Tax professionals issue
warning about move to quarterly Tax reporting
THE Low Incomes Tax Reform Group (LITRG)
cautions that compelling small businesses to submit information digitally
will result in previously compliant individuals, who find themselves unable
to satisfy their new obligations, becoming involuntarily non-compliant.
This follows the news that a Parliamentary Petition calling on the
Government to scrap plans to make small businesses and self employed
individuals report their Tax data quarterly, through their digital Tax accounts, has gathered more than 106,000 signatures in its
1st 3 weeks.
The number means that Parliament must now debate it.
LITRG is worried that the smallest businesses run by non-computer literate
owners or those who do not keep sophisticated Tax records may face sanctions
from HMRC because they will be unable to meet the new quarterly obligations.
Those most at risk of failing to meet the requirements include older and
disabled people and those living in remote areas.
Anthony Thomas, LITRG Chairman, said:-
"The Government's approach is
simplistic and betrays a worrying ignorance of how most businesses actually
Companies which do not already use record keeping software, or are using
software that will be incompatible with HMRC's digital accounts, will have
to spend a great deal of time transposing their business records onto new
systems to satisfy HMRC; time spent in an activity of little or no value to
them or their customers.
It is very harsh that the smallest businesses with the lowest profit margins
may be required to undertake significant investment and training in computer
technology simply in order to comply with HMRC's reporting requirements, and
for no other purpose.
Instead of mandating, HMRC should develop software that is so much more
convenient and easier to operate than any alternative. Then people will
naturally choose to use it, as is already the case with online
self assessment filing. That approach we would fully support.
Alternative methods of reporting must be realistic; requiring a pensioner
business owner to use a smartphone, if they cannot use a computer would not
be a sensible alternative. It is surely right that people should have the
choice about methods they use to submit their Tax information? Forcing
people to do what they cannot do will only create hard cases, and hard cases
make bad law."
LITRG warns that it is 'inevitable' that compulsory quarterly
reporting will lead to compulsory quarterly Tax payments, which will cause
yet more problems for the smallest businesses.
Anthony Thomas said:- "We are keen to hear further details when the
Government issues its promised consultation. It is essential that the
circumstances and capability of the smallest enterprises are taken into
account when devising the new policy, and that nobody is forced to do
something they cannot."
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