[UK] ACCA calls on HMRC to rethink changes to income tax self-assessment

In the UK, the Association of Chartered Certified Accountants (ACCA) has called on HMRC to rethink planned changes to Income Tax Self-Assessment (ITSA), describing the proposals as “profoundly disconnected from business reality”, The Accountant Online reports.

ACCA produced a response to HMRC’s consultation on introducing more timely ITSA payments. In it, the accountancy body states that the plans do not meet business needs and could impose a fresh administrative burden on companies, HMRC and taxpayers.

ACCA reportedly calls the proposals flawed and unfair, arguing they risk adding further bureaucracy at a time when businesses are already managing complex obligations.

Glenn Collins - ACCA UK Technical and Strategic Engagement head - said, “HMRC’s intention to help taxpayers manage their liabilities more effectively is one we support, but good intentions need workable proposals, and these fall short.

“Given the scale and significance of what is being proposed, we would have expected far greater development of the detail at this stage of the consultation process.”

According to ACCA, its primary concern is what it considers to be a clear gap between HMRC’s proposals and the day-to-day realities of running and growing a small business in the UK.

Under the plans, taxpayers would be required to forecast their income tax liabilities during the year. ACCA reportedly contends that this is inherently difficult for firms whose profits vary, and could be particularly challenging for businesses in agriculture, retail, hospitality and construction.

It warned that poorly designed forecasting rules are likely to lead to both overpayments and underpayments, stating that this would create cash flow problems for the very small businesses the reforms are intended to support. In addition, ACCA is questioning the fairness of the approach.

The proposals distinguish between taxpayers who have employment income and self-employment income and those who don’t. The organisation has challenged both in principle and in practice. 

One of ACCA’s strongest objections is the notion of collecting ITSA via Pay As You Earn (PAYE); it believes this would give employers significantly greater visibility into an employee’s personal financial affairs.

The body has argued that this raises serious concerns about taxpayer confidentiality, which it says have not been properly addressed in the consultation. ACCA has stated that it will continue to engage with HMRC throughout the consultation period, and to press for ITSA reforms that are “proportionate, practical and genuinely supportive” of small businesses and the self-employed.

Source: The Accountant Online

(Quotes via original reporting)

In the UK, the Association of Chartered Certified Accountants (ACCA) has called on HMRC to rethink planned changes to Income Tax Self-Assessment (ITSA), describing the proposals as “profoundly disconnected from business reality”, The Accountant Online reports.

ACCA produced a response to HMRC’s consultation on introducing more timely ITSA payments. In it, the accountancy body states that the plans do not meet business needs and could impose a fresh administrative burden on companies, HMRC and taxpayers.

ACCA reportedly calls the proposals flawed and unfair, arguing they risk adding further bureaucracy at a time when businesses are already managing complex obligations.

Glenn Collins - ACCA UK Technical and Strategic Engagement head - said, “HMRC’s intention to help taxpayers manage their liabilities more effectively is one we support, but good intentions need workable proposals, and these fall short.

“Given the scale and significance of what is being proposed, we would have expected far greater development of the detail at this stage of the consultation process.”

According to ACCA, its primary concern is what it considers to be a clear gap between HMRC’s proposals and the day-to-day realities of running and growing a small business in the UK.

Under the plans, taxpayers would be required to forecast their income tax liabilities during the year. ACCA reportedly contends that this is inherently difficult for firms whose profits vary, and could be particularly challenging for businesses in agriculture, retail, hospitality and construction.

It warned that poorly designed forecasting rules are likely to lead to both overpayments and underpayments, stating that this would create cash flow problems for the very small businesses the reforms are intended to support. In addition, ACCA is questioning the fairness of the approach.

The proposals distinguish between taxpayers who have employment income and self-employment income and those who don’t. The organisation has challenged both in principle and in practice. 

One of ACCA’s strongest objections is the notion of collecting ITSA via Pay As You Earn (PAYE); it believes this would give employers significantly greater visibility into an employee’s personal financial affairs.

The body has argued that this raises serious concerns about taxpayer confidentiality, which it says have not been properly addressed in the consultation. ACCA has stated that it will continue to engage with HMRC throughout the consultation period, and to press for ITSA reforms that are “proportionate, practical and genuinely supportive” of small businesses and the self-employed.

Source: The Accountant Online

(Quotes via original reporting)