Research declares Making Tax Digital plans ‘unrealistic’

The accountancy profession has criticised the government once again over its plans to impose mandatory digital tax returns every quarter.

The CloT, ATT and AAT surveyed members, and found that the plans are“unrealistic” and “insufficient”. The organisations have serious concerns over the timescales involved and the stated threshold. Research conducted by several firms has found that the deadline for MTD is “unachievable.”

John Cullinane, of the CIOT, said: “The struggle to move to digital record keeping and quarterly reporting is unrealistically tight.

It is agreed that digitisation can bring efficiency and other benefits to HMRC and taxpayers alike, yet the government appears to be forcing the pace.

“Advisers may be unable to cope – with the current tax obligations as well as the MTD transition.

“There is a significant risk that small businesses will fall into non-compliance, whether deliberately or inadvertently, unless HMRC reconsiders the timetable for mandating MTD. The spirit of voluntary compliance is at stake which sees over 90% of all that is collected without intervention from authorities.”

The AAT found little backing for the proposed MTD exemption for businesses with a gross income under £10,000 – just 5 per cent of respondents felt it would be sensible.

The accountancy body would, given the power to do so, set the boundary at the current VAT threshold, £83,000. It would then fall to £11,000 over a three-year period. In the CIOT and ATT survey, 87 per cent called for a rise to the £10,000 limit.