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9am Lowdown: Treasury select committee hears of MTD burden

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26th Oct 2016
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Good morning and welcome to Wednesday’s 9am Lowdown. The Practice Excellence Live webinars continue with today’s offering focusing on Tax.

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Treasury select committee hears of MTD burden

The Treasury select committee heard yesterday the burden Making Tax Digital will inflict on small businesses and accountants yesterday, reports the Telegraph.

Frank Askew, ICAEW’s head of tax, added his concerns. “We as professional bodies want to support the road to digitisation... but the way at the moment it’s being framed, the terms of the consultation mean it’s very difficult for our members to give their support.”

Rebecca Benneyworth told the select committee chairman Andrew Tyrie how accountants are hiring trainers to help their clients with computer skills.

While, Mike Cherry, head of the federation of small businesses, criticised HMRC’s advertising efforts because “small businesses are certainly not aware this coming down the track” and suggested 2025 as a viable timeline for delivery once software and processes are bedded in.

“The idea that you’re bringing it in for sole traders and landlords in the first tranche before testing it properly, before bringing it in starting with large businesses... I think we are going about this in the completely wrong way,” said Cherry.

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PwC finds 15 stores close a day on the high street

A rate of 15 stores closed on the high street in the first six months of 2016, research from PwC has found.

In further bad news for retailers, the number of new shops opening has fallen. But while the high street struggles, the advance of online shopping is “booming” with many of the name brand retailers, such as Carphone Warehouse and Lloyds pharmacy, have seen growth in their click and collect services between 2015-2016.

Madeleine Tomson, PwC’s retail and consumer leader, is optimistic about the high street’s future. “Despite the uncertainty and fall in number of store openings, consumer sentiment has rebounded following the post-EU referendum dip. With employment levels still high and price inflation yet to hit the shops, the majority of the UK public believe they will be better off in 12 months.”

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16% of jobs automated by 2030

Deloitte has revealed that 16% of all UK jobs could be automated by 2030, with new technology reducing £17m in public sector wage costs by 2030.

The Big Four firm believes technological advances will lead to “repetitive and predictable tasks” being undertaken by software or devices.

But Mike Turley, global head of public sector at Deloitte, doubts this will lead to public sector job loss. He said: “For many roles, particularly those requiring a high degree of cognitive skill, automation is likely to complement roles rather than replace them.”

 

Replies (5)

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Tornado
By Tornado
26th Oct 2016 10:06

"but the way at the moment it’s being framed, the terms of the consultation mean it’s very difficult for our members to give their support.”

Although I appreciated that there are many who will not find the proposals such a burden due to the structure of their businesses and the type of clients they have, I cannot and will not support this project in its present format as there are aspects to it which are simply impossible to comply with.

I am sure that I am not alone in this view.

Thanks (4)
By SteveHa
26th Oct 2016 10:48

@Tornado

Your views are clear, and I agree. However, venting on AW is not the way to get anything done. It takes time and effort, but responding to the consultations is likely to achieve much more.

I've sent my responses to two of the consultations, and will get at least another two in before the deadline.

Thanks (3)
Replying to SteveHa:
Tornado
By Tornado
26th Oct 2016 11:43

As can be seen in my other posts on AWEB, I have written comprehensive emails to Andrew Tyrie and my MP (and linked them to the discussions on AWEB) and hopefully my comments were with Mr Tyrie at the Select Committee hearing yesterday.

In the end I decided not to take part in the consultation process as I see this as just a box ticking exercise to show that the people have been consulted. The outcome is predictable such as the £10,000 limit which is so ridiculously low that it is 100% going to be changed so that it can be said that 'we listened and acted on the consultation results'. I have met too many double glazing salesmen in my time to be fooled by such tricks.

I see the consultation as merely the symptom of the disease when it is the disease itself that needs to be dealt with. The consultation is like saying that you are definitely going to be beaten up but you have a choice about which limbs you want to have broken. You need to deal with the reason why you are going to be beaten up first in order to get the best result.

At last there is a wider realisation of the implications of the MTD proposals themselves (the disease) and tackling this directly is what is required. I am now pretty sure that MTD will not proceed as proposed and the comments of the witnesses (as reported above) are fair and reasonable and getting this particular disease under control and turning it into a benefit is looking much more likely now.

Age brings wisdom -

http://www.telegraph.co.uk/news/newstopics/howaboutthat/8833800/Age-brin...

Thanks (5)
Replying to Tornado:
avatar
By njpandya
26th Oct 2016 12:57

Hail to Tornado - You nailed it Sir & my humble respect to your age & wisdom. HMRC are bulldozing genuine concerns & someone needs to tell HMRC, UK is still a democratic country & process work in democracy & not by communist way.

Thanks (2)
Tornado
By Tornado
27th Oct 2016 00:12

I did take the time to watch the Select Committee Hearing and at the length of a feature film full of action to keep you on the edge of your seat, I must award it five stars for entertainment.

With hardly a single word in favour of the current proposals for implementation of MTD, most of the comments by the four main witnesses mirrored much of the comments that have been made on AWEB and Chairman Andrew Tyrie did not seem too impressed with the way HMRC are dealing with this.

Summing up he said (words to the effect) -

a) He wants to see a fully costed Compliance Impact Assessment to help Parliament make a decision on this project.

b) Pilot testing of the system needs to be carried out first and he did remark that he could not understand the Government resistance to this

c) If there is a decision to go ahead with the project then it needs to be introduced slowly over a period of time.

It remains to be seen what finally results from this hearing but my bet is on a substantial delay in the commencement of the project and radical changes to the proposals.

The full hearing can be found here -

hearingshttp://www.parliamentlive.tv/Event/Index/4d8d7057-d422-47af-902d-03dcc42...

If you are wondering what to do about preparing for MTD, my suggestion is that you delay making any decisions yet, particularly about committing your clients to software contacts as they will not be too pleased if it turns out not to be necessary to do this.

Thanks (6)