A major industry body has called for the government to take responsibility and assist businesses when it comes to meeting the controversial proposed obligations around tax payments and the HMRC’s ‘Making Tax Digital’ programme.

The Association of Taxation Technicians (ATT) says that if digital record keeping and quarterly profit reporting are made mandatory from April 2018 as HMRC has proposed, many businesses will be forced down an unfamiliar path. The possible repercussions include a heightened risk of cyber crime and significant new costs.

The government’s Making Tax Digital programme centres around its aim for the HMRC to have one of the most digitally-advanced tax administrations in the world by 2020.

The ATT has previously called for a delay to the introduction of the Making Tax Digital programme, claiming the timescale suggested did not allow enough time for a digital transition to be made.

“There are real practical concerns about the security risks and the potential for businesses becoming victims of cyber-crime,” said Yvette Nunn, co-chair of ATT’s Technical Steering Group. “If taxpayers who are running businesses have to use their phones or laptops to keep details of all their business transactions, there is a major risk of data being accessed maliciously. Our experience suggests that many businesses are not sufficiently cyber-savvy. They are unprepared for having to keep their data safe in a digital world.”

Nunn called for more to be done to educate businesses on cyber security.

“As the government is driving the move to mandatory digital record keeping, it must be prepared to invest whatever amount of financial support is required to ensure that taxpayers can reasonably meet those obligations,” Nunn said. “It is important to appreciate that very many taxpayers are fully meeting their tax obligations with the use of manual record keeping systems. For them, the compulsory change to digital record keeping offers no advantage.”

“If quarterly digital reporting were not being introduced on a mandatory basis then there might be the possibility of having a discussion about a reasonable level of financial support. However, where it is effectively being forced upon everyone, we don’t think there is a reasonable level. It will take whatever it needs to take to get everyone on-board and if the government is unable to invest to that extent then it really does need to rethink the mandatory aspect of the MTD proposals.”

Any contractor who manages their own accounts will fall under the bracket of those who may need to file their accounts quarterly if the MTD programme is approved and put in place.