HMRC’s impact assessments were inadequate when ascertaining the cost of Making Tax Digital (MTD) for VAT, the House of Lords Economic Affairs Committee says.
Slamming HM Revenue & Customs (HMRC), the committee says the Revenue “inadequately considered the needs and concerns of smaller businesses” adding that the controversial tax “will make life even more difficult” for them.
According to research from the Institute of Chartered Accountants (ICAEW), as many as 40 per cent of the 1.2 million businesses for which making tax digital could be mandatory have not even heard of the controversial reform, yet alone are prepared for the “significant change” required to their business practices if it is introduced on 1 April 2019 – particularly with Brexit taking place three days earlier.
Responding to the report, a spokesperson for HMRC says they have already written to 200,000 businesses and will be writing to many more in the coming weeks to let them know about the changes and how to prepare.
Anita Monteith, ICAEW Tax Manager, says the ICAEW supports HMRC’s ambitions to embrace digital technology, but shares the concerns of the committee that many businesses are not ready for implementation: “Direct communication by HMRC about this major change is only just beginning and with only four months to go, there is not enough time for businesses to act.
“Time is running out. MTD for VAT is a major change in tax administration and, with its start date coinciding with Brexit, it is important for businesses, the economy and the UK tax system that it is a success. This is too important to be rushed.”
Both the Association of Independent Professionals and Self-Employed, as well as the British Chambers of Commerce have expressed concerns about the speed of implementation and called for MTD to be delayed to April 2020 due to low levels of awareness and proximity to Brexit.
How Beavis Morgan can help you and your business
Growing businesses often don’t have the time or resource to set up a full accounting function within the business. That’s why, at Beavis Morgan, we offer the capability to outsource your finance department to us.
We will take care of your day-to-day accounting needs, oversee the MTD for VAT changes on your behalf, and provide you with a single point of contact so that you can focus on what you do best – growing and managing your business.
We will also help you navigate any potential pitfalls and ensure all your accounting, financial and bookkeeping needs are managed from one place, so you don’t need to act as the go-between for your accountant and bookkeeper.
- You will never need to worry about missing a VAT deadline, or the complexities of running payroll.
- You will have access to accurate, reliable and timely financial information when you need it, whether that be profit or cash focused, or both, to accurately and effectively manage the company’s finances and drive growth.
- Our business experts will work with you to identify your requirements and then design and implement a system that will provide all the information you need, within a cost effective and efficient framework.
In turn, if you have any concerns regarding your tax return or other related matters, our experts at Beavis Morgan are available to assist. We take the hassle of dealing with HMRC away from you, so you don’t need to liaise with them directly.
Contact your usual Beavis Morgan Partner for further information and assistance.