Since the release of HMRC’s plans for digital tax reforms, many have agreed with the call for a delay
SINCE the release of HMRC’s plans for digital tax reforms, many have agreed with the call for a delay.
Yvette Nunn, past president and co-chair of ATT technical steering group said, “Digital tax is forced upon small businesses; it is digital in the right way but in context it is compulsory not voluntary. They don’t have the funds for bookkeeping for quarterly returns.”
Andrew Tyrie, chairman of the Treasury Committee, had written to the chancellor Phillip Hammond to urge caution since the release of HMRC ‘s digital tax consultation documents over the implementation. “Given the length of the consultation papers and the complexity of the issues, many responses will not be submitted much before the closing date of 7 November.”
Yvette Nunn continued, “I disagreed with the first point in Andrew Tyrie’s letter, that “it was a relief that many businesses that already transact with HMRC for VAT and corporation tax” as for annual VAT allowance, the profit should be the same as the VAT threshold. The threshold has a negative impact for embryonic small businesses that are the ‘backbone of society’, as Theresa May said.”
At the HMRC Annual Conference earlier this month it was announced that the implementation of the plans to make tax digital will be deferred so that large businesses have enough time to adjust.
Jane Ellison, MP, said “You told us that the smallest businesses might struggle to keep their records online – so we exempted over a million more landlords and small businesses from the proposed changes.”
Tyrie warned, “HMRC has already said its digital tax plans will be delayed until 2019 so that large businesses have enough time to adjust. But further postponements may be required. “Implemented carefully, [Making Tax Digital] could do some good. But it could also do much harm.”
Nunn concluded, “There is a hidden cost as small businesses lose their time, lose opportunities as well as the cost for an accountant to do their quarterly returns. For any accountant, even for a wealthy client as in many cases with VAT, a simple accounting error can lead to penalties and larger problems.”
“Making Tax Digital should be delayed so HMRC can consider the impact on small businesses and take on the suggestions of others before firmly deciding on the technicalities of these plans. HMRC shouldn’t be forcing software to make smaller businesses get involved with HMRC.”