Making Tax Digital: discussion paper on simpler payments
LITRG has responded to the Making Tax Digital: Simpler Payments discussion document recently issued by HMRC. The document made several suggestions as to possible further policy developments within the Making Tax Digital framework. While HMRC’s efforts to develop ways in which taxpayers can interact with them digitally if they so choose is to be generally supported, we have identified some serious flaws in the current proposals. We strongly urge HMRC to very carefully reconsider its strategy in this area.
Taxpayers should be able to understand their tax obligations, in particular how much to pay and when, and we do not believe that aligning the payment of several different taxes will achieve this, but could well cause confusion.
We do not want to see tax payments based on information reported in quarterly updates as they will very likely be inaccurate and are most unlikely to reflect a ‘real time’ tax payment. The obligation to make any kind of quarterly return will impose yet another administrative burden on small businesses which will cause an unnecessary diversion of time and energy away from the running of the business itself and this is totally unacceptable.
The LITRG response can be found here.