Making Tax Digital
Discussion
Welshbeef said:
GT03ROB said:
Welshbeef said:
GT03ROB said:
Thank god I intend staying non-res for the foreseeable future. It's all going to end in tears.
Can I ask what effectivie marginal rate you pay to the UK govt being in that status?Is that fair?
Eric Mc said:
I have no doubt this is going to happen at some point in the future.
But having a system that can handle all the data accurately for 40 million taxpayers up and running and fully functioning on 1 April 2018 is overly optimistic
The technology side will be the easy bit - much of it is already in place or can be developed in 12 months. The difficulty will be getting everyone to adopt it in time.But having a system that can handle all the data accurately for 40 million taxpayers up and running and fully functioning on 1 April 2018 is overly optimistic
Ken Figenus said:
OMG - I tick many in your list Eric - its all small scale but the thought of not being able to do business as I'm too busy administrating the business for HMRC's slice is heartbreaking.
I wonder if there will be a way of digitising the income/business expenditure side? Its all a bit prehistoric now, involving paper - at my level at least... To be able to assign income and expenditure in a form that is shared with my accountant would be useful. Maybe just a box to tick to assign as letting / business 1/ business 2 etc Maybe this even exists already?
On top of this is that they are effectively doing away with Flat Rate VAT for many small service businesses and will have to do full on VAT returns. More admin heaven. Entrepreneurs thrive on it
Have a chat with your accountant, they may already be using cloud apps with other clients that would suit you too.I wonder if there will be a way of digitising the income/business expenditure side? Its all a bit prehistoric now, involving paper - at my level at least... To be able to assign income and expenditure in a form that is shared with my accountant would be useful. Maybe just a box to tick to assign as letting / business 1/ business 2 etc Maybe this even exists already?
On top of this is that they are effectively doing away with Flat Rate VAT for many small service businesses and will have to do full on VAT returns. More admin heaven. Entrepreneurs thrive on it
For example, there are add ins that allow you to scan invoices/receipts with your phone and automatically upload them. The app can recommend an allocation and even learn to allocate common purchases automatically. Do this while walking back to your car and you've updated your accounts already.
There are also add-ins specifically designed for landlords that can aid complete management of the properties - tenancy agreements, mortgages, utilities, certificates and all sorts of reminders - as well as the accounting. They can be linked to your bank accounts and identify rent payments from tenants and warn you when a payment is missed.
Eric Mc said:
Having to diligently record all your rental income and expenditure (and tax related claims) on an effectively daily basis is going to be a massive culture shock for many landlords.
A perhaps overdue change considering far too many small landlords fail to declare their rental incomes. 
Do you really think that unethical landlords who fail to declare their rental income will suddenly have a change of heart and start declaring their income just because HMRC have made it HARDER for them to declare it?
Crooks break the rules - whatever those rules are. Making more rules doesn't suddenly make dishonest people honest.
There seems to be a fundamental lack of understanding of human nature at HMRC.
Crooks break the rules - whatever those rules are. Making more rules doesn't suddenly make dishonest people honest.
There seems to be a fundamental lack of understanding of human nature at HMRC.
Eric Mc said:
Do you really think that unethical landlords who fail to declare their rental income will suddenly have a change of heart and start declaring their income just because HMRC have made it HARDER for them to declare it?
Crooks break the rules - whatever those rules are. Making more rules doesn't suddenly make dishonest people honest.
There seems to be a fundamental lack of understanding of human nature at HMRC.
I think the point is that the data will be able to identify non-declaration patterns, particularly by spotting the gap between expenditure data from Banks and tax data at the HMRC.Crooks break the rules - whatever those rules are. Making more rules doesn't suddenly make dishonest people honest.
There seems to be a fundamental lack of understanding of human nature at HMRC.
loafer123 said:
Eric Mc said:
Do you really think that unethical landlords who fail to declare their rental income will suddenly have a change of heart and start declaring their income just because HMRC have made it HARDER for them to declare it?
Crooks break the rules - whatever those rules are. Making more rules doesn't suddenly make dishonest people honest.
There seems to be a fundamental lack of understanding of human nature at HMRC.
I think the point is that the data will be able to identify non-declaration patterns, particularly by spotting the gap between expenditure data from Banks and tax data at the HMRC.Crooks break the rules - whatever those rules are. Making more rules doesn't suddenly make dishonest people honest.
There seems to be a fundamental lack of understanding of human nature at HMRC.
It's a flawed concept created by flawed logic and a deep misunderstanding as to what actually makes people tick.
