Too taxing

From next month, small businesses with a turnover above £85,000 a year are required to complete their VAT returns digitally. This has been a long time coming, but few knew about it and not many are ready. Indeed, why should they be? Is it necessary?

There is a view in government that attaching the word “digital” to anything makes it progressive, modern and therefore imperative. Yet the move to digital tax returns has been undertaken to satisfy HM Revenue and Customs, not small enterprises, nearly two million of which still file returns manually. This trend to push all government business online has been forced on the country, like it or not. Many of the groups most likely to interact with state agencies, such as the elderly and the vulnerable, do not even use the internet.

Campaign groups and business organisations have been warning the Government that this is the wrong approach and, as the deadline approaches, the vast majority are unprepared. These concerns led the Treasury last October to announce a deferral for some of the more complex organisations, but this was not extended to smaller businesses, for which implementation will be most burdensome.

A parliamentary committee recently criticised the “rushed” timetable following pilot schemes and said there was too little time before April 1 to “make up lost ground and respond to implementation issues identified by taxpayers”.

The Chancellor should suspend the digitalisation programme until the Government has got it right and businesses are ready.