HMRC Quarterly Business Tax Returns
More than 100,000 small firms have signed a petition demanding a rethink on proposals requiring most businesses to file HMRC quarterly business tax returns instead of annual tax returns via digital tax accounts.
The petition was started on 16 December 2015 on the Government’s own portal. It has now received over 100,000 signatures which is the point at which Parliament is expected to debate the subject.
The Spending Review and Autumn Statement 2015 announced the commitment to invest £1.3 million to transform HMRC into one of the most digitally advanced tax administrations in the world. This will see most businesses, self-employed people and landlords being required to keep track of their tax affairs digitally and update HMRC, at least quarterly, via their digital tax account.
It is hoped to reduce errors currently encountered through record keeping and to give individuals and businesses a more convenient real-time view of their tax affairs. It will also provide them with greater certainty about the tax they owe.
The proposal is not to apply to individuals in employment, or pensioners, unless they have secondary incomes of more than £10,000 per year.
Commenting on the plans which will require small businesses to move from annual to quarterly digital tax reporting by 2020, John Allan, National Chairman at the Federation of Small Businesses, said:-
“While the FSB supports HMRC’s digital transformation, members are deeply concerned with the move to enforce compulsory online quarterly reporting of their tax submissions. Adding more reporting appears out of step with wider Government attempts to reduce the regulatory burden and to streamline tax arrangements. Members already spend on average £3,600 completing their tax returns with many still completing theirs manually.
“The UK’s self-employed will particularly struggle with this change. We therefore want to see proper consultation with business groups and professional bodies, a clear statement of benefits to the business community and a package of support to help offset this new burden on business.
“The push towards digital must be introduced alongside tax simplification, with businesses able to choose the best tax reporting process appropriate for them.”
Further information on the transformation plans of the tax system are to be published in 2016 with consultation on the full details.
Current HMRC plans on making tax digital can be found here.
