TALKING TAX
UK GOVERNMENT BOWS TO PRESSURE FOR DELAY TO DIGITAL TAX REFORMS
Bowing to pressure from professional bodies, the UK government will delay for a year far-reaching changes to the way businesses report their profits and requirements for digital record-keeping by self-employed people. According to the Financial Times, the “making tax digital” programme was scheduled to make 4.3m self-employed people and small businesses keep digital records and report their income to HM Revenue & Customs every quarter rather than annually from April 2023. Instead, the measures will take effect in April 2024, the government has announced. Plans to change the date some businesses report their prof- its - which will affect 280,000 sole traders and 250,000 partners including big city law and accountancy firms - were also pushed back a year. This reform of the so-called basis period rules, which is likely to bring in billions of pounds into the Treasury years before it would otherwise have received the money, had been set to take effect from April 2022. Lucy Frazer, the newly appointed financial secretary to the Treasury, said the government had taken the decision after listening to stakeholder feedback.
“The government recognises the challenges faced by many UK businesses and their representatives as the country emerges from the pandemic over the past year,” Frazer said in a written ministerial statement. The statement added that general partnerships will not need to report their income quarterly via digital records until April 2025 - with other types of partnerships, such as LLPs, being spared from the reforms until a yet unspecified date. The introduction of a system of penalties for late filing and payment of tax that was to be brought in alongside the digital-reporting programme was delayed from April 2023 to the following year. Regarding the basis period reform, Frazer said the government had listened to concerns that more time was needed to implement the changes. Andy Chamberlain, director of policy at IPSE, an association that represents independent professionals and the self-employed, said the delay would provide “much-needed breathing space before another painful hit to the self-employed”. Emma Rawson, technical officer at the Association of Taxation Technicians, one of five accounting and tax bodies that wrote to the Treasury last month urging a delay, also welcomed the announcement. “It’s a pragmatic decision as we were nowhere near where we needed to be,” Rawson said. Many people who would have to buy software in order to comply with the changes had not been aware it would have been needed from next year, she said. Meanwhile, only seven software providers are listed on HMRC’s website that offer products that meet the planned digital requirements for income tax. In contrast, hundreds of software providers are available for HMRC’s digital VAT programme, which has been operating since 2019. “If HMRC is going to make people buy software, then they need to make sure there’s a proper market,” Rawson said.
40 OCTOBER 2021
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98
