more likely to be accurate. And also, the software will also then allow you to understand where your finances are and give you, for example, an estimated tax bill at the end of the year.

5:14Yes, but successful small self-employed businesses having to send five tax returns rather than one, what tangible advantage will it bring to them? It will just be more difficult. David said no benefits for him. So first of all, they're not five tax returns. What happens every quarter is a summary of the income and expenses you've entered into your software. So that's all that happens. There We're still an end-of-year process. But what we're asking people to do is bring forward that record-keeping. Rather than waiting until, say, January and going through, say, a box of receipts, we're asking people to keep record digitally because they'll be more accurate and less likely to be lost than paper.

5:55So to keep that record closer to real time. David did say he liked the current self-assessment website where you fill in the form. He said it's easy. Been doing it for 24 years. is why are you banning people like him from still using it and having to buy commercial software that they've got to pay for, learn, incorporate and make sure it works? So as I said, the key aim here is to encourage closer to real-time record. But why not do it through the website, through your own system that most self-employed people I know say works very well? So the challenge with this is we've got a wide variety. Within that 860 ,000, you've got a huge variety of different types of taxpayer, landlord.

6:37We've got, you know, self-employed people. And what we're seeing is the software industry is providing lots and lots of different products tailored to particular needs. We're also seeing a large number of free products for those who've got the simplest affairs. So we are seeing support there for all those different types of types of taxpayer. Yes, I mean, they were around before, weren't they? but you still had your own website to do the self-assessment, which, as people say, is very successful. Anyway, you're not doing that. Let me go on to the 400 ,000-odd people who haven't signed up with less than four weeks to go.

7:11How worried are you about that? So we were always expecting the first year of this to be a sort of a build through the year. We're seeing, as we're getting closer to that first deadline, we are seeing increased numbers of take-ups, sign-ups every day. but we were always expecting this to take that first year to be quite slow and as Tim said there are no penalties in the first year for missing any of those deadlines so we know that some people will probably do it but probably miss that first deadline. Yes or may not even bother at all if there's no penalties may they but next year it applies to people with a turnover of 30 ,000 not 50.

7:50Let me play you Eve she's a psychotherapist in her late 70s and she's trying to avoid using that new system next year? I just find the whole process, frankly, terrifying because of my complete hopelessness around spreadsheets. And so I don't do spreadsheets. I've never done a spreadsheet. I'm really frightened of them. And the digital exclusion seems very unclear. So it all seems a big grey area and I don't want my tax to be a big grey area. So I'm just going to keep to the lower amount and not work as much. So Jonathan, I say the whole process is terrifying. So much so for Eve that she'll just do less work and try and avoid it.

8:30That can't be what you intended. No. So for someone like Eve, and obviously I don't know her circumstances, people who are worried about this and don't have the skills or the capabilities to operate some of the digital systems, they can apply for a digital exemption. We've had 7 ,000 applications for this. We've granted just over 5 ,000 applications. So if people are worried about this, they can apply for a digital exclusion. We've provided, I think, your team with the address they would need to write to to claim that digital exemption. The other thing I would say is there's some really good advice out there now on lots of different bodies.

9:11One I would call out that's not H1C is the Low Income Tax Reformers Group. they've got some really good advice on making test digital aimed at people who don't have an agent don't have a bookkeeper or an accountant to support them so lots of good advice out there and let me ask you finally about all these adverts for commercial software that you can't turn on commercial television or listen to the radio without seeing them but in fact you don't really need them do you you do need a spreadsheet and software that bridges those figures into hmrc it can be done that easily and free so we've created a system where there's lots of flexibility Some people want the full function software that we're talking about.

9:49As you say, we've created the ability to use spreadsheets and then use something called bridging software that takes the data from their spreadsheets and uploads it into our system. There's lots of flexibility out there. One thing I would encourage people to do is do some research on software. Find the right software for them, because that will really help the process as we go through the year. That's a skill many people don't really have, Jonathan. But thank you very much indeed. And if you want to find out more or know more, it's gov.uk and you search Making Tax Digital.

