Plans to radically overhaul the ways in which businesses around the UK report their financial dealings to HMRC must not be rushed in without more careful consideration of the potential consequences.
That’s according to the Association of Taxation Technicians (ATT) which is keen to see the government consult further before moving ahead with its current schedule for introducing HMRC’s Making Tax Digital (MTD) programme.
The programme is based largely around having most businesses around the UK keep their financial records electronically and submit relevant information on a quarterly basis.
As it stands, HMRC is hoping to phase in the digital overhaul from April 2018 onwards but the ATT is concerned that lots of businesses simply won’t be ready to switch to digital platforms within the timeframe that’s currently in place.
“It is in no-one’s interest to rush the introduction of MTD and end up with a range of problems for both businesses and HMRC when proper consideration of suggestions and further detailed consultation could assist the achievement of making HMRC into one of the most digitally-advanced tax administrations in the world by 2020,” said ATT president Ralph Pettengell in a statement.
“The association and many other professional bodies have been cautioning against introducing MTD without sufficient consideration of its full implications for businesses, software developers, the agents who help businesses to comply with their tax reporting obligations and HMRC itself,” he said.
The ATT’s comments come after the MP Andrew Tyrie, who is chairman of the Treasury select committee in the House of Commons, suggested that HMRC might need to rethink its approach and the pace at which its MTD plans should be implemented.
“HMRC’s proposals are major changes. There remains considerable cause for concern with the proposals. Better to get it right than to stick to a rigid timetable,” Tyrie wrote recently in a letter to the chancellor Philip Hammond.
Both the Chartered Institute of Taxation and the Federation of Small Businesses have also expressed concerns that requiring all companies throughout the UK to file digital tax returns could prove problematic.
The Treasury released consultation documents in relation to its MTD strategy at the end of August and has said it intends to “continue to work with businesses and professional bodies to make sure we get a system that works and that is fit for the 21st century”.