Eric Mc said:
And you can see what this will encourage - the growth of the "cash in hand" economy - PRECISELY what HMRC originally said that this system was all about stopping
It's a flawed concept created by flawed logic and a deep misunderstanding as to what actually makes people tick.
Which is why they are gradually removing the availability of large denomination Bank notes...It's a flawed concept created by flawed logic and a deep misunderstanding as to what actually makes people tick.
anonymous said:
[redacted]
Everyday is a school day on PH - thanks for the link!on another note this thread is a real heads up for me as a small limited company which I run mainly to give me something to do and a small annual turnover. I always make a profit and pay tax but I can see it becoming more hassle to keep it going in the not too distant future. With the changes to dividend taxation too it really is becoming less worthwhile keeping it going.
I posted up this thread precisely because HMRC are not making any real effort to get this information out into the wider community - precisely where it needs to be. It's all well and good them seeking opinions of accountants and tax consultants. They need to be shouting this from the rooftops and REALLY alerting the public as to what their plans are.
The mainstream media should be all over this. To me, this is as significant if not even more significant than Brexit or Trump, both of which are total dominating the headlines at the moment. The ONLY mainstream media outlet that is providing any information at this at all is BBC Radio 4.
I sometimes wonder if this country sleepwalking into a totalitarionist state.
The mainstream media should be all over this. To me, this is as significant if not even more significant than Brexit or Trump, both of which are total dominating the headlines at the moment. The ONLY mainstream media outlet that is providing any information at this at all is BBC Radio 4.
I sometimes wonder if this country sleepwalking into a totalitarionist state.
anonymous said:
[redacted]
Yep, HMRC have been using it for over a decade now.The ambition for taxpayers with simpler affairs is for their personal tax accounts to be pre-populated with data that HMRC already has access to - be that PAYE, benefits, pensions, bank/BS interest or dividends to name a few types. Particularly relevant are plans for letting agents supply details of rental income and expenses of their landlord clients.
Those landlords who don't use letting agents can be identified by the Connect system using data from land registry, mortgage providers and SDLT forms. Personalised prompts and nudges can be placed on the taxpayer's personal tax account asking if they need to declare rental income for specific property.
Eric Mc said:
And you can see what this will encourage - the growth of the "cash in hand" economy - PRECISELY what HMRC originally said that this system was all about stopping
It's a flawed concept created by flawed logic and a deep misunderstanding as to what actually makes people tick.
I think you have a point Eric. I slept very soundly at night during an investigation a few years ago as I knew I hadnt done anything iffy - well maybe a Tuxedo for the Baftas as 'work-wear'; but other than that It's a flawed concept created by flawed logic and a deep misunderstanding as to what actually makes people tick.
. So it only cost me a couple of hundred quid due to minor exaggerations the accountant purposefully made - he is is eating Porridge now though! It was a well publicised case that affected thousands. Pay your fair dues (but as little as possible) and sleep soundly! I'll catch up with my accountant re software I think, but nothing with a monthly 'over a barrel' sub appeals.
Eric Mc said:
And you can see what this will encourage - the growth of the "cash in hand" economy - PRECISELY what HMRC originally said that this system was all about stopping
It's a flawed concept created by flawed logic and a deep misunderstanding as to what actually makes people tick.
A few counters to that are:It's a flawed concept created by flawed logic and a deep misunderstanding as to what actually makes people tick.
1. Customers increasingly want to use non-cash payment methods (just 4% of businesses accept cash payments only according to a recent survey). This applies to their own family members too.
2. AML/KYC regulations make it increasingly difficult to move large amounts of cash from the hidden economy into the legitimate economy unrecorded.
3. Operating in the hidden economy leaves a recognisable hole when you consider just often most people make non-cash payments.
HMRC have increasing access to tremendous amounts of data and the power to request further data. Information from DVLA, Land Registry, eBay, airlines, mobile phone companies, Sky TV, Legal Aid Board and dozens of other sources enable them to carry out "lifestyle profiling". If your tax return isn't in keeping with your lifestyle, you can expect Tax Inspectors to be taking a closer look at your affairs.
ninja-lewis said:
A
HMRC have increasing access to tremendous amounts of data and the power to request further data. Information from DVLA, Land Registry, eBay, airlines, mobile phone companies, Sky TV, Legal Aid Board and dozens of other sources enable them to carry out "lifestyle profiling". If your tax return isn't in keeping with your lifestyle, you can expect Tax Inspectors to be taking a closer look at your affairs.
