Petition launched to scrap digital tax plans

A petition has been launched to scrap plans to transform the tax system. The new system will see self-employed individuals and small businesses having to update their tax accounts digitally four times a year instead of filing just one return.

The changes were outlined by the HMRC and MP David Gauke last week in an online report, titled “Making Tax Digital”, and described an outline of how the “bold vision” of the transformation of the tax system will be achieved by 2020.

Backlash

Since the plans were unveiled by Chancellor George Osbourne back in November, there has been a backlash from those who will be affected by the new system. Charity Low Incomes Tax Reform Group (LITRG) stated that the new digital system will increase workloads for traders and infringe the rights of those who are unable to use computers, such as the elderly or disabled.

Paul Johnson, who created the petition, said that the new plans will be a burden for self-employed individuals and small businesses.

“Each self-employed individual and small business will have the added burden of additional red tape, accountancy fees and potential for fines … as a small business owner myself I already spend quite some time to get things in order once a year,” he said.

The petition currently has over 83,000 signatures and is set to run until June 2016.

Better outcome

Despite the backlash, accounting specialist FreeAgent said that the tax system is “overdue” for modernisation.

Mr Gauke stated that the new system will provide a better outcome for all parties.

“Better data means fewer mistakes, fewer delays, and a better outcome for all parties…updating HMRC directly in this way will be secure, light-touch and far less burdensome than the tax returns of today,” he said.