The Commons treasury committee published its report on the government’s ‘making tax digital’ proposals on 14 January (see http://bit.ly/2iCKcE9).
The Commons treasury committee published its report on the government’s ‘making tax digital’ proposals on 14 January (see http://bit.ly/2iCKcE9). The report affirms the committee’s support for the idea of digitising the reporting of tax, but takes the view that mandating digital record keeping and quarterly reporting ‘has not yet had its overall benefits proven’. The report makes a number of recommendations, including:
The committee chairman Andrew Tyrie commented: ‘Carefully introduced, the digitisation of tax records and reporting (MTD) can be an opportunity greatly to improve the administration of the tax system for the long term. Without sufficient care, MTD could be a disaster.’ For that reason, Tyrie concluded: ‘The government should change its current approach.’
The CIOT has welcomed the treasury committee’s call for a delay in implementation. CIOT president Bill Dodwell commented: ‘There are hundreds of different providers of accounting software, in many cases adapted for specific industries and trades. Right now, we have no idea how many of these will be ready and tested in time.’ Concerning the threshold for making tax digital and quarterly reporting, Dodwell said: ‘Consensus is growing that the VAT threshold of £83,000 would be a more sensible cut off point.’ On the need for more pilots, he agreed these should ‘address behavioural issues rather than simply digital functioning’ and ‘will need to build up gradually, bringing in a wider range of users’.
The CIOT also noted that making tax digital is an example of a consultation started at too late a stage: ‘Two major decisions had already been taken before consultation started, to require all businesses to maintain accounts online and to make quarterly online returns to HMRC. Those pre-emptive decisions were felt to have big implications for many small businesses, but were made without consultation and without them being able to challenge the assessment of compliance costs’ (see the Better budgets).
The ATT’s technical steering group chair Yvette Nunn said the report ‘provides the government and HMRC with a timely opportunity to reflect on how the existing proposals might usefully be amended in order to achieve the win-win outcome which was originally envisaged through the combination of simplification of reporting taxable profits and improved business records’.
The government is expected to issue its formal consultation response before the end of January.
The Commons treasury committee published its report on the government’s ‘making tax digital’ proposals on 14 January (see http://bit.ly/2iCKcE9).
The Commons treasury committee published its report on the government’s ‘making tax digital’ proposals on 14 January (see http://bit.ly/2iCKcE9). The report affirms the committee’s support for the idea of digitising the reporting of tax, but takes the view that mandating digital record keeping and quarterly reporting ‘has not yet had its overall benefits proven’. The report makes a number of recommendations, including:
The committee chairman Andrew Tyrie commented: ‘Carefully introduced, the digitisation of tax records and reporting (MTD) can be an opportunity greatly to improve the administration of the tax system for the long term. Without sufficient care, MTD could be a disaster.’ For that reason, Tyrie concluded: ‘The government should change its current approach.’
The CIOT has welcomed the treasury committee’s call for a delay in implementation. CIOT president Bill Dodwell commented: ‘There are hundreds of different providers of accounting software, in many cases adapted for specific industries and trades. Right now, we have no idea how many of these will be ready and tested in time.’ Concerning the threshold for making tax digital and quarterly reporting, Dodwell said: ‘Consensus is growing that the VAT threshold of £83,000 would be a more sensible cut off point.’ On the need for more pilots, he agreed these should ‘address behavioural issues rather than simply digital functioning’ and ‘will need to build up gradually, bringing in a wider range of users’.
The CIOT also noted that making tax digital is an example of a consultation started at too late a stage: ‘Two major decisions had already been taken before consultation started, to require all businesses to maintain accounts online and to make quarterly online returns to HMRC. Those pre-emptive decisions were felt to have big implications for many small businesses, but were made without consultation and without them being able to challenge the assessment of compliance costs’ (see the Better budgets).
The ATT’s technical steering group chair Yvette Nunn said the report ‘provides the government and HMRC with a timely opportunity to reflect on how the existing proposals might usefully be amended in order to achieve the win-win outcome which was originally envisaged through the combination of simplification of reporting taxable profits and improved business records’.
The government is expected to issue its formal consultation response before the end of January.