Quarterly tax returns rejected by HMRC overseer
New government plans for ‘digital tax accounts', that could see contractors forced to update their tax information every quarter, have been snubbed by a bureaucracy watchdog that works with HMRC.
In a report published earlier this month, the Administrative Burdens Advisory Board (ABAB) predicted that plans announced by George Osborne – including mandatory quarterly tax updates – would create too large a burden on small businesses.
ABAB raised concerns about the extra work that businesses would have to do to keep their accounts in order, and additional costs they would incur.
In their annual report ABAB said: “Compulsory digital record-keeping and quarterly online updates is not an approach we can endorse.”
They went on to say: “We are concerned that the proposals for quarterly updates will be more burdensome than they currently are, with increased record-keeping and compliance costs. This will have a big impact on the smallest of businesses.”
The body, which was established in 2006 to support HMRC and represent the interests of small businesses, also raised concerns about forcing all businesses to complete their taxes digitally. They suggested that some of the smallest independents and businesses would not have the required online skills. They suggested that the government needs to put in place some measures to help support these business owners as they engage digitally.
However, in the advisory body’s report they also recognised the importance of updating the tax system for the modern age.
It said: “Whilst we recognise and are supportive of the need to move to digital and the potential this brings, we are disappointed with the announcement to mandate digital record-keeping and quarterly online reporting for even the smallest businesses as part of Making Tax Digital for Business.”
Responding to the news, Miles Grady, Director of Umbrella.co.uk said: “The thought of doing one tax return a year upsets most limited company contractors, so it’s good that ABAB have stepped in to pour cold water on the quarterly tax updates idea.
“At Umbrella.co.uk we try to take the hassle out of accounting and one of the best ways is to use digital technology and online tax tools. We understand that they can be complicated at first, but once customers get used to them they often find it much easier to handle their accounts. And if they ever get stuck then we are always on the end of the phone to help out in any way we can.”
For more information call the team at Umbrella.co.uk 01625 546 610 or email email@example.com