Worried by HMRC's new quarterly tax return plans?
If you have heard about the HMRC's new quarterly tax return plans and are concerned about what it means to you, Aben Bookkeeping can help
HMRC is determined to transform the UK tax system into one of the world's most sophisticated digital administrations by 2018. It's a laudable aim but many feel it'll come at a cost, particularly for the nation's smallest businesses.
As a result HMRC's Making Tax Digital initiative is still causing ructions, with growing criticism of their proposed quarterly tax filing system. Things have become so overheated that business groups are claiming the plans will dramatically increase the small business administrative burden. So what's the story? We thought it'd be useful to take a look at the argument in detail.
What ABAB says
The Administrative Burdens Advisory Board advises HMRC about how to support the nation's smallest businesses. They're 'disappointed' by the announcement that the revenue plans to go ahead with their much-criticised new digital system.
As they said in their annual report, “Whilst we recognise and are supportive of the need to move to digital and the potential this brings, we are disappointed with the announcement to mandate digital record keeping and quarterly online reporting for even the smallest businesses as part of Making Tax Digital for Business."
They also claimed small companies, which account for a massive 99% of all private sector businesses, will struggle to comply, simply because there's so much extra legwork involved. The Federation of Small Businesses agrees, worried that the new system will force small businesses to invest in complex and expensive new accounting software. In their opinion the new system will merely add to the cost of doing business in Britain.
More objections to digitising the tax system
These are just the latest in a string of objections over HMRC's digital plans. In January this year both HMRC and the Treasury strongly denied their plans would force SMEs to provide quarterly tax returns. The treasury's Financial Secretary David Gauke patted things down, saying the plans wouldn't lead to a mandatory four tax returns per year. Last month Andrew Tyrie, the chairman of the Treasury Committee, said he found it hard to see how digital tax accounts will reduce the administrative cost to businesses by £400m.
HMRC disagrees, saying they're creating a more effective, efficient and easier tax system. And they're planning to work closely with stakeholders to address ongoing concerns.
The UK is already digital-savvy
Interestingly, we're already an impressively digital-savvy nation. All this is happening at a time when 99% of British businesses currently file their corporation tax online, and 98% of all UK VAT returns are filed on the web.
Whatever your opinion, it's more than likely the changes will go ahead. If it works, Britain will be the proud owners of the best-digitised tax system on the planet. If you're worried, you can always leave things to us. We will help your business no matter how digitally-savvy you are... or aren't. We'll even help identify the best systems, tools and software for your particular circumstances.
HMRC insists that the new system will simply integrate existing systems to create a simpler, more streamlined system which will cut the administrative burden for small businesses. We're here to ensure you achieve exactly that.
If you would like to find out more about the new quarterly tax returns plans please contact karen@abenbookkeeping.co.uk or call her on 01273 661913