Business group criticises new tax digitisation timetable
The Federation of Small Businesses (FSB) has criticised the revisions made by HM Revenue & Customs (HMRC) to the timetable for the successful implementation of Making Tax Digital (MTD).
The business group called for the introduction of MTD to begin in 2020 rather than in 2018 as planned, and for smaller businesses to be excluded from the scheme altogether. This is despite concessions made by the government following consultation, including providing free software to businesses with the 'most straightforward' tax arrangements and continuing to allow businesses to use spreadsheets for their record-keeping.
Mike Cherry, National Chairman of the FSB, said: ‘The timetable laid out by ministers in Autumn Statement 2015 is now a total fantasy. It is unachievable given the latest delays. The programme cannot begin before 2020 without causing considerable disruption to economic growth, investment and employment.
‘Small businesses were expecting clarity around how to meet their tax obligations from 2018, and they still do not know what they will face.
‘As small business owners plan their approach to Brexit, rushing in mandatory quarterly tax reporting is a headache they just don’t need.
‘We will be raising this with ministers at every level, bringing together a broad alliance across the business community, accountancy and tax bodies.’
The Chartered Institute of Taxation (CIOT) also called for a delay in implementation and for the mandation threshold for MTD to be raised from the proposed £10,000 turnover to £83,000.
CIOT President, Bill Dodwell, said: ‘Getting this done quickly is less important than getting it done right.
‘Moving the UK to a digital tax system will undoubtedly bring benefits but the scale of the change is so significant that it would benefit from being carefully phased in.
‘A phased introduction would give small and medium-size businesses sufficient time to prepare for the significant administrative, technological and financial implications associated with the shift to digital accounting.’