Body will face battle to sell the benefits of tax reforms

Officials at HM Revenue & Customs (HMRC) still face an uphill battle to convince businesses of the merits of the flagship Making Tax Digital (MTD) initiative.

Research carried out by the tax authority acknowledged that the challenges that the new system presented were more obvious than the benefits.

Among the main concerns of the firms questioned included the burden of digital record keeping and the prospect of reporting tax on a more regular basis.

With this in mind, HMRC believes that the design of the MTD software would “make or break” the reforms, with accessibility key if firms are to be persuaded of the long-term advantages.

“[The software] could function as a key enabler or a major barrier,” said the report.

The survey, which was carried out on behalf of HMRC by an independent research company last year, assessed attitudes in nine different sectors.

Some commentators have pointed out that questions were asked prior to detailed consultation papers being made available last summer, so it is impossible to tell if that documentation majorly shifted views one way or the other.

Aware of concerns in some quarters about the timetable previously set out for implementing the new system, the Chancellor used last week’s Budget to announce a delay in the implementation of MTD for the nation’s sole traders, landlords and the self-employed operating beneath the new £85,000 VAT threshold.

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