Making Tax Digital: Myth Buster
11 February 2016
A Myth Buster has been published by HMRC which may help to dispel some of the misconceptions regarding the proposals for employers to submit quarterly returns.
The Spending Review and Autumn Statement 2015 announced the commitment to invest £1.3 million to transform HMRC into one of the most digitally advanced tax administrations in the world which will see most businesses, self-employed people and landlords being required to keep track of their tax affairs digitally and update HMRC, at least quarterly starting from 2018, via their digital tax account.
At the beginning of the year we reported that more than 100,000 small firms had signed a petition demanding HMRC to rethink their proposal for quarterly returns.
The Treasury Committee then wrote to David Gauke, Financial Secretary to voice these concerns. The letter raised that very little detail has been given about the proposal and asked that assurance be given that:
- businesses will not be compelled to pay tax sooner than now
- businesses will not be required to provide quarterly updates requiring more burdensome record keeping than now
- adequate arrangements will be made for those businesses who do not use computers; and
- all the details including the associated penalty regime will be subject to full consultation prior to any decisions.
HMRC has published a Myth Buster alongside their other Making Tax Digital publications which would appear to address some of the issues. However further information on the transformation plans of the tax system are to be published in 2016 with consultation on the full details.