The UK’s tax system is being made digital and as could be predicted this massive program of digitisation is causing the requisite amount of concern to be expected when the government embarks on such wide reading IT based initiative.Fears expressed more than a year ago that that Her Majesty’s Revenue & Customs is rushing Making Tax Digital (MTD) are finally being echoed in Whitehall.
Andrew Tyrie, chair of the Treasury Select Committee (and considered by many the most powerful backbencher) has told Chancellor Philip Hammond in a newly published letter that with regards to MTD it is “better to get it right than to stick to a rigid timetable”.This letter comes just a few days after Mr Hammond announced the date for his first Autumn Statement and expresses concerns first voiced by PwC in March 2015.
At the time the accountancy giant cautioned that the government’s timetable was highly amnitious and that to implement it in 12 months would be very tough to achieve.
Those concerns were reinforced by the tax body the ATT in May this year after the HMRC published six MTD consultations but afforded the equivalent of just one month per consultation to consider people’s responses.
What is to be done then?The Government says it may offer a year’s extension to certain groups, however Mr Tyrie points out that there remain considerable concerns with the proposals.
Mr Tyrie takes issue with how many businesses will actually benefit from the £10,000 exception and how those slightly over the exemption will fare from their burdens increasing and indeed how long the software can be assured as being free of charge.
The Treasury Committee Chair also seems to be troubled by the fact that MTD shall require taxpayers to update their accounts “at least quarterly”, believing such a practice to be rather intrusive and even draconian.
“Much depends on the consultation responses.They may require a delay.Getting this right matters a lot, particularly to the small businesses who could be hit hard by the mistake”.
From all that is being said it looks like that in order to reap the £945m in extra contributions the Exchequer hopes to get by 2020-21 the Government should perhaps forgo expediency and consider more fully this massive overhaul in the tax system in hope of avoiding a potentially disastrous public mess up.