20 May 2016 09:15
Is digital tax reporting being rushed in?
The Association of Taxation Technicians (ATT) is calling on HMRC to postpone the introduction of quarterly digital reporting by at least a year.
The appeal by the ATT comes after HMRC announced that the launch of the consultation on Making tax digital is to be postponed until after the EU referendum. The ATT has already raised concerns that the existing timetable is too ambitious.
The first of five consultations was initially expected in early April. According to the ATT, this delay is likely to mean that all five consultations will be issued in one go so that HMRC can stick to its plan of launching a public testing phase by April 2017.
It says this will restrict the time that interested parties will have to respond given that the project is set to have such a fundamental impact on the tax system. The five consultation areas are: quarterly reporting, administration, software, penalties and payments.
"The Making Tax Digital Project represents the biggest change to the way taxpayers will engage with HMRC since the introduction of PAYE in 1945 and, according to a recently conducted survey, will require around 82% of self-employed individuals to change the way they currently keep business records,"
said Yvette Nunn, Co-chair of ATT's technical steering group.
According to Nunn, £1.3 billion of taxpayers' money has been approved for spending on this project.
"The risk of embarrassment to both HMRC and the Government if this goes wrong is huge," she said.
Nunn added: "Whilst we can understand the decision by ministers to delay the issue of the consultations until after the EU referendum, we strongly believe that HMRC needs to recognise the impact of this delay by revising the timetable for implementation by at least one year. This would then allow the consultations to be released in phases, with staggered submission deadlines, to allow more consideration of all of the issues.
"Rushing ahead with this project without allowing adequate time for the consultation and testing phases could put at risk the many potential benefits for taxpayers and HMRC which greater digital working can bring," said Nunn.
"That would be a tremendous mistake and in a worst case scenario could result in a system that was not fit for purpose."