Making Tax Digital
Discussion
From their own online blurb...
"The digital tax account will show PAYE taxpayers how much tax
they will pay via their employer. Even those with complex tax
affairs will be able to tell HMRC about additional income online
and have it reflected in their digital tax account.
Individuals and small businesses will have the option to ‘pay as
you go’ to help manage their cash flow, so they won’t be faced
with a one-off bill many months down the line. Instead of making
a number of payments across different taxes, they will be able to
make just one. It will feel like paying a single tax."
So, from what i understand, there will be an option, rather than necessity to pay quarterly.
And it gives individuals access to see how much tax they pay via their employer.
Now, i am far from being a tax guru, so i must be missing something?
"The digital tax account will show PAYE taxpayers how much tax
they will pay via their employer. Even those with complex tax
affairs will be able to tell HMRC about additional income online
and have it reflected in their digital tax account.
Individuals and small businesses will have the option to ‘pay as
you go’ to help manage their cash flow, so they won’t be faced
with a one-off bill many months down the line. Instead of making
a number of payments across different taxes, they will be able to
make just one. It will feel like paying a single tax."
So, from what i understand, there will be an option, rather than necessity to pay quarterly.
And it gives individuals access to see how much tax they pay via their employer.
Now, i am far from being a tax guru, so i must be missing something?
Initially they are providing an option to pay monthly - which I think is a good thing.
Of course, they could provide this option right now with no wholesale and fundamental change to the current system. Paying tax frequently is not that hard to implement. They could do that now with NO cost of restructuring the whole system.
However, it is expected that the frequent payment option will eventually become compulsory.
Of course, they could provide this option right now with no wholesale and fundamental change to the current system. Paying tax frequently is not that hard to implement. They could do that now with NO cost of restructuring the whole system.
However, it is expected that the frequent payment option will eventually become compulsory.
Hosenbugler said:
Eric Mc said:
How naive can you be.
At the moment, if HMRC wants full details of a business's transactions, they must launch an enquiry under the Taxes Management Act - and they must notify the taxpayer of their rights under this procedure. In other words, a tax enquiry is the legal equivalent of the issue of an arrest or a search warrant.
Under these new rules, HMRC will effectively be automatically getting as a matter of course all the data they would normally have to open an enquiry to get. So, in effect, they automatically have the right to enquire into your affairs WITHOUT legal recourse first.
I have serious problems with that.
Scary. Is this the implementation of what was mooted some while ago, whereby , if HMRC figure they are owed , then they can plunder an individuals bank account directly and automatically? At the moment, if HMRC wants full details of a business's transactions, they must launch an enquiry under the Taxes Management Act - and they must notify the taxpayer of their rights under this procedure. In other words, a tax enquiry is the legal equivalent of the issue of an arrest or a search warrant.
Under these new rules, HMRC will effectively be automatically getting as a matter of course all the data they would normally have to open an enquiry to get. So, in effect, they automatically have the right to enquire into your affairs WITHOUT legal recourse first.
I have serious problems with that.
I forecast many mattresses being stuffed if so.
Fact is, HMRC are a disaster, they certainly have been with my tax affairs over the years. Certainly, the bullying and intimidation I was subject to some years ago , over money I did not owe was an appalling experience, the thought thay they can effectively steal that money without recourse is chilling.
Eric Mc said:
Can you explain how a small business or landlord can submit their quarterly updates without this technology then.
HMRC have stated that digital is the only way for this (hence why it's called Making Tax Digital). What are the non-digital options?
Forcing people into the 21st century....?HMRC have stated that digital is the only way for this (hence why it's called Making Tax Digital). What are the non-digital options?
Borroxs said:
Eric Mc said:
Can you explain how a small business or landlord can submit their quarterly updates without this technology then.
HMRC have stated that digital is the only way for this (hence why it's called Making Tax Digital). What are the non-digital options?
Forcing people into the 21st century....?HMRC have stated that digital is the only way for this (hence why it's called Making Tax Digital). What are the non-digital options?
In any case, forcing people isn't a good way of getting things done - especially when it is a government department doing the forcing.
I run a small garage and MOT station so in essence I hit things with big hammers and poke what's left with a screwdriver. Now to me this constitutes another expense that makes my business less profitable. (There's a reason I employ an accountant just the same as there's a reason my accountant gets me to repair and MOT his car, neither of us has a bloody clue how to do each others job.) My neighbor runs a small sandwich shop and her margins are a damn site tighter than mine and the same will go for her an expense that she could well do without. Same goes for the lass down the street who does cleaning whilst her kids are at school.
To me this is going to drive a lot of people to just say sod it cash in hand no questions as they are only just about making a wage as it is.
