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HMRC Criticised Over Quarterly Digital Tax Filing Plan

Written by: Keith Tully

Published: 7th April 2016

Having small business owners provide tax-related information every quarter would add notably to their administrative burdens and increase the cost of doing business in the UK, it has been claimed.

Chancellor George Osborne made a series of announcements in his 2015 Autumn Statement outlining the government’s plans to create a new and more digitally-dependant tax filling system for self-employed people across Britain.

But the Administrative Burdens Advisory Board (ABAB), whose work includes scrutinising the potential impact of any changes to HM Revenue & Customs (HMRC) operations for small businesses, has now raised concerns about the impact the changes are likely to have.

“Compulsory digital record-keeping and quarterly online updates is not an approach we can endorse,” the ABAB said in its annual report.

“We are concerned that the proposals for quarterly updates will be more burdensome than they currently are with increased record-keeping and compliance costs. This will have a big impact on the smallest of businesses.”

Meanwhile, the Federation of Small Businesses (FSB) has made clear its concerns about seeing small UK companies obliged to provide tax-related information every three months.

“Forcing small firms to pay for expensive digital accounting software so they must submit extra tax returns is not going to help anyone. It will simply add to the cost of doing business in the UK,” said the FSB’s national chairman Mike Cherry.

“When every independent body and expert is lining up to tell you to stop, slow down and think again, it might be time to take a breather and listen to their concerns,” he said.

The ABAB has also called for the government and HMRC to investigate the extent to which small business operators around the country will or will not be in a position to meet their obligations with regard to tax returns if they are obliged to make submissions via digital platforms.

“The small businesses that are not tech savvy might struggle – I don’t want them to struggle four times over,” Teresa Graham, chair of the ABAB, told the Guardian.

For their part, HMRC spokespersons have emphasised that they do not intend to ask for full tax returns every quarter but rather for tax-related information to be submitted via its new digital platforms every quarter.

Their claim has been that the new system will eventually streamline and simplify HMRC’s dealings with small businesses throughout the UK.

Keith Tully

Keith Tully

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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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