Press release: Concerns remain about digital deadline despite welcome concessions for small businesses

15 August, 2016

The Association of Taxation Technicians (ATT) has reiterated its call for a change to the timetable for the implementation of quarterly digital reporting by at least a year to ensure it is robust and fit for purpose, despite some government concessions to business people today that should help small traders and landlords.

The ATT is currently analysing the details of the six consultation papers on the Making Tax Digital (MTD) project, of which quarterly reporting is an element, that have been issued by HMRC today.1

Yvette Nunn, Co-chair of ATT’s Technical Steering Group, said:

“We welcome the decision to make all unincorporated businesses2 and landlords with income or turnover below £10,000 exempt. This will vastly simplify matters for those starting up in business where it can take a good few years to really get off the ground. These businesses will now have the comfort of knowing they will not have to contend with providing HMRC with quarterly digital updates and can fully concentrate on growing the business.

“Although we support the exemption, the figure of £10,000 strikes us as a very small threshold and we suggest it should at least be aligned with the personal allowance each year, otherwise it is overcomplicating tax for the very smallest businesses.”

The ATT has consistently raised concerns to HMRC that the existing timetable is overly-ambitious. It has reiterated its call on HMRC to change the timetable for the implementation of quarterly digital reporting for all unincorporated businesses and landlords by at least a year. It first expressed this view in May when it learned there was a delay to the consultation process for MTD because the Government, understandably, wanted to focus on the unrelated EU Referendum.

Yvette Nunn said:

“We have only just received six very detailed consultations some seven weeks after the EU Referendum. These consultations include a great deal of information and ask many questions. HMRC should be allowing sufficient time to analyse all the feedback that it can expect to receive to ensure this informs the final implementation design of MTD. Given the late issue of the consultations and the 7 November deadline for responses, it leaves a very short timeframe in which HMRC can carry out this important analytic phase and to get all the final details into place.

“While we are certainly pleased that HMRC has decided to allow a one year deferment period for the next rung of small businesses and landlords with income over £10,000 but below an as yet unspecified limit, that will still leave many other unincorporated businesses, including some fairly sized partnerships and landlords who will need to operate within the new digital rules of MTD from 6 April 2018. It is still important that there is a robust system that is fit for purpose in place for those businesses and that they do not suffer from a bad experience by being used as ‘guinea pigs’.

“To rush ahead with this project without allowing adequate time for the consultation and testing phases in April 2017 could put at risk the many potential benefits for taxpayers and HMRC which greater digital working can bring.”


Notes for editors

  1. The consultations cover the following areas:

    Bringing business tax into the digital age

    Transforming the tax system through the better use of information

    Tax administration

    Voluntary pay as you go

    Simplifying tax for unincorporated businesses

    Simplified cash basis for unincorporated property businesses
  2. Being unincorporated means that the organisation has no separate legal identity of its own. The full risks and liabilities involved in running the organisation or business are taken on by the individuals who own and/or manage. An example could be a window cleaner or a plumber.