ACCA urges HMRC to scale back new reporting demands on small businesses

Summary

The Association of Chartered Certified Accountants has formally urged HMRC and HM Treasury to revise proposals that would expand reporting requirements on payments made by close companies to participators, arguing the draft rules would impose significant compliance burdens on businesses that already meet their tax obligations while doing little to address deliberate non-compliance.

Market Impact

The ACCA's intervention highlights the growing tension between HMRC's ambitions to narrow the small company tax gap and the administrative costs imposed on compliant businesses. If adopted as drafted, the rules would require companies to report transactions that are exempt by type or value and carry no tax liability, creating redundant reporting obligations that overlap with existing iXBRL accounts filed alongside CTSA, ITSA and RTI submissions. This analysis is informational and avoids any directional trading claims.

Why It Matters

It illustrates how professional accounting bodies are pushing back on regulatory scope creep in UK corporate tax reporting, with compliance costs as the central contested variable.

Key Points

• The ACCA called on HMRC and HM Treasury to revise the 'Reporting company payments to participators – modernising the reporting framework' consultation, arguing it would pull in a wide range of exempt transactions that could never generate a tax charge.
• ACCA UK Technical head Glenn Collins said HMRC should have evaluated existing and upcoming reporting obligations before designing new proposals to ensure they are proportionate.
• The ACCA urged HMRC to make fuller use of iXBRL accounts already filed by close companies with CTSA, ITSA and RTI submissions rather than creating a new reporting framework.
• The ACCA asked HMRC to provide clear evidence that the extra data would deliver benefits to the Exchequer exceeding the additional compliance costs imposed on already-compliant businesses.

Key Entities

Evidence

The ACCA acknowledged the government's aim of narrowing the small company tax gap but argued the measures would mainly increase red tape for businesses that already comply, while having little effect on deliberate rul...

Supports: Supports the policy critique.

The body says the draft rules would pull in a wide range of transactions, including many that are exempt by type or value and could never generate a tax charge.

Supports: Supports the over-reach argument.

Instead of introducing the proposed framework, the ACCA is urging HMRC to make fuller use of existing iXBRL accounts filed by all close companies alongside CTSA, ITSA and RTI submissions.

Supports: Supports the ACCA's proposed alternative.