Milsted Langdon’s resident tax specialist, Simon Denton, has spoken up and expressed concerns regarding the Government’s controversial Making Tax Digital (MTD) initiative.
Simon’s comments come after HM Revenue & Customs (HMRC) came under fire from the Association of Taxation Technicians (ATT) last week, who suggested that quarterly digital reporting, and the entire digital accounts system, should be delayed.
The ATT has said that the MTD project represents “the biggest change to the way taxpayers will engage with HMRC since the introduction of PAYE in 1945.”
A separate study from the Institute of Chartered Accountants in England and Wales (ICAEW) recently found that around 82 per cent of self-employed individuals and 75 per cent of businesses will need to completely change the way they currently keep their records in order to comply with MTD.
Simon Denton, Partner at Milsted Langdon, said: “The Government hasn’t thought through how radical a change this will be for business; especially their intention to make the new quarterly submissions mandatory unless you meet the narrow category of the ‘digitally excluded’.
“HMRC has also massively underestimated how many small businesses do not keep digital records,” he added.
Simon expressed concern that the changes could side-line accountants and see businesses and taxpayers struggling to juggle their online accounts independently, and potentially paying too much tax as a result.
“I am particularly concerned that HMRC see this initiative as an opportunity to marginalise agents so they can deal with taxpayers directly. If this happens we will see taxpayers not paying ‘the right amount of tax’ but will instead see them paying ‘the maximum amount of tax’,” he warned.
HMRC has recently confirmed that MTD consultations will be postponed until after the June 23 EU Referendum.