Taxation: Electronic Government
The question
To ask the Chancellor of the Exchequer, what assessment he has made of the potential impact of making tax digital’s quarterly reporting of tax returns on accountancy fees and workload for small businesses.
Answered by Treasury
The government has worked with taxpayers, representative bodies and software developers to ensure Making Tax Digital (MTD) for Income Tax works well for businesses of all types and sizes.
Quarterly updates are not full tax returns. They are straightforward summaries of income and expenses drawn from digital records. When records are kept up to date, software can compile the information automatically, making updates quick and easy to submit. Because of their simplicity, many taxpayers will complete them without using an agent.
Quarterly updates encourage timely record keeping, helping to reduce errors, and simplify the end-of-year tax return because the information is already held in the software.
HMRC has published assessments of MTD’s impacts and continues to monitor customer experience as the service is rolled out.
MTD reporting categories are based on existing Self Assessment requirements. They reflect current Income Tax obligations while supporting digital record keeping and updates.
Verbatim has judged this answer against the question that was actually asked — answered, partly answered, or evaded. Sign in to see the verdict →