Year-End & Cash Flow

Petition against quarterly tax reporting gains 100, 000 signatures

Hannah Wilkinson | 5 January 2016 | 8 years ago

quarterly tax reporting
As well asinspiring 100, 000 individuals to pledge their disapproval, the proposed changes have come under fire from accountants.
A petition urging the government to reconsider proposals on how often firms have to update HMRC has attracted enough support to be debated in parliament.

The measures, announced by George Osborne in his 2015 Autumn Statement, will require small businesses and sole traders to provide information to HMRC every three months, replacing the current annual reporting deadline. The government proposed in November to put the policy in place by 2020, by which time all individuals will have their own online account with HMRC.

It was unveiled as part of the chancellor’s plan to build one of the most digitally advanced tax administrations in the world, and the government reacted to the online petition by defending its merits.

many taxpayers have told HMRC that they want more certainty over their tax bill, and don’t want to wait until the end of the year, or even longer, before knowing where they stand with their taxes, said a spokesperson.

updating HMRC through software or apps will deliver a light-touch process, much less burdensome and time-consuming than it is today. These reforms will not mean that businesses have to provide the equivalent of four tax returns every year. they added.

But some members of the UK200Group of independent accountancy and law firms have criticised the plans, estimating that they could cost micro businesses as much as 600 per year in additional accounting costs.

Jonathan Russell, a partner at ReesRussell, said: The government has illustrated again its lack of understanding of accounting and small businesses.

many small businesses are not capable of preparing financial accounts to this detail and have to engage professional help and unfortunately the work involved to produce a quarter’s accounts is almost as much as to do it for a year.

Other accountants emphasised that many details of the planned measures are yet to be revealed, and cautioned against criticising a policy before its implications were clear.

given that the details are yet to be discussed, I have so far assumed that HMRC’s sketch is of the ideal position, which might be achievable, rather than the initial one which would be mandated. This seems to be borne out by HMRC’s initial response to the petition, said Andrew Jackson, Head of Tax at Fiander Tovell LLP.

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