Many accountants and tax professionals have already raised concerns about the government’s proposed ‘Making Tax Digital’ project, and have criticised both the costs and suitability of the Treasury’s proposals to make small and medium-sized business submit quarterly. Although those concerns were somewhat alleviated by HMRC’s announcement that it was to delay the introduction of the digital tax system, disquiet over the proposals has not gone away.
Now the Association of Taxing Technicians (ATT) has weighed into the argument, calling on HM Revenue and Customs (HMRC) to delay the planned introduction of quarterly digital reporting, citing the ‘huge’ embarrassment that would occur if the project were to go wrong.
Making the tax process digital is just part of a substantial new overhaul that will allow HMRC to invest £1.3bn into the digital landscape. Under the proposals a new online tax system will eventually replace annual tax returns, meaning millions of individuals and businesses around the UK will be required to submit accountants on a quarterly basis.
After criticisms from professional bodies, HMRC announced that it would delay the planned consultation on digital tax accounts until after the EU referendum on 23rd June. However, the Association of Taxing Technicians is now calling on the Treasury to delay the whole project, and put it on the backburner for at least another year. This is despite other professionals raising concerns that a delay could truncate the consultation process: beta tests for the quarterly system are scheduled to begin in July, with tax advisers expected to manage their clients’ online presence from December.
The ATT is already predicting that the Government will end up issuing all five consultations in one go with simultaneous deadlines, so that it can meet its target of launching a public testing phase by April 2017. The problem with that, it argues, is that this will limit the time interested parties have to carefully digest and respond to each consultation.
Yvette Nunn, the co-chair for the ATT Technical Steering Group, has called on the Government to think carefully before making any rash changes, claiming it is ‘imperative’ that the Government handles the new situation correctly if it is to avoid risking another ‘failed IT project’:
“Whilst we can understand the decision by ministers to delay the issue of the consultations until after the EU referendum, we strongly believe that HMRC needs to recognise the impact of this delay by revising the timetable for implementation by at least one year.”
“This would then allow the consultations to be released in phases, with staggered submission deadlines, to allow more consideration of all of the issues,” she added.
If you would like more information on the new proposed digital taxation system and how it affect your business, then contact Steven Glicher accountants on 0161 485 8007 or email firstname.lastname@example.org.