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UK Watchdog Criticizes Plans For Quarterly Business Updates

by Robert Lee, Tax-News.com, London

11 April 2016


The UK's Administrative Burdens Advisory Board (ABAB) has said that it cannot endorse the Government's proposals to require businesses to provide quarterly online updates and institute compulsory digital record keeping.

As part of HM Revenue and Customs' (HMRC's) Making Tax Digital project, by 2020 most businesses, self-employed people, and landlords will be required to "keep track of their tax affairs digitally and update HMRC at least quarterly via their digital tax account." David Gauke, the Financial Secretary to the Treasury, has stressed that "this will be a light touch process, not the equivalent of four tax returns each year."

The ABAB is an independent board, established in 2006 to help support HMRC to make tax easier, quicker, and simpler. In its 2016 annual report, the ABAB said: "We are concerned that the proposals for quarterly updates will be more burdensome than they currently are with increased record keeping and compliance costs. This will have a big impact on the smallest of businesses."

"The requirement that as part of the reforms all businesses will have to keep records digitally is a significant concern, given the timescales to educate businesses and provide the necessary tools for them. We also have reservations around the current capability of software being able to deliver HMRC's vision and the appetite amongst small businesses to utilize them, so we therefore urge HMRC to explore this further urgently."

Reacting to the ABAB's report, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), commented: "Forcing small firms to pay for expensive digital accounting software so they must submit extra tax returns is not going to help anyone. It will simply add to the cost of doing business in the UK. These proposals will also substantially increase administrative burdens – particularly for the smallest businesses."

"When every independent body and expert is lining up to tell you to stop, slow down, and think again, it might be time to take a breather and listen to their concerns."

TAGS: compliance | tax | small business | business | value added tax (VAT) | tax compliance | Federation of Small Businesses (FSB) | accounting | United Kingdom | tax authority | HM Revenue and Customs (HMRC) | trade association | HM Revenue and Customs (HMRC) | trade

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