The digitalisation of tax returns will impose significant additional tax compliance costs on small businesses for little or no medium term benefit, tax and small business experts told MPs on the Commons Treasury Committee on 25 October. (Read more at Accountancy Age.)
Here are some of my tweets on the proceedings:
Continue reading Tax tweets: Treasury committee hearing on Making Tax Digital
The digitalisation of tax returns will impose significant additional tax compliance costs on small businesses for little or no medium term benefit, tax and small business experts told MPs on the Commons Treasury Committee.
HMRC is consulting on the Making Tax Digital (MTD) project until 7 November. The project has “possibly very adverse implications for hundreds of thousands of small businesses,” committee chair Andrew Tyrie said.
ACCA head of taxation Chas Roy-Chowdhury said that while businesses with tax agents are aware of MTD, smaller businesses “probably have no idea whatsoever what’s going to come down the track”.
Read more: My news story for Accountancy Age, 26 October.
HM Revenue & Customs and politicians could do more to educate the public about tax and dispel “misleading impressions” about tax avoidance given by media reports, the Chartered Institute of Taxation has told the All Party Parliamentary Group on Responsible Tax.
The idea that there is a large “pot of gold” that could have reduced the need for austerity measures is a myth, the CIOT said, adding that “the concept that HMRC has failed to raid this non-existent pot is a fundamental misreading of reality.”
An APPG consultation was launched in September to consider HMRC’s ability to fight tax avoidance and evasion …
Read more: My news story for Tax Analysts, 26 October (paywall).
A continuing lack of transparency in the UK’s overseas territories and crown dependencies will significantly hinder efforts to curb global corruption, and more must be done to ensure that developing countries’ voices are heard on international tax reform, according to a cross-party committee of members of Parliament.
The International Development Committee welcomed the work done by the OECD through its flagship base erosion and profit-shifting project. “However, international tax discussions must be fully reflective of international concerns, including those of developing countries, and we remain concerned that the OECD – due to its composition – is not adequately reflecting the needs of the poorest countries in its policy outcomes,” the committee said in a report titled “Tackling Corruption Overseas,” published October 19.
Read more: My news story for Tax Analysts October 20 (paywall).
The UK’s Office of Tax Simplification should focus on preventing rather than curing complexity, according to tax professionals responding to the office’s “high-level strategy” consultation. The OTS says that while its mandate does not extend to a “formal say” on future policy, its goals include embedding simplification into the policy-making process. One expert told Tax Analysts that given the right focus and resources, the OTS could “hold the key to wholesale reform.”
Read more: My news story for Tax Analysts October 15 (paywall).
A loss of confidence in the performance of Concentrix led to the decision not to extend its contract, Jon Thompson, HMRC chief executive and permanent secretary, told the House of Commons Work and Pensions Committee. Thompson spoke during an evidence session on October 13, two days after the Public Accounts Committee (PAC) opened an inquiry into HMRC’s performance. The PAC has invited submission of written evidence by midday on October 18.
HMRC engaged Concentrix’s Belfast office to check entitlement to tax credits. In the middle of August, Concentrix’s performance in answering the telephone was “dramatically reduced,” with fewer than 10 percent of calls being answered, and the amount of time taken to get through to staff rose to more than 30 minutes, Thompson said. Philip Cassidy, Concentrix’s senior vice president, told the committee that the company apologised to four tax credits claimants who spoke earlier in the evidence session and to “all the other [claimants] that were impacted.”
Read more: My news story for Tax Analysts October 14 (paywall).
UK government proposals to penalise enablers of tax avoidance schemes could prevent some taxpayers from getting expert advice on complicated issues, according to the Chartered Institute of Taxation. The proposed penalties should be better targeted at those who deliberately seek to profit from avoidance, CIOT said in an October 12 press release.
Separately, Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales, has warned that politicians have unfairly singled out accountants in their criticism of professional advisers over avoidance.
Read more: My news story for Tax Analysts, October 13 (paywall).
A proposed new tax system for small companies would increase uncertainty and confusion among small business owners and increase the scope for errors, UK tax experts said in response to consultation on the merits of a “look-through” model.
The UK already has two complicated systems, one for unincorporated businesses and one for corporate bodies, the ICAEW Tax Faculty noted a submission to the Office of Tax Simplification. “Rather than introduce a new model we would support simplification in each area,” the Faculty said. The Chartered Institute of Taxation said a key effect of a mandatory look-through system appeared to be to generate an increased tax yield from small business.
Read more: My news story for Tax Analysts, 8 October (paywall).
And there’s an interesting discussion on Twitter, in response to this tweet: