“In the longer term and from a cashflow management perspective, it may better suit businesses to pay tax on an ongoing basis rather than being faced with having to finance a large bill once or twice a year,” he said.
“If the government does go down this route a key issue will therefore be a transition mechanism that does not cause severe cash flow problems for taxpayers as they go through the change.”
A quiet ‘Tax Day’
Over 30 consultations were issued on Tax Day (March 23) but many in the industry have been surprised by what the government has chosen not to consult on.
Reforming payment of taxes, and making them timelier, might help alleviate some current pressures in the tax gap but there are concerns as to why the government is taking this route.
“It is disappointing that underlying simplification of the tax rules, to make it easier for taxpayers to understand their liability, is not being considered before digitalisation and earlier payment,” said Caroline Miskin, manager of tax practitioner support at the ICAEW’s Tax Faculty.
“HMRC is currently failing to provide an adequate level of customer service and increasing the number of touchpoints between taxpayers, agents and HMRC is only likely to add further pressure, even if more contact moves online.”
Jon Yarker is a freelance reporter for FTAdviser
