Accountancy association warns HMRC over tax plans

Friday 2 December 2016

An accountancy group has warned HMRC over potential problems with its Making Tax Digital plans.

UK200Group is concerned that the claims department does not understand the demand it will place on companies, which will have to deal with a significant amount of information. 

It has argued that the Making Tax Digital programme requires a longer timescale and could end up becoming a burden for companies that are forced to adapt to the software. 

UK200Group participated in a consultation of the plans and is concerned about new day-to-day reporting requirements for companies. It emphasised that digitising tax processes will be beneficial, but changes needed to be made in some areas.

The association believes that the HMRC’s timescale for implementation is too short for the issues to be properly resolved. As well as this, it is worried that self-assessment and the relationship between HMRC and taxpayers will be altered as part of the plans. 

At a time when there is a lot of pressure on British professionals to remain as productive as possible, it is crucial that any new processes can be adopted efficiently. 

Can accountants engage with the new processes? 

UK200Group is worried that HMRC is falsely regarding tax as the main purpose for business accounts. It is also questioning whether taxpayers are willing to properly engage with the new processes. 

Andrew Jackson, head of tax at UK200Group, said: “I think what they’ve failed to identify is that business people aren’t doing it now because of the cost of implementing an accounting system.

“This isn’t just financial, but includes the time and effort spent learning how to use it and keeping it up to date.”

Mr Jackson emphasised that, while the new systems could be a good thing, professionals need to be able to properly learn the new skills. 

He explained that the news will have a bigger impact on small businesses because the overheads for setting up accounting systems will be around the same irrespective of turnover. 

As well as this, Mr Jackson added that a complicated accounting system can be too much to deal with, especially if they have only a few clients or customers. 

In order for the new systems to be properly introduced, it is important for all workers to be properly informed of the changes, or they could be left under-equipped at a time when companies need to be as productive as possible. 

By Victoria McDonnell

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