Businesses welcome report on Making Tax Digital

Business owners will welcome the Treasury Select Committee’s conclusion that HMRC’s proposed timetable for implementing a digitised tax reporting system is ‘too short a lead time’.

The Committee said plans to implement Making Tax Digital (MTD) from 1 April 2018 were insufficient for such a fundamental change in the way businesses interact with HMRC. It suggested that pilots of the end-to-end system are carried out and reviewed before it is made mandatory.

The Committee also raised questions about software, which ideally should be free and easy to use, and the cost of introducing MTD and maintaining digital records.

Sharon Bedford, head of business tax at James Cowper Kreston, a local firm of accountants and business advisers, said: “Businesses generally accept that technology can be used to streamline the tax process further. However, the speed with which HMRC were proposing to introduce changes was alarming both to the business community and their advisers.

“Any move by HMRC towards a staged introduction with a properly constructed pilot test would be extremely well received.”

The new system, which will require businesses to keep accounting records in digital format and submit quarterly updates to HMRC, is likely to affect as many as five million businesses.

For more information, please call Sharon Bedford on +44 (0)1865 861166