The government's plans to introduce a digital tax system was initially hailed as a potentially time-saving foray into the world of modern technology when it was announced, but as more details have been released, there have been some reservations over the plans.
Experts believe that the plans for quarterly reporting will place an unnecessary administrative burden on small businesses and one-man-bands, and concerns over the system's implementation have been the motivation behind a five-part consultation process for affected parties.
This was due to take place after the EU referendum, but the Association of Taxation Technicians believe that the whole thing should be delayed for at least a year to avoid all five documents being issued at once. This would make it more likely that the government would be able to achieve its stated test date of April 2017.
A representative from the ATT has called the current schedule 'overly ambitious', noting that the timetable requires responses to all five documents to be submitted before September, providing a worryingly limited time for freelancers to have their say.
This allows a six month time-frame for considering the views and opinions from each consultation, which the ATT believe is not sufficient for HM Revenue and Customs to absorb the input that they are likely to receive from the thousands of affected parties across the UK.
Failing to allow sufficient time to plan and design the system will have a negative effect on the department's ability to complete the system in time for the launch, not to mention the additional elements which will be needed to ensure that those who need assistance will be able to comply.
Given that the new system will require 82 per cent of small business owners to change the way they keep their tax and business records, according to a survey by the Institute of Chartered Accountants in England and Wales, a user-friendly system will be an absolute must.
The digitisation is likely to be the biggest change to the tax system since the introduction of the PAYE system in 1945, so any attempt to rush into it without allowing time for proper planning, consultation and testing could be disastrous, both for the system's users and for HMRC.
With £1.3 billion of taxpayers' money being allocated to the project, the consequences for failing to produce a workable system could be huge and cause significant loss of faith in HMRC and the government's ability to undertake projects on this scale effectively.
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