10:43are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made. This is not a recommendation or offer to buy, sell, or attain any specific investment or service. Fall tastes better with better ingredients from Whole Foods Market. No added growth hormones or antibiotics in their meat department means slow-braised short ribs are even more satisfying. All seafood is wild-caught, like their vibrant sockeye salmon or verified responsibly farmed. And all sweets, including fall-themed cookies, are made without high-fructose corn syrup.

11:18Spice up fall at Whole Foods Market. Thousands of members of the civil service pension scheme continue to face long delays in getting pension payments and even answers to basic questions from the pension administrator, capita. This week, capita's share price has plummeted nearly 30 % after damning condemnation in the House of Commons and a dramatic joint select committee hearing on Wednesday when the firm apologised again but still had no solutions for the retired and retiring civil servants and many civil service widows too, still no closer to getting the pensions, lump sums or death benefits which they're entitled to.

12:00Moneybox's Dan Whitworth, of course, has followed this story from the very start. Dan, tell us more what happened this week. Well, just a bit of background then, Paul. So the Civil Service pension scheme, as you know, is one of the largest in the UK, 1.7 million members. But long delays have left some of them in the most dire financial straits. Thousands of them have had to take out emergency loans issued by the government, totaling more than£15 million. There are many more thousands of cases, as you said, Paul, like widows waiting months for payouts and members with maxed out credit cards and missed mortgage payments.

12:33So it was no surprise when Nick Thomas-Simmons, he's the Minister for the Cabinet Office, which has overall responsibility for the pension scheme, stood up in the House of Commons on Monday and addressed fellow MPs with the facts. The reality is they were completely unprepared. Their system was overwhelmed and it resulted in a backlog that skyrocketed to a staggering 120 ,000 unresolved cases. He was also clear about who he expects to pay them millions of pounds of taxpayers' money spent on 140 staff from HMRC, described as a surge team, brought in by the government as emergency help, which began their work back in February.

13:14Public money will not fund Capita's failings. We will recover every single penny of these surge costs directly from Capita, and I will not remove a single member of this team until this service is permanently fixed and fully restored. But when the chief executive of Capita, Adolfo Hernandez, was quizzed about this on Wednesday in front of a rare joint hearing of the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee, the MPs listening weren't impressed with his answer. This surge team, though, that's being funded by Capita or is it being funded by the government?

13:54Well, we never intended, in the first place, we never intended to have a search team. No, I know, but is it being funded by the government or capita? I made an offer to, a commitment to the Paymaster General, the Minister of the Cabinet Office, that we would start picking it up from April. And we haven't had a commercial discussion. I'll stop you there, Adolfo. I don't know whether you were listening to the, I think you were listening to the previous hearing. The Minister said that was completely unacceptable, that you had got to pick up the entire bill of the surge tea from 2nd of February when it started.

14:34I heard him saying that. We haven't had that conversation yet. I made enough of that. Well, surely it would be reasonable for this committee that you make a commitment this morning, because considering the government was good enough to put that surge tea in, and as you heard me thank the surge team, the whole situation would have been far worse without the surge team. I would agree. Can you make a commitment this morning on behalf of Capita that you will pay from the 2nd of February? That seems to me only reasonable. I think there are a number of variables here. I don't want flannel. I don't want flannel.

15:06I want a commitment. Well, that was the chair of the committee, Sir Geoffrey Clifton Brown, you heard there. He did not get that commitment and actually described Mr Hernandez's reply as appalling. Earlier in the day, the MPs heard from HMRC's Angela McDonald who talked through some of the worst cases, those of widows and bereaved family members who are facing long delays getting death-in-service payments. 7 ,603 are families where further benefits are due and of the people in that process, nearly 2 ,000 of those people have been sat in that queue for more than four months. Now on hearing the delays that many of the people are facing, many of the people in that room, the MPs and people watching were visibly shocked and the audience in fact were involved again when responding with what can only be described as derisory laughter when Capita's Chris Clements made this claim about call waiting times.

