Government plans to force millions of small businesses to make online quarterly updates to the taxman from April next year are far too rushed and could put some firms in danger of closure.
The warning has come from regional accountancy firm Bishop Fleming, which has its largest office in Bristol.
It claims the government’s “unseemly rush” to launch its Making Tax Digital scheme is putting businesses at risk.
Under the proposals, businesses along with landlords with an annual turnover of at least £10,000 will have to e-file updates of their accounts to the tax office four times a year starting.
A report from MPs on the Treasury Select Committee called for a delay of at least one or two years before the planned digitisation of the tax system takes place – a conclusion Bishop Fleming agrees.
Its head of tax Andrew Browne, pictured, said: “Tax digitalisation should be delayed until at least 2019 – and preferably later – until we have the results of a wide-ranging pilot scheme that has identified issues that will need to be addressed.
“The Select Committee clearly believes, and I agree, that small businesses will not be ready by the April 2018 implementation date. The MPs have raised some very serious and pertinent questions which the government needs to answer; I will be interested to see its reply.”
Mr Browne said there was currently no sight of the promised free software for businesses to make their submissions, so the actual mechanics of making the submissions were not yet in place.
“I am also concerned that the costs for small businesses in complying with the project will be far more substantial than the government has so far admitted,” he added.
“The £10,000 threshold for being forced onto the scheme is also far too low. The Select Committee’s call for it to be raised to the VAT threshold of £83,000 clearly makes a lot of sense; I have seen no evidence that it should be less than that.”
Bishop Fleming’s Bristol office is one of seven across the South West and Midlands.
