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MPs told tax digitalisation needs rethink

Tax returns pending digitalisation will result in substantial costs for tax compliance on small firms with little to no benefit in the medium term, Commons Treasury Committee MPs have been told by small firm experts.

Andrew Tyrie, committee chairman, said that HMRC’s Making Tax Digital (MTD) project has potential adverse consequences for drovesof small firms.

Chas Roy-Chowdhury, head of taxation for ACCA, said that although businesses that use tax agents have become aware of the project, small firms are likely less well advised as to what is coming down the pipeline. He expressed doubt that businesses would benefit from MTD due to tax agents being called upon five times per year, as opposed to just one.

Federation of Small Businesses national chair Mike Cherry said that 2025 would be a good target date, as it would allow businesses to feel confident that the project works following sufficient testing.

Cherry added:

“Many small businesses are certainly not aware that this is coming. It’s creating a perfect storm. We absolutely agree with the [MTD] pathway, but over a much, much longer period of time that businesses can get to grips with.”

Of course, businesses would not be keen on using a project that does not provide them with any real benefits. They may also struggle with using it, especially those businesses that are not computer savvy. This only illustrates the importance of employing the services of an accountant in the Wirral to advise and ensure that businesses can keep up with, and implement, any changes set forward by HMRC.

Posted by Mark
November 9, 2016

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