The Chairman of the House of Commons Treasury Committee has written an open letter to David Gauke, the Financial Secretary to the Treasury, raising concerns about the implementation costs for businesses of the Making Tax Digital proposals.
In his letter, he notes that HMRC will require businesses to do all their record keeping digitally. This had been taken to mean that businesses could choose their own software which could include spreadsheet packages such as Excel.
It has now become apparent that HMRC will require businesses to use particular software and an ICAEW survey has revealed that 75% of all businesses and 82% of sole traders will have to change their record keeping systems to comply with the government proposals.
In light of this, the Chairman suggests that it is implausable that Making Tax Digital would generate large tax savings to businesses, and he recommends that a thorough impact assessment is undertaken before making digital record keeping compulsory.
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