The ICAEW describes as ‘encouraging’ the results of a survey of 500 UK businesses which showed 55% supporting the general move by HMRC to require businesses to send in their information online. However, only 18% of respondents felt this should be made compulsory.
The survey asked how businesses currently keep their financial accounting records, against the background of the government’s new ‘making tax digital’ proposals. These will effectively oblige them to keep records digitally using accounting software. From April 2018, the smallest businesses and the self-employed will have to comply with a quarterly payment regime; and by 2020, all businesses will come within this regime.
Just 25% of the businesses surveyed currently maintain their accounts electronically using accounting software. For the rest, observes the ICAEW, this will mean ‘incurring considerable costs to comply with the new rules’.
Most of this burden will fall on sole trader businesses, some 82% of which have yet to make the move to digital record keeping. In manufacturing and construction, 41% of businesses still rely on paper-based records.
In its own response to HMRC’s discussion paper on Making tax digital: simpler payments, published in December 2015, the ICAEW argues that any changes to the current self-assessment payment regimes should be ‘a matter of choice by the taxpayer and should not be made mandatory’. The ICAEW understands that HMRC is considering three options for the payment of taxes collected through self-assessment:
· a pay-as-you-go scheme based on quarterly reporting;
· changing the statutory payment dates for unincorporated businesses; and
· aligning the income tax and corporation tax payment date with VAT and other taxes.
The ICAEW also recommends giving more publicity to HMRC’s existing option to agree a budget payment plan, which it believes should be used more widely.
The ICAEW describes as ‘encouraging’ the results of a survey of 500 UK businesses which showed 55% supporting the general move by HMRC to require businesses to send in their information online. However, only 18% of respondents felt this should be made compulsory.
The survey asked how businesses currently keep their financial accounting records, against the background of the government’s new ‘making tax digital’ proposals. These will effectively oblige them to keep records digitally using accounting software. From April 2018, the smallest businesses and the self-employed will have to comply with a quarterly payment regime; and by 2020, all businesses will come within this regime.
Just 25% of the businesses surveyed currently maintain their accounts electronically using accounting software. For the rest, observes the ICAEW, this will mean ‘incurring considerable costs to comply with the new rules’.
Most of this burden will fall on sole trader businesses, some 82% of which have yet to make the move to digital record keeping. In manufacturing and construction, 41% of businesses still rely on paper-based records.
In its own response to HMRC’s discussion paper on Making tax digital: simpler payments, published in December 2015, the ICAEW argues that any changes to the current self-assessment payment regimes should be ‘a matter of choice by the taxpayer and should not be made mandatory’. The ICAEW understands that HMRC is considering three options for the payment of taxes collected through self-assessment:
· a pay-as-you-go scheme based on quarterly reporting;
· changing the statutory payment dates for unincorporated businesses; and
· aligning the income tax and corporation tax payment date with VAT and other taxes.
The ICAEW also recommends giving more publicity to HMRC’s existing option to agree a budget payment plan, which it believes should be used more widely.
