Revenue under fire over e-filing mandate
Proposals set out in the Finance Bill for a proposed £3,000 fine levied on employers that do not file their tax returns electronically by prescribed dates, have been sharply criticised by leading tax experts.
While the Revenue said the £3,000 fine, was only ‘speculation’ and that ‘no final decision has yet been made on fines’, John Whiting, president of the Chartered Institute of Taxation and a PwC tax partner told Accountancy Age: ‘We see a problem with the whole framework of mandatory e-filing with the potential for fines.’
He went on to slam the Revenue for ‘imposing something that is the way forward for business’ and said the Revenue ‘should provide incentives to encourage e-filing rather than beat business over the head with a stick’.
Chas Roy-Chowdhury, head of tax at the ACCA, dismissed the Revenue’s claim that no decision had been taken on the issue of fines. He said: ‘I don’t know why they are calling it speculation, because it is in the clause [of the Finance Bill]’.
He added that the fine was ‘driven by regulation, with no opportunity for parliamentary debate,’ which meant, in effect that the ‘Revenue could implement it when ever they want to’.
And, Chowdhury said, the legislation is so ‘wide-ranging’ in the way it is drafted that it could draw in any kind of tax-filing, including self-assessment.
‘What we want is tightly drawn, specific legislation so we know where we stand.’
As set out in the provisions of the Finance Bill, Clause 131/132, employers with 250 or more employees must file electronically by 2004/05, those with 50 or more must e-file by 2005/06. It will then become a universal requirement for all individuals to file online by 2010 for the 2009/2010 tax year.