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17 Aug 2011
PROPOSALS TO introduce compulsory online filing for VAT returns is being legally challenged by three business owners who are unable to use computers, Accountancy Age has learned.
HM Revenue & Customs released a consultation document this month aimed at decreasing the use of paper filing and registration, in line with government-wide thinking. However, unlike the Department for Work & Pensions and the Driving Standards Agency, HMRC has offered no exemptions to vulnerable individuals who are physically incapable of accessing online services.
Further reading
The proposals extend the current policy of compulsory online filing for businesses with a turnover of £100,000 and above. If the proposals go through, they will apply to all businesses from April 2012.
However, in November 2010, three appellants who own businesses with a turnover of £100,000 and above applied to a judge to continue to be allowed to file paper VAT returns. The individuals include a resident in an area of little broadband access, someone with arthritis and a business owner who has sight problems and water on the brain (hydrocephalus). They have all said that, although the turnover of their businesses is relatively high, the profit margins are low and implementing the equipment required to go online would put them out of business.
The judge's ruling at the pre-tribunal stage will stand until there is either a full tribunal or an agreement is reached. A few days before the full hearing was scheduled in June, HMRC has offered the individuals the option of telephone VAT returns or employing an advisor to complete the returns.
However, Robin Williamson, chair of the Low Income Tax Reform Group, said the telephone option will create extra burdens and the businesses cannot afford to employ advisors.
The legal challenge is unlikely to go further until after the proposals in the current consultation document are finalised. However, they currently only offer exemptions to insolvent businesses and certain religious groups.
Robin Williamson, technical director of the Low Incomes Tax Reform Group, said that the individuals involved are waiting on the outcome of the consultation document. The proposals as they stand are not acceptable, however.
"There isn't very much overtly stated in the consultation, but one hopes by the end of the consultation period, there will perhaps be a little more on digital assistance," he said. "We hope HMRC will take seriously the fact that there are a great many people in areas of the country where broadband is slow or non-existence, or those that cannot afford it, or those that have disabilities that prevent them from doing so."
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Visitor comments Add your comment
A specious argument?
I should like to know whether these individuals prepare their own accounts and tax returns because if they have an accountant, it would be a very simple matter for the accountant to register as a VAT agent for the client. Then the client telephones or posts the VAT return to the accountant who files the figures online.
Since the accountant will not be preparing any figures himself, the filing itself will only take a matter of minutes. A few quid at best and perhaps even free.
I would love to know what kind of businesses these are which generate a turnover in excess of £100k but no computers are used whatsoever.
An area of "little broadband access" isn't necessarily an area of "no broadband access". We don't have much information on that score. Would be interested to know what part of the country they are in. In any event, one doesn't necessarily require broadband to access the internet. Also, no doubt, the local library or coffee shops etc. have public computers available for a nominal charge.
Posted by: Simon Paskin, 17 Aug 2011 | 13:25
Thankyou
I think its about time that someone had the guts to stand up to HMRC. Why should any one be forced to use the internet to submit VAT returns/Corporation tax returns/PAYE returns/personal tax returns(albeit with looser deadlines).
I think it is against the human rights act for HMRC to insist on online filling so I am pleased that 3 people have stood up. If they need funding please let me know.
Please note Im not against online filing for those who want to do it, just against enforcing it on those who dont.
Posted by: Adrian T, 17 Aug 2011 | 14:55
Online Filing
I am very pleased that there has been a challenge to compulsory online filing and very much hope that the individuals are successful and online filing becomes optional.
Yes for most people online filing is more efficient and suits them however it should always be a choice.
Online filing automatically assumes that you own a computer, know how to use it , have boroadband access and have a basic idea of how to use the internet.
None of these things should be assumed by HMRC as a given and to do so violates the individuals human rights.
On the other hand paper makes no pre assumptions other than the individuals ability to read and write which they would need to be able to do anyway to fill the return in online.
Individuals should not be forced to purchase and learn how to use computers to file statutory returns which are not optional and for which they can be fined for non compliance.
I have two friends who run their own business' that barely know how to turn a computer on. their wives deal with their VAT returns but who knows what they would do if they weren't available.
To summarise I believe compulsory statutory returns should always be able to be filed simply with the ability to read and write and with no other pre conditions attached.
Posted by: Steve Humphreys, 17 Aug 2011 | 17:04
iXBRL
Given the way in which iXBRL has been foisted upon us, don't hold your breath.
Every argument against compulsory online reporting for VAT also applies to iXBRL.
Posted by: Greg Hays, 18 Aug 2011 | 10:44
Online Filing
Is this a suitable subject for an epetition?
Posted by: Keith Potter, 18 Aug 2011 | 11:51
Its true Simon
But it is not down to individual businessman. There are many aged Accountants not properly computer literate are unable to cope and I do not blame them for it. HMRC is trying to unifying the compliance requirements in line with EU are rest of the world. This is efficient and inevitable. This is flowing Charles Darwin Theory of evolution by national selection, in a way. All my PDFed CT600s were deleted. My outcry was not heard, I did not have even a reply. I am a quick learner, I learned that I have to assimilate and resistance is futile!!!! Therefore, I learned to accept and spent my ever squeezed pocket money to learn iXBRL tagging mechanism. I can assure you if we follow the flow keeping our resistance to the minimal, its fun. Indy, MCOM, FCMA
Posted by: Indy, 18 Aug 2011 | 12:02
The BIG SWITCH
Switching all to on-line seems to overlook the fact that all is then reliant on the electricity plug on the wall of the office.
As one of the old timers I remember the power cuts of the 70`s when we romantically ticked and vouched by candle light. This is what the Guardian reported in December1970
The power strike also threatens to hit many thousands of paypackets. A survey by the National Computer Centre yesterday revealed that 70 per cent of the nation's biggest computers have already suffered stoppages through the reductions and blackouts.
We are in the process of bringing back the windmill, perhaps the abacus will follow shortly.
But then who am I to stand in the way of the juggernaut driven by Messrs Progress.
Posted by: Tony Kazaz, 19 Aug 2011 | 09:14
Really!
Contravene's the Human Rights Act to enforce online filing? Get real, please! You could apply that to any new regulation.
Tell me how it is more difficult for a person with arthritis, or someone who is very short sighted and suffering from hydrocephalus to use file online rather than filling in a form by hand! How do these people manage to run their businesses?
Also, tell me how a business with a relatively high turnover but a low profit margin can not afford to buy a £300 pc/laptop? That is never going to put any business in danger of financial collapse!
Online filing does not require expensive software, you fill in the details on the HMRC website, so therefore it does not preclude you from keeping a manual book keeping system in any case (and basic accounts packages are very cheap/free anyway).
People are looking for the Govt to reduce the cost of civil services, yet they oppose such measure! Sheesh!
Posted by: Pete Swift, 23 Aug 2011 | 14:41