We are concerned about the impact of HMRC’s latest initiative. As you may be aware, HMRC is planning for the majority of businesses in the UK to pay their tax digitally from April 2018, 14 months from now, and has published draft legislation and more detail into what this will mean and how it will affect small businesses.
While we embrace digitalisation and see that there are benefits associated with increased reporting and use of software, we are concerned that HMRC has not considered the impact on small businesses and has set an unrealistic timeframe for the process.
The draft legislation drawn up by HMRC seems to make an assumption that small business owners are tax experts and are comfortable with reporting their tax directly. In this system, a small mistake, made without professional advice, could cost your business a lot of money.
The main problem that small businesses (which includes many buy-to-let landlords) and their advisers face is the lack of clarity over the detail. Partner Alan Nesbitt said “Until we have the full response to the issues raised during the consultation period we are not able to provide detailed guidance to business owners and landlords. We do however envisage that our Cloud based offering will be a major part of the solution. While many people may find it ironic that these changes fall partly under the auspices of the Office of Tax Simplification it is not something that is likely to go away.”
We are a member of the UK200Group, the UK’s largest membership association of chartered accountancy and law firms, which has been in dialogue with HMRC and the Office of Tax Simplification throughout the consultation process. The UK200Group has set up a Digitalisation Taskforce, through which we are representing the needs and concerns of the SME community.
Through the UK200Group, we are working to ensure that HMRC is aware of the concerns of the small business community. We will be working alongside small business owners throughout the transition and if you’d like to speak to us about Making Tax Digital, please call Paul Tofton on 01472 350601 or email email@example.com.