You say that as if it is a good thing.HMRC have increasing access to tremendous amounts of data and the power to request further data. Information from DVLA, Land Registry, eBay, airlines, mobile phone companies, Sky TV, Legal Aid Board and dozens of other sources enable them to carry out "lifestyle profiling". If your tax return isn't in keeping with your lifestyle, you can expect Tax Inspectors to be taking a closer look at your affairs.
Why should they?
Why are we allowing it?
Eric Mc said:
I posted up this thread precisely because HMRC are not making any real effort to get this information out into the wider community - precisely where it needs to be. It's all well and good them seeking opinions of accountants and tax consultants. They need to be shouting this from the rooftops and REALLY alerting the public as to what their plans are.
HMRC can, will and indeed do what they want.And their catch all is that it's down to the tax payer to know what they should be paying/doing. So it'll be fine central if they go this route.
There's still a chance it'll be put back or maybe even shelved (e.g. http://www.contractoruk.com/news/0012856calls_moun...
Part of me can actually see some benefit in it, and that with some in society being able to use full lifestyle profiling and access to financial comings and goings would be hugely positive. Trouble is, this won't be used against the "few" who it needs using against.
That is the big issue. The many suffer because the few misbehave.
Government works when there is trust between the state and the citizen. If that trust is destroyed, the system falls apart.
The Treasury Select Committee has specifically stated that this is a major worry about these proposals.
I am still very surprised that HMRC has so far failed to make their promised January statement on MTD. They have 48 hours now to make that statement. If they don't do this, the legislation required to enact these proposals will not be allowed into the 2017 Budget.
Government works when there is trust between the state and the citizen. If that trust is destroyed, the system falls apart.
The Treasury Select Committee has specifically stated that this is a major worry about these proposals.
I am still very surprised that HMRC has so far failed to make their promised January statement on MTD. They have 48 hours now to make that statement. If they don't do this, the legislation required to enact these proposals will not be allowed into the 2017 Budget.
As I said yesterday - something is going on at HMRC. This is from the Accounting Web site -
"Word has reached AccountingWEB through a couple of independent sources that the planned Making Tax Digital software vendor meeting this morning has been cancelled.
HMRC was expected to update the software community in this meeting with the summary of responses to the six Making Tax Digital consultations. HMRC postponed the conference call Friday afternoon, without announcing a new date.
The government announced in the Autumn Statement that HMRC will publish its MTD response in January. What this means for MTD and the planned rollout is anyone’s guess? Stay tuned to AccountingWEB for all the latest news on Making Tax Digital".
"Word has reached AccountingWEB through a couple of independent sources that the planned Making Tax Digital software vendor meeting this morning has been cancelled.
HMRC was expected to update the software community in this meeting with the summary of responses to the six Making Tax Digital consultations. HMRC postponed the conference call Friday afternoon, without announcing a new date.
The government announced in the Autumn Statement that HMRC will publish its MTD response in January. What this means for MTD and the planned rollout is anyone’s guess? Stay tuned to AccountingWEB for all the latest news on Making Tax Digital".
My money would be on it being deferred. There seems to be growing concern/dissent inside the government about it (and rightly so).
And for those with simple affairs, I would think the aim is to make the process simple. (Yes, yes, since when have governments been able to implement simple stuff!).
I really do wish, however, that HMRC would work on simplifying the tax code. That, to me, is the best way to tackle people playing fast and loose and to make the whole system more efficient.
Eric Mc said:
That is the big issue. The many suffer because the few misbehave....
This is where I'm torn...the many aren't really going to be disadvantaged though, are they? If everything's above board with their affairs, they won't be getting charged any more (or less) than they were being.And for those with simple affairs, I would think the aim is to make the process simple. (Yes, yes, since when have governments been able to implement simple stuff!).
I really do wish, however, that HMRC would work on simplifying the tax code. That, to me, is the best way to tackle people playing fast and loose and to make the whole system more efficient.
NONE of this should be happening without a serious concerted effort to simplify tax which, alas, I do not see happening any time soon.
John Whiting has been chairing the Office of Tax Simplification since 2007. Since the OTS was set up, the UK tax code has doubled in size. So that hasn't worked very well. He's stepping down soon. I bet he thinks that was all a waste of time.
Placing the massive burden of tax compliance (which require knowledge and understanding) onto ordinary, untrained, citizens is downright deceitful and unfair and should be opposed.
John Whiting has been chairing the Office of Tax Simplification since 2007. Since the OTS was set up, the UK tax code has doubled in size. So that hasn't worked very well. He's stepping down soon. I bet he thinks that was all a waste of time.
Placing the massive burden of tax compliance (which require knowledge and understanding) onto ordinary, untrained, citizens is downright deceitful and unfair and should be opposed.
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