Advisers raise concerns over HMRC’s digital tax timetable
The timetable for implementing HMRC’s ambitious digital tax strategy is “worryingly short” and should be delayed by at least one year, advisers have warned
The timetable for implementing HMRC’s ambitious digital tax strategy is “worryingly short” and should be delayed by at least one year, advisers have warned
THE timetable for implementing HMRC’s ambitious digital tax strategy is “worryingly short” and should be delayed by at least one year, advisers have warned.
HMRC yesterday outlined the details of its Making Tax Digital strategy in a series of consultation documents and revealed that all unincorporated businesses and landlords with income or turnover below £10,000 will be exempt from needing to update HMRC quarterly or keep their records digitally.
The Association of Taxation Technicians (ATT) said the exemption will “vastly simplify matters” for start-ups but questioned the size of the threshold.
“Although we support the exemption, the figure of £10,000 strikes us as a very small threshold and we suggest it should at least be aligned with the personal allowance each year, otherwise it is overcomplicating tax for the very smallest businesses,” said Yvette Nunn, co-chair of ATT’s technical steering group.
According to Frank Haskew, head of the ICAEW tax faculty, said the proposed exemption for businesses with a turnover of less than £10,000 will be of little help to the vast majority of small businesses; most with a turnover below that figure are unlikely to be paying tax anyway.
“The exemption should be set at a level of turnover where most businesses are likely to be paying tax,” he said.
The late issue of the consultations and the 7 November deadline for responses has left a very short timeframe in which HMRC can carry the analytic phase and to finalise details of the project,
“Although the original timetable for introducing these changes has been deferred by a year the timescale for implementation remains worryingly short. Taken together these consultation documents will be a major change to the UK’s tax system,” said Haskew.
“We want to work with HMRC to build a digital tax system that small businesses will want to use and see value in, rather than being a system they are forced to use and which adds to their costs.”