The Office of Tax Simplification (OTS) has submitted its response to HMRC’s making tax digital (MTD) consultations (see here). The OTS makes the point that MTD is primarily about reporting, rather than simplification.
The Office of Tax Simplification (OTS) has submitted its response to HMRC’s making tax digital (MTD) consultations (see here). The OTS makes the point that MTD is primarily about reporting, rather than simplification. HMRC’s focus on mandation stems from the belief that it will help close the tax gap, which in turn will justify continuing investment in HMRC’s systems. The OTS thinks that greater openness from HMRC about this approach would help the public better understand the drive towards digital reporting.
Other comments made include:
There is little obvious benefit in MTD for business owners, who would merely be delivering much the same information in a different format.
In common with most commentators, the OTS thinks three to five years is a more realistic timescale for implementation than 18 months to two years.
The £10,000 threshold figure is somewhat arbitrary, whereas a link to the personal allowance might be more logical.
A better level at which to introduce the digital reporting requirement might be to bring in those businesses already registered for VAT.
Administrative savings could be made through a commitment to integrating iXBRL reporting with MTD for affected businesses, eventually working towards replacing iXBRL with MTD.
Penalties should not be introduced until the system has properly bedded in. The suggested 12 month grace period may not be sufficient.
HMRC has also published the text of a letter sent by the new tax assurance commissioner, Jim Harra, to the Financial Times, responding to growing pressure from the profession and others about the likely impact of MTD, insisting that digital tax ‘should not be a burden to businesses’. MTD does not mean having to file accounts five times a year, nor will it introduce in-year quarterly payments. Harra promises that ‘free software will be there for businesses with the most straightforward affairs, and we are looking at additional assistance with transitional costs’. See here.
The Office of Tax Simplification (OTS) has submitted its response to HMRC’s making tax digital (MTD) consultations (see here). The OTS makes the point that MTD is primarily about reporting, rather than simplification.
The Office of Tax Simplification (OTS) has submitted its response to HMRC’s making tax digital (MTD) consultations (see here). The OTS makes the point that MTD is primarily about reporting, rather than simplification. HMRC’s focus on mandation stems from the belief that it will help close the tax gap, which in turn will justify continuing investment in HMRC’s systems. The OTS thinks that greater openness from HMRC about this approach would help the public better understand the drive towards digital reporting.
Other comments made include:
There is little obvious benefit in MTD for business owners, who would merely be delivering much the same information in a different format.
In common with most commentators, the OTS thinks three to five years is a more realistic timescale for implementation than 18 months to two years.
The £10,000 threshold figure is somewhat arbitrary, whereas a link to the personal allowance might be more logical.
A better level at which to introduce the digital reporting requirement might be to bring in those businesses already registered for VAT.
Administrative savings could be made through a commitment to integrating iXBRL reporting with MTD for affected businesses, eventually working towards replacing iXBRL with MTD.
Penalties should not be introduced until the system has properly bedded in. The suggested 12 month grace period may not be sufficient.
HMRC has also published the text of a letter sent by the new tax assurance commissioner, Jim Harra, to the Financial Times, responding to growing pressure from the profession and others about the likely impact of MTD, insisting that digital tax ‘should not be a burden to businesses’. MTD does not mean having to file accounts five times a year, nor will it introduce in-year quarterly payments. Harra promises that ‘free software will be there for businesses with the most straightforward affairs, and we are looking at additional assistance with transitional costs’. See here.