Being a legitimate tax paying business these days consists of ever man and his dog trying to get their hands in your pockets and then another government department thinking up another scheme to cripple smaller businesses like the pension scheme fiasco.
To me this is going to drive a lot of people to just say sod it cash in hand no questions as they are only just about making a wage as it is.
Being a legitimate tax paying business these days consists of ever man and his dog trying to get their hands in your pockets and then another government department thinking up another scheme to cripple smaller businesses like the pension scheme fiasco.
anonymous said:
[redacted]
It depends. Probably not. It depends how much it costs their 'customers' to comply to the new system. If what Eric says is accurate, and we've no reason to believe it's not, then I'll wager the cost will be orders of magnitude higher than any savings at HMRC (if there really are any). anonymous said:
[redacted]
You are an IT person - it comes naturally for people like you. It's your profession. It doesn't come naturally for everybody and it is arrogant and simple minded to assume it does.But that can be typical of many in the IT world.
I have no problem with the law placing obligations on people to do things. What I don't like is the law insisting that you can only do things ONE WAY just to assist the law maker.
fblm said:
anonymous said:
[redacted]
It depends. Probably not. It depends how much it costs their 'customers' to comply to the new system. If what Eric says is accurate, and we've no reason to believe it's not, then I'll wager the cost will be orders of magnitude higher than any savings at HMRC (if there really are any). Indeed, both the Parliamentary Accounts Committee and the Treasury Select Committee have asked HMRC to justify the numbers they have been putting out regarding both increased tax income and claimed cost savings. At the moment, HMRC has not been able to provide details as to how they have arrived at the figures they are quoting.
It's not very reassuring at all.
It's not very reassuring at all.
I'm not really sure how this will work.
All I know is that of all the online services I use, currently the most hopeless are HMRC. I have consistently failed to get it to work, had endless problems with usernames/passwords, to the extent I've given up trying to use them & resorted to doing paper returns.
Coupled with that the online support & query lines are consistently the rudest most unhelpful (Ok maybe on a par with BT) that I've come across.
When I, as I normally have to, write to HMRC I do however find them reasonable & helpful.
Based on this I can see the implementation of this being a disaster.
All I know is that of all the online services I use, currently the most hopeless are HMRC. I have consistently failed to get it to work, had endless problems with usernames/passwords, to the extent I've given up trying to use them & resorted to doing paper returns.
Coupled with that the online support & query lines are consistently the rudest most unhelpful (Ok maybe on a par with BT) that I've come across.
When I, as I normally have to, write to HMRC I do however find them reasonable & helpful.
Based on this I can see the implementation of this being a disaster.
fblm said:
anonymous said:
[redacted]
How many millions? There are over 5 million SMEs in the UK. If it costs them just 200 quid each to comply with the new system you're already into a billion lost and we both know it will cost FAR more than 200 quid each.Currently being self employed works well for me as it pays better (about 25%), however the benefits are diminishing rapidly. I suspect if this goes through I'll just go back to a full time job.
Where did you get piece of information from?
The only opt out so far mentioned by HMRC was an exemption for tiny sole traderships i.e. those with a TURNOVER under £10,000 per year.
And that was only after some pressure was put on them by interested parties such as the Federation of Small Businesses.
None of the lectures I attended mentioned any choices other than "do it".
The only opt out so far mentioned by HMRC was an exemption for tiny sole traderships i.e. those with a TURNOVER under £10,000 per year.
And that was only after some pressure was put on them by interested parties such as the Federation of Small Businesses.
None of the lectures I attended mentioned any choices other than "do it".
Just received this e-mail -
THE HOT STORY
Digital tax plans could spell disaster
A report by MPs warns that plans to digitise the tax returns system are being rushed through and could end in "disaster". The Treasury Select Committee believes the government's ‘Making Tax Digital’ policy, due to come into force in April 2018, could put companies out of business or encourage tax avoidance because of the additional costs and administrative burdens placed on the smallest businesses. Committee chairman Andrew Tyrie said that the current timetable "looks unachievable" and called for a delay until at least 2019 to allow concerns to be addressed. At present, businesses with a turnover of under £10,000 will be exempt, and MPs also recommend increasing this threshold to £83,000. The report also cast doubt over an official forecast which suggested that MTD would bring in an additional £625m for the public purse. MPs believe that in reality, the plans could result in lost revenue for HMRC because of the anger provoked among taxpayers. The FSB claims that the changes will cost the average small company an extra £2,770 a year, in addition to the £3,600 that it already spends on tax advice. In response to the report, the ICAEW called on the government to delay the project and make it voluntary, at least for the smallest businesses, while the CIOT and ATT have also backed the report’s conclusions. Separately, the FT profiles one of HMRC’s trial “future workplaces” - a test bed for the vast new regional centres where it plans to consolidate its operations.