16:04We've stirred up a second call centre, we've massively increased the amount of training and we are now answering the calls within eight minutes and over 50 % of those calls are one and done, so they are completed on the call where the person gets the action that they want. So with more apologies, broken promises and missed deadlines than you can count, Deputy Chair of the Public Accounts Committee, Clive Betts, made this point to Capita's Richard Holroyd. I'm going to ask this very bluntly. When you came before and gave us a commitment about timescales and finishing, I said to you at the end, why should I believe a word you tell us?

16:46I was wrong to believe you then. Why should I believe you now? I don't have an adequate answer, really, because I can say it again. And I'm sure that you'd be in the same position. We have to prove through delivery. And that's the only answer I can give, really. Richard Holroyd giving no answer at all there, Dan. And Dan, what's the PCS union said about this pension scheme not being brought back in-house? Well, it's described that decision as unacceptable. Now, the Cabinet Office, which again, as I say, has overall responsibility for the civil service pension scheme, says it has, though, drawn a line in the sand that it's withholding payments to capita and is now, quote, actively shaping a long-term strategy to bring this pension scheme in-house.

17:33but it did add, Paul, that immediately terminating the contract would actually cause more problems, severely disrupt the pension payroll, jeopardising the financial security of hundreds of thousands of public servants. OK, Dan, thanks. Rules which make banks reimburse victims of fraud are to be reviewed. after complaints by trading standards that one rule excludes many victims of complex investment and romance frauds because claims have to be made within 13 months of the final payment. Called mandatory reimbursement rules, they were introduced in October 2024 and they apply to victims who've been groomed and tricked into transferring some or all of their own money to criminals.

18:16We revealed though on Moneybox in April that some victims of complex investment frauds often don't realise they're being robbed for well over a year. When they finally do put in a claim, they're told, too late. People like Moneybox listener Sarah. The timing is critical. And with this particular kind of investment, you often only have a payment after a year. They don't tend to be regular things that you can pick up on all the way through. It's devastating. You can't describe that you feel that you've trusted in something. I've been very stressed by it, a bit confused by the response from the bank as well.

18:51Yes, and it's really floored me, actually, the fact that it's happened to me. The review will be part of a consultation later this year, and that follows a report published this week which found the new mandatory scheme had improved things. The number of people being reimbursed rose from just over half of all cases to nearly two out of three. And where claims are made in time and fall within the scope of the policy, banks are now reimbursing 97 % of victims, but only for around 87 % of the money they've lost, leaving them with£32 million stolen, not reimbursed. Well, I'm now to talk to David Jeel.

19:29He's Managing Director of the Payment Systems Regulator, responsible for these rules. David Jeel, there were high hopes for this new scheme. How does it match up? Well, Paul, we're very pleased with the way the scheme has landed. As you say, 97 % of people are now being reimbursed. Well, if they're in scope of the scheme. That's correct. The mandate was given to us was to introduce a reimbursement policy for authorised push payment fraud using faster payments. So that's the bank to bank system or CHAPS. In that area, we have seen fraud reduce and we've seen reimbursement increase. That's in the context, though, of fraud rising globally.

20:09And I would recognise that it is a continuing battle across the piece. Why is there a 13-month deadline to claim? I mean, with the previous scheme, the voluntary one it replaced, you've got six years, didn't you, to make the claim? Now it's just over a year and just not enough for people to realise in many cases. So I think it's important, Paul, to draw a distinction between the mandatory reimbursement policy and customers' rights more generally. So the mandatory reimbursement policy does set 13 months. That matches what's in the payments services regulations for unauthorised fraud. That's why we set it to that level to start with.

20:47Sorry, but under the predecessor scheme, it was six years. Why have you brought it down? Were the banks lobbying you? Well, Paul, this is the distinction we need to make, which is this is for the mandatory scheme. Customers can still complain if they become aware of something they feel is a shortfall on behalf of their bank or payment firm for up to six years or three years from when they become aware of it. So this is the distinction. So between the mandatory scheme, which deals with things quickly, without fuss, and 97 % of people are benefiting from that. But it doesn't remove people's rights to still complain if they feel their bank or payment firm has let them down or to go to the financial ombudsman.

