HMRC change set to increase cost and workload
HMRC is bringing in a new tax regime for every taxpayer, and the legislation for this is due to be written over the summer. While not compulsory for individuals, this will be mandatory for businesses and will create extra expense and work
Called the Tax Dashboard, itâ€™s going to radically alter the way businesses report to HMRC. It will force firms to keep digital records so that reports can be submitted to HMRC four times a year.Â The impact is likely to include changes to daily and weekly record keeping, and firms will need to use HMRC compatible software to submit the information.
Somehow, firms and HMRC need to get to the exact same position as they would with the full annual self-assessment return, which will still exist in parallel. In practical terms, the only way to check whatever comes out from the aggregation of the four quarterly reports will be to still do a full self-assessment for your own purposes, even though that wonâ€™t actually be submitted. This is extra workload.
HMRC seems set on having the new system. While the regime is not destined to fail, there is a risk that it could â€“ and if it did, how will that be dealt with? It could be that firms will, effectively, be given impossible obligations to meet and would then be penalised for failing to meet these obligations. The laws behind the system have to be passed by April 2017, so draft clauses will be published by December 2016. This means theyâ€™ll be written this summer.
If businesses want some chance of changing the regime they need to speak to their MP and HMRC between now and the end of July. HMRC has said that it will consult on the detail and want to hear from taxpayers and some people are already making their views known. More details of whatâ€™s happening can be found here.
If you are concerned about the changes, contact details for your local MP can be found here. Remember, those who say or do nothing before the summer will be left complying with whatever is passed by Parliament.
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