Tyrie Still Doesn't Believe The HMRC MTD Hype

In February I wrote:

"Treasury Committee chairman Andrew Tyrie has written to the financial secretary to the treasury, Jane Ellison, requesting further detail on HMRC’s claim that the Making Tax Digital programme will cost only £280 per UK company to set up."

Yesterday the Treasury Sub Committee reported that Tyrie 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.

• National Chairman of the Federation of Small Businesses (FSB) writes to Treasury Committee Chair, dated 8 February 2017 ( PDF 92 KB)
• Jane Ellison MP, Financial Secretary to the Treasury writes to Chair of the Treasury Committee regarding Making Tax Digital for Business, dated 21 March 2017 ( PDF 215 KB)
• Treasury Committee Chair writes to Ms Teresa Graham regarding Making Tax Digital for Business, dated 23 March 2017 ( PDF 407 KB)
• Updated Impact Assessment on Making Tax Digital for Business, from HMRC ( PDF 433 KB)
• Inquiry: UK tax policy and the tax base inquiry
• Treasury Committee

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."

In other words, Tyrie still doesn't believe the MTD hype!

Oh, and with good reason. As Kevin Reed notes:

@ken_frost 2/2 .. In the released documents KPMG undertook part of the research for HMRC, as a small biz tax adviser.... pic.twitter.com/eKKzNvrtzn

— Kevin Reed (@Goonerreed) March 27, 2017

As an ex KPMG person myself, I don't call into question KPMG's professionalism. However, "small" to them may not cover all genuinely "small" businesses!

Tax does have to be taxing.

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Tyrie Castigates HMRC's "Fairness"

Andrew Tyrie, chair of the Treasury select committee, is not happy with how HMRC treats film investors and has written a letter to the Chancellor about it.

The FT reports that Tyrie said that “very severe financial distress” had been inflicted by the crackdown on schemes exploiting film industry tax breaks:

“If a tax avoidance scheme is found by the courts to be illegal, then investors in the scheme have no option but to repay the tax that they have avoided. 

But HMRC needs to treat people fairly, including investors in what are now considered to be tax avoidance schemes, and to be transparent and timely in their approach....

This sorry story is a clear example of how tax reliefs aimed at achieving a specific policy objective — in this case to boost the UK film industry — can result in unacceptable complexity in the tax system providing scope for confusion and also some abuse. The result is that for many years HMRC have been involved in a long-running legal battle against avoidance schemes."

However, fear not, HMRC says that everything is fair:

“We have worked hard to tackle abuse in the system on behalf of the vast majority of investors who play by the rules, ensuring they are enforced fairly and with sensitivity.”

Nothing to see here!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Tyrie Doesn't Believe The MTD Hype

Treasury Committee chairman Andrew Tyrie has written to the financial secretary to the treasury, Jane Ellison, requesting further detail on HMRC’s claim that the Making Tax Digital programme will cost only £280 per UK company to set up.

During the committee’s recent inquiry into the project, the Federation of Small Businesses (FSB) said the true cost would be significantly higher – as much as £2,770 per business per year.

Given this gap in estimates, Tyrie (quite rightly) is calling for clarification from both HMRC and the FSB. Tyrie has also written to FSB chairman Mike Cherry asking for the details behind that figure.

Tyrie is quoted by Computer Weekly:

“The compliance cost estimates are so far apart that at least one of them must be wrong. I have written to both the HM Treasury and the Federation of Small Businesses to ask for detailed supporting methodology for their estimates.

If the FSB is right, the effects of Making Tax Digital would be crippling for many small businesses. If the government is right, businesses have something to gain in the longer term and one would expect them to be queueing up to join the pilot.”

I suspect that the FSB figure is closer to the mark, what say you?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"