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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