The institute of Chartered Accountants in England and wales (ICAEW) has urged HMRC to rethink the requirement for companies to report quarterly under Making Tax Digital Corporation Tax (MTD for CT).
In its response, to HMRC’s consultation on expanding the Making Tax Digital (MTD) regime to Corporation Tax (CT), ICAEW urges HMRC to reconsider quarterly reporting requirements, at the very least for businesses below the VAT registration threshold and organisations that require a senior accounting officer. The faculty’s response argues that quarterly reports would merely consist of cash in and out transactions. It states; “These reports will tell HMRC very little about the true accounting or tax results of the company for the quarter concerned.”
It suggests that depending on the business size, complexity and processes, making quarterly reports that are a more accurate reflection of the business’s tax results could take significantly longer than the month the government currently proposes for submission of reports.
The institute argued that quarterly reports would merely consist of cash in and out transactions, stating: `These reports will tell HMRC very little about the true accounting or tax results of the company for the quarter concerned. `
It continued: `The additional burden placed on companies in providing quarterly reports is just not justified and should not be introduced until digital record keeping has become established the software available is shown to work efficiently for companies and HMRC.`