The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
There will be an opportunity for interested parties to consider the initial assumptions behind the impact assessment when it is published, and the detail of the proposals when the formal consultation begins. HMRC will be working extensively with stakeholders throughout 2016 to develop their evidence which will inform the updated assessment in the Tax Information and Impact Note to be published alongside draft legislation. These proposals will require a behaviour shift for many smaller businesses, but it is important to note that they go with the grain of what millions of businesses are already accustomed to doing -transacting online, including with the taxman. Research by the Department for Business Innovation and Skills in 2015 found that 97% of small businesses and 92% of micro businesses had access to the internet at work. It is therefore unsurprising that the overwhelming majority of returns for the main business taxes are submitted online. Some two million small and medium sized business are already using software for payroll and VAT. In the last year the number of users accessing their digital tax account has more than doubled to over 5 million. Businesses therefore have a strong appetite for digital services, as do the agents who represent them. An overwhelming number of businesses already choose to maintain their records in a digital format even though there is currently no requirement for them to do so. HMRC will ensure that compatible software products are available to suit the budgets and needs of all businesses, including some free products for those small businesses with the simplest affairs. Of those businesses not currently using software, HMRC will provide additional support to build their confidence in using digital tools for their business, simplifying their affairs and integrating tax into their ordinary day to day activity. Most stakeholder groups have welcomed the vision of a transformed and fully digital tax system, but HMRC is aware that concerns about its implementation still remain. HMRC will listen to stakeholders who represent small businesses and their intermediaries ensuring that the final design takes account of their views and is fully informed by existing practices. CIPP comment As we have said previously and David Gauke also mentions above, there is to be a wide-ranging consultation exercise on Making Tax Digital which is due to start shortly – at least four separate consultations are to be published. The Policy Team will be reading and disseminating all documents to the payroll profession and will of course involve members and the industry accordingly for your invaluable input. Please do get involved if you are able to.
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Making Tax Digital consultations published 16 August 2016
The anticipated Making Tax Digital (MTD) consultations have been published and due to the scale of the reforms, HMRC has brought out six separate documents, each focusing on specific customer groups or specific elements of the Making Tax Digital changes.
At Budget 2015 , the government set out the vision for a transformed tax system. The MTD Roadmap , published in December 2015, set out the government’s plans to deliver a fully digital tax service by 2020.
These reforms are ambitious and radical and there is a lot to design and develop before 2020 and HMRC recognises the importance of consulting widely with interested parties to help shape these changes. The consultation period will run for a full 12 weeks until 7 November 2016. Although this is the start of the formal consultation period, HMRC has been engaging extensively with stakeholders since Making Tax Digital was announced in 2015 and much of the content of these consultations has been informed by that engagement. Overview for small businesses, self-employed and smaller landlords Alongside the six consultations HMRC has published a document which provides an easier way to respond to the Making Tax Digital consultations than the full formal consultations. It is specifically aimed at small businesses, the self- employed and landlords and includes a summary of the main issues and selected questions, with links to the full consultations at various points, if more detail is required.
CIPP comment
The Chartered Institute of Payroll Professionals
Policy News Journal
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