Digital tax plans could spell disaster
A report by MPs warns that plans to digitise the tax returns system are being rushed through and could end in "disaster". The Treasury Select Committee believes the government"s ‘Making Tax Digital’ policy, due to come into force in April 2018, could put companies out of business or encourage tax avoidance because of the additional costs and administrative burdens placed on the smallest businesses. Committee chairman Andrew Tyrie said that the current timetable "looks unachievable" and called for a delay until at least 2019 to allow concerns to be addressed. At present, businesses with a turnover of under £10,000 will be exempt, and MPs also recommend increasing this threshold to £83,000. The report also cast doubt over an official forecast which suggested that MTD would bring in an additional £625m for the public purse. MPs believe that in reality, the plans could result in lost revenue for HMRC because of the anger provoked among taxpayers. The FSB claims that the changes will cost the average small company an extra £2,770 a year, in addition to the £3,600 that it already spends on tax advice. In response to the report, the ICAEW called on the government to delay the project and make it voluntary, at least for the smallest businesses, while the CIOT and ATT have also backed the report’s conclusions. Separately, the FT profiles one of HMRC’s trial “future workplaces” - a test bed for the vast new regional centres where it plans to consolidate its operations.
Source: The Times (14/01/2017)