Government plans to force millions of small businesses and landlords to make online quarterly updates to the tax office from April 2018 are far “too rushed” and “too unclear”, warns top 40 accountants Bishop Fleming.
The firm endorses a report from MPs on the Treasury Select Committee which called for a delay of at least one or two years before the planned digitisation of the tax system takes place. Bishop Fleming claims the “unseemly rush” to launch Making Tax Digital is “putting businesses at risk”.
As the proposals stand, businesses and landlords with an annual turnover of at least £10,000 will have to e-file updates of their accounts to the tax office four times a year starting from April 2018; that's just over a year from now.
But Bishop Fleming agreed with the Select Committee's claim that more time was needed before the new regime is implemented.
Bishop Fleming's Head of Tax, Andrew Browne, commented: “Tax digitalisation should be delayed until at least 2019 and preferably later, until we have the results of a wide-ranging pilot scheme that has identified issues that will need to be addressed. The Select Committee clearly believes, and I agree, that small businesses will not be ready by the April 2018 implementation date. The MPs have raised some very serious and pertinent questions which the Government needs to answer; I will be interested to see its reply.”
Mr Browne added: “There is currently no sight of the promised free software for businesses to make their submissions, so the actual mechanics of making the submissions is not yet in place. I am also concerned that the costs for small businesses in complying with the project will be far more substantial than the Government has so far admitted.”
The Bishop Fleming partner further added: “The £10,000 threshold for being forced onto the scheme is also far too low. The Select Committee's call for it to be raised to the VAT threshold of £83,000 clearly makes a lot of sense; I have seen no evidence that it should be less than that.”