Earlier this year I submitted evidence to the House of Lords on HMRC’s Making Tax Digital programme, which they claim simplifies tax for the self employed, landlords and others with income not taxed at source. As I, and many others, pointed out, this stretched the idea of simplification to its limits because instead of having to submit a single tax return a year we then thought the self employed would have to submit five.
It turns out that was wrong because, as reported on AccountingWEB, the actual total is six. There will be four quarterly reports required. Then an adjusting statement to put the quarterly statements on a proper accounting basis will be necessary. And finally a ‘final declaration’ (the new name for the tax return, which has supposedly been abolished) will be required.
To be polite, this is HMRC parting with sanity whilst inducing massive taxpayer backlash. I suspect something akin to a poll tax revolt will eventually arise amongst the six or seven million people likely to be impacted. I also suggest not a penny more in tax will be paid. But GDP will fall because of the amount of additional time spent book-keeping which will directly reduce the contribution of this sector to national income.
But I suspect the friends of small business, otherwise called the Tory Party, will send it through the Commons unchallenged because far too few of them know about the real world which is rarely noted by those whose careers started as parliamentary advisers.