In The News
On 12 November 2020, HMRC published a consultation concerning the introduction of MTD in relation to Corporation Tax.
For those of you who wish to read the consultation document and even go so far as to take part in the consultation, the link is noted below.
For those of you who would be more content with a summary, I have taken the liberty to look over the document and offer a commentary below;
Technology makes administrative matters much more orderly and precise and therefore these proposals make considerable sense without imposing too much of a burden upon the taxpayer companies.
The only concern to be aware of is that once quarterly summaries / updates become embedded into a well-oiled system of tax compliance, the easy and next step will be to advance payment of tax within the quarterly regime as applies to large companies under the QIP’s regime.
We can understand the need to make VAT and PAYE subject to real time processes; in the former, the tax belongs to HMRc with the taxpayer company merely an agent collector and in the latter the tax is money withheld from employees where the company has a duty to pass on the employee’s payment.
Corporation Tax is a tax on profits and so whilst MTD will simplify the data collection and compliance duty, it is to be hoped that tax payments will not be accelerated for small and medium sized enterprises as the very essence of their business, cash management, will be significantly altered.
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