Her Majesty’s Revenue and Customs (HMRC) has dismissed the convenience sector’s call for Making Tax Digital (MTD) to be deferred until 2020.
Philip Hammond, chancellor of the exchequer, announced in the Budget on 8 March that it would provide 3.1 million small businesses under the VAT registration threshold – currently £83,000 – with an extra year until 2019 before they were required to keep digital records and send HMRC quarterly updates.
But most Association of Convenience Store (ACS) members do not fall below the threshold and income tax for businesses, self-employed people and landlords with annual turnover above the VAT threshold will start to go digital next year.
ACS chief executive James Lowman confirmed: “The government’s extension to 2019 for those businesses under the VAT threshold will not affect the vast majority of our members.
“The government should delay these proposals until at least 2020 to give businesses time to prepare.”
The influential House of Lords Finance sub-committee on MTD agrees with the ACS and called for HMRC to delay implementation to until at least 2020 to allow a full pilot, make MTD optional for businesses below the VAT threshold and to look again at which businesses will be included in the scheme.
The committee also urged HMRC to revise and improve its widely derided assessment of MTD’s “benefits and costs”.
Lowman said he was pleased committee members had listened to its concerns but the ACS remained concerned about the “ambitious” time frames the government had proposed.
When C-Store questioned HMRC, the government department sidestepped the calls for a further postponement.
“We’ve consulted with businesses at every step and have listened carefully to concerns. The chancellor announced at the Budget that millions of small businesses will now have an extra year to prepare for the move to digital. We will extensively pilot the digital programme, working with hundreds of thousands of businesses.
“We welcome the Lords Committee’s support for the digitisation of the tax system,” an HMRC spokeswoman said.
She added that businesses wanted to get their tax right, but HMRC’s evidence showed this was not happening and £8bn of revenue was lost every year because of errors in tax returns.
“Making Tax Digital will reduce the scope for businesses to make mistakes and the need for HMRC to intervene.”
No comments yet