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Feedback: 6 January 2022

04 January 2022
Issue: 4822 / Categories: Forum & Feedback

Readers’ correspondence.

Making tax digital

Two items have caught my eye in relation to ‘the driving forces’ behind making tax digital (MTD) and the apparent lack of concern for business and individual taxpayers as to the additional costs that are going to be imposed on them during a time when they are entering a period of rebuilding their businesses and lives.

Recently, I received as agent for two clients – an individual and a small company – copies of a letter from HMRC with the code MTD34b headed ‘it’s time to start thinking about making tax digital’. It is possible that people might be thinking about the latest Covid 19 variant but MTD – I think not.

I assume that both the Treasury and HMRC have had a hand in the production of this letter and I also assume that those two bodies consider that this MTD project will benefit all parties. Sadly I do not share their confidence and just repeat my concerns as to the additional costs to be borne by the private business sector and individual taxpayers.

Another item that caught my attention was a report in the Daily Mail (26 November) on a case relating to Covid loan fraud in the Manchester Crown Court. Two points in that article need to be emphasised. In relation to the now closed bounce back loan scheme, of the nearly £48bn of borrowings approved under the scheme, no less than £26bn of that will be lost to fraudsters and borrowers who cannot repay according to the public accounts watchdog, the National Audit Office. It is further stated in the article that everyone including the chancellor Rishi Sunak, the architect of the Covid loan schemes, was fully aware of the risk of fraud.

The second point refers to ‘a bombshell revelation at the weekend’ by Jim Harra chief executive of HMRC who admitted tax authorities will only recoup less than half of the £5.8bn paid out in error or fraud under these initiatives.

The conclusion surely must be that before MTD is imposed on the population as proposed, the whole project should be taken out of the hands of the existing stakeholders – the Treasury and HMRC – until a full review as to the costs and benefits of MTD has been conducted by the National Audit Office.

Robin Summers.

Research and development

In the research and development (R&D) section in his tax administration and maintenance announcements article ‘Hear ye, hear ye’ (Taxation, 9 December 2021, page 8), Andrew mentioned that ‘notification will have to be given to HMRC before a project is started’. There was quite a lot of discussion on this at the R&D consultative committee meeting I attended on 8 December, with HMRC seeming to suggest early in the meeting that the notification would be required before the start of the accounting period. However, it seems HMRC eventually settled on advising that in its mind it would be before a claim is made, and probably before the end of the accounting period in which the R&D project was started. All of this is still to be decided, since the consultation on this measure runs until 8 February.

Jenny Tragner, ForrestBrown.

Non-resident gains on UK property

I was reading the replies to ‘Temporary posting’ (Readers’ forum, 9 December, page 26) and it seemed to me – although I may have misunderstood – that the properties had been sold before any liquidation distribution was made.

In these circumstances, the shares do not derive their value from UK property at the time of the disposal and so there is no tax for a non-resident (subject to the temporary non-residence rules).

A Taxation reader.

Issue: 4822 / Categories: Forum & Feedback
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