The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
On this particular subject, ABAB’s report says:
“…we are very supportive of the move to digital but have reservations as to whether this will meet the needs for all small businesses, together with the level of support that will be available and the pace of change. Therefore compulsory digital record keeping and quarterly online updates is not an approach we can endorse. 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 requirement that as part of the reforms all businesses will have to keep records digitally is a significant concern, given the timescales to educate businesses and provide the necessary tools for them. We also have reservations around the current capability of software being able to deliver HMRC’s vision and the appetite amongst small businesses to utilise them, so we therefore urge HMRC to explore this further urgently.” “…We are pleased to see that HMRC have formed the Assisted Digital Group to explore such issues and we will work closely with them to ensure that our concerns are addressed and that this understanding is obtained to inform delivery. As part of this engagement, we will be examining carefully the cost implications for businesses of conforming to MTD requirements. “
“…We urge HMRC to engage and consult with key business representatives and in particular the Office of Tax Simplification (OTS) to help identify, inform and support simplification.“
We will work closely with HMRC in 2016/17 and monitor the developments of the Making Tax Digital agenda. “
A consultation is due to be published this year but as yet no timescale has been provided.
ABAB’s 2016 Annual Report will be available on GOV.UK shortly but in the meantime you can read the full report through the link below.
ABAB 2016 Annual Report
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Making Tax Digital will require software compatibility 3 May 2016
The Treasury Committee has written to the Financial Secretary to the Treasury, David Gauke, outlining their concerns that making tax digital is going to be a costly transition for all businesses if software has to be compatible with HMRC requirements. The letter refers to research conducted by The Institute of Chartered Accountants in England and Wales (ICAEW) which suggests that 75 per cent of all businesses, and 82 per cent of sole traders, would need to change their record keeping systems to comply with the Government's new proposals for Making Tax Digital (MTD). The letter also quotes from a briefing by the Tax Faculty team at ICAEW which says that businesses would be required not just to submit information to HMRC online once a quarter, but that they would also be required to do all their record keeping in a prescribed digital format. “One aspect in particular has not, in our view, been as clearly articulated as it might have been. It is that MTD will also include a requirement for digital record keeping. While HMRC has said very clearly that it does not want transactional data in the proposed quarterly returns, what it will want is for businesses and self employed people themselves to keep their accounting records digitally. Verbally we are told that using excel is not digital record keeping; it will have to be accounting software. If so, this will have serious book keeping consequences for many businesses and it is certain that the old brown paper parcel approach to book keeping will be dead.” The Treasury Committee’s letter also states: “It is not too late to do something about this. A thorough impact assessment is the minimum required before proceeding with the Government's proposals to make digital record keeping compulsory.” Further to this briefing in a news item the ICAEW said:
CIPP comment There is to be a wide-ranging consultation exercise on Making Tax Digital which is due to start shortly. The Policy Team will be reading and disseminating all documents to the payroll profession and will of course involve members
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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