Archive for December, 2016

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AQA

December 7, 2016

The Parliamentary Question is an arcane art: for the person asking, the art is to phrase the question as widely as possible so as to “fish” for at least some of the facts you might want to know.  For the person answering, it is to give the minimum amount of information compatible with not actually lying in the person’s face.

Why?  Why not just ask what you want to know and then answer the bloody question?

Here’s an illuminating exchange from the 5th December Small Business debate in the Lords, from Hansard, via the indispensable “they work for you” site:

Lord Vinson (Conservative)
To ask Her Majesty’s Government, in the light of the fact that most small businesses assess their profits annually in arrears, whether it is the intention of HM Revenue and Customs to make small businesses report their income and expenditure quarterly; and what assessment they have made of the feasibility of this requirement. (HL Deb, 5 December 2016, cW)

In other words, MTD, can it be done?

Lord Young of Cookham Lord in Waiting (HM Household) (Whip)
HM Revenue and Customs published a consultation document setting out the Government’s proposals on 15 August 2015 entitled “Making Tax Digital: Bringing business tax into the digital age”. The consultation included an initial assessment of the impacts on businesses. The consultation closed on 7 November. The government is currently considering the responses to the Making Tax Digital consultations and will publish its response and draft legislation in January, together with an updated Tax Impact Assessment.

In other words, we’ve done an initial impact assessment and we’ll refine it in January.

Let’s turn to that impact assessment, shall we?

Look at para 8.6 on page 60, for example:

…We recognise that many businesses will incur costs, including time costs in making the transition to a digital way of transacting with HMRC.  However we do not yet have a granular understanding of what those costs will be to provide an estimate at this time.

An impact assessment is about costs, not about feasibility.  The tax impact assessment process is about three costs: the cost or gain to the exchequer (i.e. the increase or reduction in tax due as a result of a change to the system), the cost or savings to the taxpayer (the administrative burden, in terms of the standard cost model – a very precise measurement of the average cost to the averagely competent business, but not a particularly robust or realistic assessment of the actual costs to an actual business) and, thirdly, the costs or savings to HMRC.  The question Lord Vinson asked was, I think, whether businesses would be ABLE to operate MTD.  The question Lord Young answered appears to have been an entirely different one.

Posted in HMRC, MTD (Making Tax Digital) | Leave a Comment »

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Worst of all possible worlds

December 6, 2016

You will no doubt remember the six (seven, if you include the summary) consultations on the ambitious “Making Tax Digital” proposals, which closed on 7 November.  At the Autumn Statement there was nothing in the actual speech, but, buried deep in the documentation, there was a statement that the government would be issuing a consultation response in January.

This sounded hopeful, because – if MTD is to be mandatory from 2017 or 18 – then the legislation needs to go into the 2017 Finance Bill and the draft clauses for that were published today, 5th December.

But look what it says here, in OLD (The Overview of Legislation in Draft) at the end of paragraph 6.1:

To ensure that the views of respondents to the consultations are fully considered, the government will publish its response to all 6 consultations, together with draft Finance Bill 2017 legislation in January 2017.  [my emphasis]

So not only is there an absurdly short timescale for the government to consider the multiple responses it is “pleased” to have received on MTD, but it plans to bring forward the legislation, or at least some legislation, anyway, except it will be out a month later than all the rest, shortening the time available for that to be scrutinised.

Poor show all round, I say.

Posted in Bit of politics, Consultation, MTD (Making Tax Digital) | Leave a Comment »

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Good news

December 2, 2016

You couldn’t make it up.  A small band of angry women, about to lose their small businesses because of a piece of legislation that they knew nothing about till it was right in their face, angry that the legislation had been made by people who knew nothing about them and hadn’t done the due diligence to find out they even existed, take on the might of HMRC and the EU tax authorities…

… and win!  Yes, the VATMOSS campaign has won its objective of having a sensible threshold to protect small businesses and allow them to grow.  Here’s the press release from the EU yesterday:

To simplify VAT rules for startups and micro-businesses selling online, VAT on cross-border sales under €10,000 will be handled domestically. SMEs will benefit from simpler procedures for cross-border sales of up to €100,000 to make life easier;

The full proposal is here, and there’s a rather good impact assessment here.  Let’s just take a moment to sit back, pop a bottle of our favourite beverage and, well, rejoice!

Now… it’s only a proposal at present, not settled legislation.  So the usual advice is to lobby your MP, your MEP and anyone else you can think of, in order to get it through ECOFIN and into practice.

Question: will the Brexit brouhaha make a lobbying effort from the UK more, or less, likely to succeed???

 

Posted in Bit of politics, VAT, VATMOSS | 1 Comment »