103,000 signatories on tax petition forces Government response
THE GOVERNMENT has given an official response to an online parliamentary petition started less than three weeks ago, pledging that “making Tax Digital will not mean ‘four tax returns a year’.”
The response follows hefty criticism of the Government’s plans, which has manifested in more than 103,000 signatures to a petition to ‘Scrap plans forcing self employed and small business to do four tax returns yearly’.
The subject should now be debated in the House of Commons, with a date to be scheduled by its Petitions Committee.
The change, buried in the detail of the Government’s Autumn Statement, is part of HMRC’s transformation to a fully digital tax service. By 2020, all business taxpayers will provide their tax information to HMRC via their digital tax account.
The Government’s response to the petition continued: “Quarterly updates will largely be a matter of checking data generated from record keeping software or apps and clicking ‘send’.
“These reforms will not mean that businesses have to provide the equivalent of four tax returns every year. Updating HMRC through software or apps will deliver a light-touch process, much less burdensome and time-consuming than it is today.”
It added: “In most cases, little or no further entry of information will be needed. It will be much quicker to complete than the current tax return.”
The changes will rely on businesses, self-employed people and landlords using software or apps that connect securely to their digital tax account. The government has now said that it will ensure free software products are available.
Here’s how HMRC has said the quarterly updates will be “fundamentally different” from filling an annual tax return: • Businesses will have access to free record keeping software or apps that can connect securely to their digital tax account. • Quarterly updates will not involve the complexity of a full tax return – the updates will be generated from existing digital business records. • In-year updates will not be subject to the same sanctions for lateness or inaccuracies as apply now to the year-end position – HMRC will consult during 2016 on what sanctions might be appropriate for a more digital tax administration. • Business owners will receive a developing in-year picture of their tax position, giving more certainty over their tax bill, rather than being “caught out” by their tax bill when it arrives.HMRC’s outlining document ‘Making tax digital’ sets out how HMRC’s digital future will be achieved by 2020 and can be read here .
The online petition, along with the Government’s full response, can be viewed here .
