ABAB 2016 Annual Report and Making Tax Digital

08 April 2016

The Administrative Burdens Advisory Board’s (ABAB) approach is to be an independent ‘critical friend’ to HMRC, and their latest annual report highlights their reservations about the announcement to mandate digital record keeping and introduce quarterly online reporting.

We have reported on this topic several times since it was first announced in the Spending Review and Autumn Statement 2015 that £1.3 million would be invested to transform HMRC into one of the most digitally advanced tax administrations in the world. This 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, via their digital tax account starting from 2018.

No real detail was provided in the original announcement and even the Treasury Committee voiced concerns in a letter to David Gauke on behalf of small businesses asking that assurance be given that they will not be compelled to pay tax sooner than now and will not be required to provide quarterly updates requiring more burdensome record keeping than now.

On this particular subject, ABAB’s report says:

“…we are very supportive of the move to digital but have reservations as to whether this will meet the needs for all small businesses, together with the level of support that will be available and the pace of change. Therefore compulsory digital record keeping and quarterly online updates is not an approach we can endorse. We are concerned that the proposals for quarterly updates will be more burdensome than they currently are with increased record keeping and compliance costs. This will have a big impact on the smallest of businesses. The requirement that as part of the reforms all businesses will have to keep records digitally is a significant concern, given the timescales to educate businesses and provide the necessary tools for them. We also have reservations around the current capability of software being able to deliver HMRC’s vision and the appetite amongst small businesses to utilise them, so we therefore urge HMRC to explore this further urgently.”

“…We are pleased to see that HMRC have formed the Assisted Digital Group to explore such issues and we will work closely with them to ensure that our concerns are addressed and that this understanding is obtained to inform delivery. As part of this engagement, we will be examining carefully the cost implications for businesses of conforming to MTD requirements. “

“…We urge HMRC to engage and consult with key business representatives and in particular the Office of Tax Simplification (OTS) to help identify, inform and support simplification.“

We will work closely with HMRC in 2016/17 and monitor the developments of the Making Tax Digital agenda. “


A consultation is due to be published this year but as yet no timescale has been provided.

ABAB’s 2016 Annual Report will be available on GOV.UK shortly but in the meantime you can read the full report through this link - ABAB 2016 Annual Report