Under HMRC’s proposals, most businesses will be required to keep their records electronically (with electronic copies of all business transactions) and submit quarterly updates to HMRC. The changes are scheduled to be introduced in steps from April 2018.
In his letter to the Chancellor, the Chairman of the Treasury Committee highlights matters which need to be addressed.
These include the need to identify what free software will be available to small businesses and for how long it will remain free and how the quarterly MTD updates will align with Universal Credit monthly updates.
The letter also focuses on the impact of the £10,000 turnover exemption and the particular burden on businesses with a turnover just over the exemption. Overall, the message is that HMRC will need time to carefully consider the detailed responses that it will receive to the six consultations that it issued on August 15.
The letter notes that as the closing date for the responses is November 7 2016, the intended inclusion of legislation in Finance Bill 2017 would mean that there would be little time for further development of the proposals between the end of the consultation and the normal date for the publication of draft Finance Bill clauses around the end of November. (In a written statement the Chancellor has since extended this deadline)
President of the Association of Taxation Technicians (ATT), Ralph Pettengell, said: "The Association and many other professional bodies have been cautioning against introducing MTD without sufficient consideration of its full implications for businesses, software developers, the agents who help businesses to comply with their tax reporting obligations and HMRC itself.
“We fully understand that the EU referendum campaign delayed the publication of the MTD consultations – which had been promised for Spring 2016 but were eventually published in August – but that does not justify abbreviating the period for serious reflection by HMRC on the many detailed comments that will be included in the responses to the consultation.
“It is in no-one’s interest to rush the introduction of MTD and end up with a range of problems for both businesses and HMRC when proper consideration of suggestions and further detailed consultation could assist the achievement of making HMRC into one of the most digitally-advanced tax administrations in the world by 2020. For that reason, we welcome the very measured concluding comment in Andrew Tyrie’s letter to the Chancellor: ‘Better to get it right than to stick to a rigid timetable’.”
The letter of 15 September from Andrew Tyree to the Chancellor can be found at here.
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Susie Hughes © Shout99 2016