In response to consultations with the business community throughout 2016, HMRC has issued further information about its plans for Making Tax Digital.
It comes just weeks after a report by the Treasury Committee recommended that the timeframe for digitalisation be pushed back and the threshold for digital reporting be raised in line with that of VAT reporting.
Responding to the news, Richard McNeilly, Managing Partner at Dains Accountants and Chair of the UK200Group Digitalisation Taskforce, said: “Whilst the direction of travel to a digitised environment is welcome, it is important to consider the impact to SMEs. HMRC will no doubt point out that processes will be simplified and therefore that the transition will be timely and ordered. But at what cost to the SME? The more the information is ‘dumbed down’, the more likely it is that SMEs will miss out on available tax reliefs.
“Of course, SMEs can choose to use accounting software but it has yet to developed to deal with Making Tax Digital and so my question remains: why the hurry? Cynically, you could argue that ‘the hurry’ will lead to a big increase in the overall tax take, but more realistically the insistence in working to a 2018 start date will cause confusion, anxiety and pain for SMEs, already grappling with a myriad of business issues.
“A leading economy must be productive, so let’s help SMEs rather than hindering them. I encourage HMRC to take a look again at the overwhelming feedback from the SME community and defer the rollout of Making Tax Digital.”
The HMRC response can be found here.
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