THE ATT has called on HMRC to delay the introduction of quarterly digital reporting by at least a year, in order to avoid the ‘huge’ embarrassment to itself and the government if the project goes awry.
The ATT’s plea comes just days after HMRC announced that it is delaying the consultation on digital tax accounts until after the EU referendum on 23 June.
Number of concerns
Fears have been raised that such a delay could truncate the consultation process given that beta tests for the quarterly system are slated to commence in July, while advisers are supposed to be able to manage clients’ affairs from December.
The digital record keeping form part of HMRC’s new online tax system – which will eventually replace annual tax returns and will be adopted by millions of individuals and businesses. Making tax digita; is one part of a radical overhaul that will see the taxman slash hundreds of jobs and plough £1.3bn into digitally transforming the way it administers tax.
In light of HMRC’s recent announcement, the association predicts that the government will issue all five consultations in one go with simultaneous deadlines, rather than in stages, in order to maintain HMRC’s ability to launch a public testing phase by April 2017.
The ATT believes this will limit the time that interested parties will have to fully respond to each one in as much detail as will be required for a project with such a fundamental impact on the tax system.
‘Revising the timetable’
Yvette Nunn, co-chair of ATT’s Technical Steering Group said that it is “imperative” that HMRC and the government handle the situation correctly, as they are at risk of huge embarrassment if it goes wrong.
Advisers have already revealed their fears over making tax digital to Accountancy Age, with one tax expert claiming that it may end up being another ‘failed IT project’.
Nunn argues that if HMRC issue the consultations in one go, it will have a “detrimental impact on the eventual design of the digital system and will impact on HMRC’s ability to have the whole digital system ready to use”.
“Whilst we can understand the decision by ministers to delay the issue of the consultations until after the EU referendum, we strongly believe that HMRC needs to recognise the impact of this delay by revising the timetable for implementation by at least one year,” continued Nunn.
“This would then allow the consultations to be released in phases, with staggered submission deadlines, to allow more consideration of all of the issues.”
The ATT had previously expressed concern that the legislation was overly complex and created unnecessary complications within the practical working of the new allowances
Introduced in 2013 to encourage R&D investment, the scheme allows UK businesses to pay only 10% corporation tax on profits derived from any UK or certain EU patents
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Yet, KPMG’s annual survey shows that the UK is still an attractive place to do business, despite falling in rankings in tax competitiveness and FDI appeal