Quarterly business tax returns questioned by independent watchdog
The Administrative Burdens Advisory Board (ABAB), an independent oversight body for HMRC, has “significant concerns” about the government’s plans to introduce quarterly digital tax returns for businesses.
The government wants to make most businesses, self-employed people and landlords to manage their taxes online using digital accounts by 2020. Autumn Statement 2015 also saw the announcement that HMRC wants to be updated “at least quarterly ” via these digital tax accounts.
In its annual report, the ABAB said that the proposals for quarterly updates will add an extra burden to businesses due to increased record keeping and compliance costs.
The watchdog also has concerns over the capability of software to deliver the move to digital tax accounts.
In a speech in March 2016, financial secretary to the Treasury David Guake said that the reforms would “make it easier for business to understand how much tax they owe, giving them far more certainty over their tax position, helping them budget, invest and grow.”
Mike Cherry, national chairman of the Federation of Small Businesses, said:
“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.”
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