Independent committee slams digital tax plan

Small business leaders on HMRC’s independent advisory board have expressed disappointment at government proposals to make digital tax accounts compulsory, decrying the plans as burdensome? for the UK’s smallest businesses.

The Administrative Burdens Advisory Board (ABAB)’s annual report raised concerns about record keeping and compliance costs for small business owners, as well as the speed at which the changes will be brought in.

we are very supportive of the move to digital but have reservations as to whether this will meet the needs for all small businesses, together with the level of support that will be available and the pace of change. Therefore, compulsory digital record keeping and quarterly online updates is not an approach we can endorse, wrote board members.

The report’s authors also raised concerns about delays in the creation of arrangements incorporating agents into the digital tax system, arguing: The great majority of small businesses interact and have a relationship with an agent for some or all of their tax affairs, and this delay will have a continued impact on them.

Mike Cherry, national chairman of the Federation of Small Businesses (FSB), welcomed the criticism, commenting: The writing is on the wall as more and more small business owners are making clear their concerns about this poorly thought out plan. Forcing small firm leaders to pay for expensive digital accounting software so they can submit extra tax returns is not going to help anyone. It will simply add to the cost of doing business in the UK.