MP echoes doubts over quarterly tax system
Fears expressed more than a year ago that Making Tax Digital (MTD) – which will affect the majority of freelancers – is being rushed have finally been echoed in Whitehall.
Andrew Tyrie MP, chair of the Treasury Select Committee tells chancellor Philip Hammond in a newly published letter that, with MTD; it is “better to get it right than to stick to a rigid timetable.”
Mr Tyrie’s timely warning – it comes just a few days after Mr Hammond set the date for his first Autumn Statement - supports concerns first expressed by PwC in March 2015.
In particular, the accountancy giant cautioned at the time that the government’s timetable for MTD was “highly ambitious,” noting the 12 months to implement the system as “very tough” to achieve.
Those concerns were reinforced by tax body the ATT in May this year, after HMRC published six MTD consultations but afforded the equivalent of just one month per consultation to consider people’s responses.
Now Mr Tyrie, regarded by a national paper as “the most powerful backbencher in the House of Commons,” has intervened by contacting the new chancellor directly.
“There may be a case for delaying implementation of MTD,” he tells Mr Hammond in his letter. “A year’s extension for an unspecified group of businesses may not be enough.”
As well as the issue of timing, Mr Tyrie points out in his letter that “there remains considerable concern with the proposals” themselves.
He questions just how many traders will benefit from the £10,000 exemption; how traders slightly over the exemption will fare from their burdens increasing and how long the software can be assured as being free of charge.
And charges against the Revenue that MTD is intrusive or draconian, on the basis that it requires taxpayers to update their digital accounts “at least quarterly,” also seem to trouble the Treasury committee chair.
“The new requirement for digital record keeping and reporting is far more than simply entering a handful of totals”, Mr Tyrie writes. “It is tantamount to prescription by HMRC, for the first time, of a particular form in which accounting records must be maintained.”
The Tory MP also said: “Much depends on the consultation responses. They may require a delay. Getting this right matters a lot, particularly to the small businesses who could be hit hard by a mistake.
20th September 2016