COMMONS

Correspondence on Making Tax Digital published

27 March 2017

Rt Hon. Andrew Tyrie MP, Chairman of the Treasury Committee, has received replies from Jane Ellison MP, Financial Secretary to the Treasury, and Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), on the compliance cost of Making Tax Digital.

Chair's Comments

"There are huge differences between the FSB and HMRC about the administrative burden of Making Tax Digital. This is the heart of the matter. The FSB think that with MTD, businesses might spend three times as much time on their tax obligations as they currently do. This could cost them around £3,000 a year in time, salaries and accountants' fees. HMRC think that they will spend less time, leading to a small net saving. A comprehensive pilot should shed some light on which assumption is closer to reality.

This serves to illustrate the need for the implementation of one of the Committee's recommendations that a comprehensive pilot is needed to establish the facts, and before mandatory roll out of the digital regime. I have written to the Administrative Burdens Advisory Board to ask for a view on the basis of their members' extensive business and accountancy practice networks." 

Further information

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