The drive towards a fully digital tax regime is an admirable one, but mandation is simply wrong, according to one of the UK's most senior tax technology practitioners - Paul Aplin
WHAT STRUCK ME about yesterday morning’s Treasury Select Committee session on Making Tax Digital (MTD) was the degree to which the witnesses agreed.
Rebecca Benneyworth, Frank Haskew, Chas Roy-Chowdhury and Mike Cherry all supported steps to harness digital to improve tax administration. But they also urged caution over the timetable, spoke out against mandation (suggesting an exemption level no lower than the VAT threshold) and raised doubts about the purported additional tax yield and claims that MTD would reduce costs for businesses. They highlighted the difference between transitional and ongoing costs.
These were not pleas to scrap MTD – but to get it right.
Over the past twenty years my firm has helped HMRC beta-test most new digital services for agents. We have done it because we see a clear business case both for us and for our clients. I sat on HMRC’s Carter Project Board and now sit on the Digital Advisory Group.
You would expect me to be all for MTD. I am.
I am very enthusiastic about the potential it holds, but I share the concerns articulated so clearly by this morning’s TSC witnesses.
Small businesses can do without yet another administrative burden. They have enough to contend with already.
Mandating MTD for such businesses is simply the wrong approach.
It is time to accept that fact, then agree a sensible level below which participation is voluntary and finally harness the genuine goodwill that exists across the professional and trade representative bodies to work together with HMRC and the software industry to build something that delivers clear benefits for all; a system small businesses will choose to adopt.
Paul Aplin OBE is a partner at AC Mole & Sons, and ICAEW vice-president. He sits on HMRC’s Admin Burdens Advisory Board & Digital Advisory Group. Aplin won the Outstanding Contribution Award at the 2013 British Accountancy Awards