Source: The Times (14/01/2017) Financial Times (14/01/2017) Financial Times (14/01/2017) Independent i (14/01/2017) Yorkshire Post (14/01/2017)
THE HOT STORY
Digital tax plans could spell disaster
A report by MPs warns that plans to digitise the tax returns system are being rushed through and could end in "disaster". The Treasury Select Committee believes the government's ‘Making Tax Digital’ policy, due to come into force in April 2018, could put companies out of business or encourage tax avoidance because of the additional costs and administrative burdens placed on the smallest businesses. Committee chairman Andrew Tyrie said that the current timetable "looks unachievable" and called for a delay until at least 2019 to allow concerns to be addressed. At present, businesses with a turnover of under £10,000 will be exempt, and MPs also recommend increasing this threshold to £83,000. The report also cast doubt over an official forecast which suggested that MTD would bring in an additional £625m for the public purse. MPs believe that in reality, the plans could result in lost revenue for HMRC because of the anger provoked among taxpayers. The FSB claims that the changes will cost the average small company an extra £2,770 a year, in addition to the £3,600 that it already spends on tax advice. In response to the report, the ICAEW called on the government to delay the project and make it voluntary, at least for the smallest businesses, while the CIOT and ATT have also backed the report’s conclusions. Separately, the FT profiles one of HMRC’s trial “future workplaces” - a test bed for the vast new regional centres where it plans to consolidate its operations.
Source: The Times (14/01/2017) Financial Times (14/01/2017) Financial Times (14/01/2017) Independent i (14/01/2017) Yorkshire Post (14/01/2017)
Eric Mc said:
Where did you get piece of information from?
The only opt out so far mentioned by HMRC was an exemption for tiny sole traderships i.e. those with a TURNOVER under £10,000 per year.
And that was only after some pressure was put on them by interested parties such as the Federation of Small Businesses.
None of the lectures I attended mentioned any choices other than "do it".
From their online info that i posted previously.....The only opt out so far mentioned by HMRC was an exemption for tiny sole traderships i.e. those with a TURNOVER under £10,000 per year.
And that was only after some pressure was put on them by interested parties such as the Federation of Small Businesses.
None of the lectures I attended mentioned any choices other than "do it".
"Individuals and small businesses will have the option to ‘pay as
you go’ to help manage their cash flow, so they won’t be faced
with a one-off bill many months down the line. Instead of making
a number of payments across different taxes, they will be able to
make just one. It will feel like paying a single tax."
Unless you have specific information that contradicts that.
Don't confuse tax payments with tax compliance - two totally different things.
Pay as you go is only one element of the Making Tax Digital system. It is actually the least onerous and probably the one practical aspect of it - and the one thing that I wouldn't have objected to if they made it compulsory.
The problem is not the tax payment aspect, it's the tax compliance regime - which is excessive and difficult and far too intrusive for most businesses who have much better and important things to be doing with their time than constantly having to arrange their data in formats to suit HMRC and then submit said data at least four times a year.
Payments aren't the issue in this at all.
Pay as you go is only one element of the Making Tax Digital system. It is actually the least onerous and probably the one practical aspect of it - and the one thing that I wouldn't have objected to if they made it compulsory.
The problem is not the tax payment aspect, it's the tax compliance regime - which is excessive and difficult and far too intrusive for most businesses who have much better and important things to be doing with their time than constantly having to arrange their data in formats to suit HMRC and then submit said data at least four times a year.
Payments aren't the issue in this at all.
98elise said:
The software cost alone will be over £200 per SME. There there is the fact I now have to do 9 returns per year. I expect that will add a couple of days work for me over the course of a year. That's days I can't bill.
Currently being self employed works well for me as it pays better (about 25%), however the benefits are diminishing rapidly. I suspect if this goes through I'll just go back to a full time job.
The software wont cost over £200. Stop scaremongering and making things up. If you actually read what the HMRC sayCurrently being self employed works well for me as it pays better (about 25%), however the benefits are diminishing rapidly. I suspect if this goes through I'll just go back to a full time job.
HMRC Making Tax Digital Roamap said:
These businesses will be required to use digital tools, such as software or apps, to keep records of their income and expenditure. HMRC will ensure that free apps and software products are available, but many businesses and their advisers will choose to use commercially-available tax software packages.
Let say you choose to use commercial software to submit updates to HMRC. TaxCalc charge £26.50 for the personal version and £50 for a partnership version. Ltd company is more expensive at £90, but it is likely that Ltd companies will be using accountancy software that will be updated to support the online filing requirements.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff