18 Apr Quarterly Tax Returns Criticised
April 15, 2016
Quarterly tax return plan criticised by watchdog
The Administrative Burdens Advisory Board, the independent body that oversees HMRC, has refused to support the Government’s plans to force small businesses to submit quarterly digital tax returns.
Under its Making Tax Digital strategy, HMRC has proposed that taxpayers using self-assessment will have to file current financial information online at least every three months by 2020.
However, the Administrative Burdens Advisory Board (ABAB) has said: “Compulsory digital record keeping and quarterly online updates is not an approach we can endorse.”
The ABAB has used its annual report to flag up “significant concerns” that “the proposals for quarterly updates will be more burdensome than they currently are with increased record keeping and compliance costs”.
This criticism from the ABAB adds to growing concern about HMRC’s plans for digital tax returns. The ABAB report highlights “reservations around the current capability of software being able to deliver HMRC’s vision and the appetite amongst small businesses to utilise them”.
The ABAB has also been critical of the decision to announce the policy without consultation or warning. It said: “We were surprised and disappointed when this was announced at Autumn Statement, particularly that given our close engagement and relationship with HMRC we were not informed of the intentions earlier.”
Mike Cherry, FSB national chairman, said: “The writing is on the wall as more and more small businesses are making clear their concerns about this poorly thought-out plan. Forcing small firms to pay for expensive digital accounting software so they must submit extra tax returns is not going to help anyone. It will simply add to the cost of doing business in the UK.
“These proposals will also substantially increase administrative burdens – particularly for the smallest businesses. When every independent body and expert is lining up to tell you to stop, slowdown and think again, it might be time to … listen to their concerns.”
Source: The Tax Donut