The Association of Taxation Technicians (ATT) has released a statement suggesting that, while the delay to Making Tax Digital (MTD) is welcome for small business owners, the Chancellor of the Exchequer has so far failed to allay fears about its overall implementation.
During Wednesday’s Spring Budget 2017 speech, Philip Hammond confirmed that the Government will extend the deadline to use MTD by an extra year for those below the VAT threshold.
However, Yvette Nunn, co-chair, ATT’s technical steering group, believes the delay was only a “small gesture” and “not enough to prevent the requirements under Making Tax Digital, such as digital record keeping and quarterly updates, from burdening entrepreneurs”.
“The delay will allow a little more time for those businesses to find a digital solution, but it will still be overly burdensome for small businesses,” added Nunn.
The ATT wanted HM Revenue & Customs (HMRC) to postpone the introduction of quarterly digital reporting by at least a year, last May, in order to give suitable time for a full and proper consultation and allow for the development of suitable digital reporting solutions; giving business owners adequate time to select the best reporting solution for their individual requirements.
Although the ATT welcomes this week’s delay, Ms Nunn admitted it does not detract from the issue that the smallest businesses are still affected and will find the cost of compliance disproportionately expensive.
“We do not doubt that digital interfacing between taxpayers and HMRC is the way to go, but we have always said that those who are within the cross-hairs of this process are sometimes those who are least able to deal with the changes, such as very small businesses,” added Nunn.
“Postponing the digital mandation by one year for small businesses, will provide a useful period of reflection and consolidation for HMRC and helpful breathing space for those who will have to deal with these new requirements.
“We are concerned that HMRC has yet to respond to requests to publish the detail of its costings of what the financial cost for small businesses will be; we worry that the cost and benefits of the system are not as HMRC claims.”
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