21:23But research by a regulated claims management firm looked at 591 cases under the old system, all refunded in full. It found two out of three would have been excluded from the mandatory scheme because they took 27 months, not 13, to report the theft. So this is why we carried out an independent review pool, was to look at how the scheme was working. We've done that. We've taken account of the findings. And we've said that over the summer, we will look at a number of things, including the 13 months, which has been raised recently by consumer groups. And we will look at whether changes need to be made to the scheme.

22:00Right. So you'll be looking at that over the summer. There's also this limit of 85 ,000. You know, if you lose more than that, you don't get the rest back. Why hasn't that increased to 120 ,000? Like you get back if a bank goes bust and you lose all your cash. You set it at the same level initially, but the cash one has gone up and yours is still at£85 ,000. Many people lose a lot more than that. Well, what we found is that 99 % of claims to authorise push payment frauds, that's the ones within the scope of this scheme, are being reimbursed in full under that£85 ,000. So it is a very small proportion of claims that are outside of that.

22:35That is still distressing, it is still important, but this does not remove consumers' rights to still complain and goes to the financial ombudsman. This is about the mandatory reimbursement scheme that works within five days for simple claims, 35 days more complex. People can still complain if they have bigger claims. I absolutely understand that. I'm just asking why you haven't put it up, because the cash one has gone up, which you tied it to, and this one hasn't. So we didn't expect it. It was the same number, I agree, but we did not tie it explicitly to the financial services. You said this is primarily to bring the new reimbursement in line with other customer protections, and make it inline and consistent.

23:13That's what you said. That is where we started and we said we would review that through the independent review. We did not tie changing it to any other number. We have looked at that and 99 % of claims are covered by the£85 ,000. OK, thanks very much, David Jeel. We can expect a review later this year. David Jeel from the Payment Systems Regulator. Lloyds Bank has given in to pressure from customers and MPs and will reverse a decision which currently bans its customers paying cheques into their Lloyds bank account at a post office or banking hub. Moneybox listener Robert says that original decision was a mistake.

23:49This nonsense that you don't get cheques anymore. If you change your car, the refund from the DVLA is a cheque. A couple of weeks ago, the power was off and cheques in compensation came, not arseful, but they came through the post and you have to pay these in. This nonsense that nobody uses cheques is just not true. Well, Dan is still here. Dan, when did this ban begin? Well, Lloyds told customers early last year that from the start of 2026, it was going to stop letting its customers deposit cheques in a post office or a banking hub. Instead, it introduced a new free post service, where customers can post their cheque or hand it in at a post office, but they won't process it on site.

24:29Now, that decision came in for some criticism, and a cross-party campaign began, supported by 121 MPs, by the way, to try to get that decision reversed, and that has now happened. although Lloyds has only committed to reinstating the service until 2030. So on Monday can Robert stroll down to his local post office and pay in those cheques? No. So in a statement Lloyds told Moneybox that Cheques use continues to decline and most of its customers deposit them through its app at a branch or via its free post option but it admitted that while these services are working well it recognises that some customers want greater choice So it's working to make cheque deposits available through the post office and banking hubs again, but it could not tell us when that change will be made.

25:14And the post office told us that will happen as soon as possible. Thanks, Dan. Well, as the Lloyds' black horse walks slowly back to the local post office, do you like to buy things at the Gallup? If you use buy now, pay later, your shopping spree might fall at the first fence from July the 15th, when new rules begin to stop customers taking on too much debt. So next to drop on your podcast subscription will be Moneybox Live with Felicity Hanna to discuss what will change and will it work. As always, you can let us know your experience of any money or indeed equestrian topic or buy now pay later, of course.

25:53Email moneybox at bbc.co.uk or send us a voice note or a message on WhatsApp 0306 783 183 and those emails and messages have come in, mainly about making tax digital and Lloyds, I have to say. In today's podcast, the reporters were Dan Whitworth and Joe Krasner, researcher Catherine Lund, studio manager Ben Houghton, output producer Craig Henderson. Our editor is Jess Quayle. I'm Paul Lewis and this was a BBC Money and Work production for BBC Sounds. I'm the BBC's climate editor Justin Rowlatt. In the 20 years I've been covering the green movement, I've noticed its evolution has been formed not only by protest or by dire warnings about climate change, but by conflict within the ranks.

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