Making Tax Digital

Author
Discussion

Eric Mc

Original Poster:

121,785 posts

264 months

Tuesday 17th January 2017
quotequote all
Although this could be looked on as a business, or a finance or even an employment matter, the implementation of Making Tax Digital in just over one year's time will affect EVERYBODY, not just those with complex or business related tax affairs.

Therefore, I think it should be discussed under the broader aspects of the "News" section rather than in one of the more specialised forums where people who need to be aware of it might not venture too often.

To kick start the discussion, I am providing a link to an article today in Accountancy Age (the world's most exciting newspaper smile) which reports on the Treasury Select Committee's very grave concerns about this whole programme.

I would advise everyone (and I really do mean "everyone") should be aware of Making Tax Digital (MTD) and be fully aware as to how it will affect them.

Just to let you know, even though this is the most fundamental change to UK taxation since the introduction of Self Assessment 20 years ago, HMRC has stated that they will NOT be conducting a public awareness campaign. So it is up to each taxpayer to find out about these radical changes themselves.

https://www.accountancyage.com/2017/01/17/treasury...

Derek Smith

45,514 posts

247 months

Tuesday 17th January 2017
quotequote all
Eric Mc said:
Although this could be looked on as a business, or a finance or even an employment matter, the implementation of Making Tax Digital in just over one year's time will affect EVERYBODY, not just those with complex or business related tax affairs.

Therefore, I think it should be discussed under the broader aspects of the "News" section rather than in one of the more specialised forums where people who need to be aware of it might not venture too often.

To kick start the discussion, I am providing a link to an article today in Accountancy Age (the world's most exciting newspaper smile) which reports on the Treasury Select Committee's very grave concerns about this whole programme.

I would advise everyone (and I really do mean "everyone") should be aware of Making Tax Digital (MTD) and be fully aware as to how it will affect them.

Just to let you know, even though this is the most fundamental change to UK taxation since the introduction of Self Assessment 20 years ago, HMRC has stated that they will NOT be conducting a public awareness campaign. So it is up to each taxpayer to find out about these radical changes themselves.

https://www.accountancyage.com/2017/01/17/treasury...
Indeed.

I use accountants and they published a briefing document on their site a little while ago. It was a bit worrying and I wondered if they's just taken the bad bits to get us to put the message out to our friends to have the professionals do it. It's behind a 'pay wall'. But the more I read the more I see they just said it as it is.


AndrewEH1

4,917 posts

152 months

Tuesday 17th January 2017
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Will be reading this thread with interest now you've finally started it! It'll be good to see what the professionals make of all this.

Our family finances and somewhat outwith the norm so it'll be very interesting when/if this trickles down to individuals rather than just businesses. I wonder if it'll encompass everything from Self Assessment to Gifts/IHT to CGT.

Efbe

9,251 posts

165 months

Tuesday 17th January 2017
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Scary stuff.

I do the tax for my wife's business. Hadn't realised this was coming along at all!

LeighW

4,362 posts

187 months

Tuesday 17th January 2017
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Having been an accountant in a small practice for 25 years and having had the 'pleasure' of dealing with HMRC's systems over that time, I can safely say that it will either be delayed, or an utter disaster. Probably both.

MitchT

15,789 posts

208 months

Tuesday 17th January 2017
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What could possibly go wrong?

I'm having enough of an issue registering for self assessment. If I do what I'm supposed to I get taken to the "Personal tax account" page after the Government Gateway log-in page, instead of the "Register for HMRC taxes" page that I should be taken to. If I short circuit it by typing the correct URL in, after the Gateway log-in, I get the correct forms but when I get to the point of entering my home address it can't find my address when I use the postcode search form and there's no option to manually enter my address. Total fail.

FredClogs

14,041 posts

160 months

Tuesday 17th January 2017
quotequote all
The good news it it'll essentially give the revenue the power and scope to monitor bank accounts and all you business transactions, so as long as your business is straight forward and not dodging anything you've nothing to worry about and life should be simpler, pay the bills when they come and inform the revenue of any mistakes they make, what could be easier.

markcoznottz

7,155 posts

223 months

Tuesday 17th January 2017
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Let's be honest, not only can it not happen, it won't.

Eric Mc

Original Poster:

121,785 posts

264 months

Tuesday 17th January 2017
quotequote all
FredClogs said:
The good news it it'll essentially give the revenue the power and scope to monitor bank accounts and all you business transactions, so as long as your business is straight forward and not dodging anything you've nothing to worry about and life should be simpler, pay the bills when they come and inform the revenue of any mistakes they make, what could be easier.
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.

Jasandjules

69,825 posts

228 months

Tuesday 17th January 2017
quotequote all
This will be a complete disaster.

Every year my tax (on-line) has major errors and issues, the system fails, the system falls over, it is not going to go well at all.


FredClogs

14,041 posts

160 months

Tuesday 17th January 2017
quotequote all
Eric Mc said:
FredClogs said:
The good news it it'll essentially give the revenue the power and scope to monitor bank accounts and all you business transactions, so as long as your business is straight forward and not dodging anything you've nothing to worry about and life should be simpler, pay the bills when they come and inform the revenue of any mistakes they make, what could be easier.
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.
Sorry, my apathetic cynicism and sarcasm is too complex for a single emoji... I'm not naive just exhausted with worrying about stuff which may or may not happen an may or may not be good, bad or indifferent.

Eric Mc

Original Poster:

121,785 posts

264 months

Tuesday 17th January 2017
quotequote all
FredClogs said:
Eric Mc said:
FredClogs said:
The good news it it'll essentially give the revenue the power and scope to monitor bank accounts and all you business transactions, so as long as your business is straight forward and not dodging anything you've nothing to worry about and life should be simpler, pay the bills when they come and inform the revenue of any mistakes they make, what could be easier.
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.
Sorry, my apathetic cynicism and sarcasm is too complex for a single emoji... I'm not naive just exhausted with worrying about stuff which may or may not happen an may or may not be good, bad or indifferent.
It is happening.

The only doubt is perhaps the timing - although so far HMRC is not budging on its original timetable..

At this moment, everything is set for a 6 April 2018 implementation.

And, just to add a further little twist to the story, this is being implemented at the same time that 150 tax offices are being closed and being replaced by 15 call centres.

Murph7355

37,651 posts

255 months

Tuesday 17th January 2017
quotequote all
Eric Mc said:
...

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.
Ditto.

HMRC are an unpleasant organisation to deal with IME. This is unlikely to improve matters.

FredClogs

14,041 posts

160 months

Tuesday 17th January 2017
quotequote all
Eric Mc said:
FredClogs said:
Eric Mc said:
FredClogs said:
The good news it it'll essentially give the revenue the power and scope to monitor bank accounts and all you business transactions, so as long as your business is straight forward and not dodging anything you've nothing to worry about and life should be simpler, pay the bills when they come and inform the revenue of any mistakes they make, what could be easier.
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.
Sorry, my apathetic cynicism and sarcasm is too complex for a single emoji... I'm not naive just exhausted with worrying about stuff which may or may not happen an may or may not be good, bad or indifferent.
It is happening.

The only doubt is perhaps the timing - although so far HMRC is not budging on its original timetable..

At this moment, everything is set for a 6 April 2018 implementation.
Well, you're an accountant I'll let you worry about it. My business is pretty straightforward, I can't see it being much more hassle than the quarterly VAT returns i do, which is 45mins every quarter.

I don't like the idea of hmrc having an xray view of my bank account and companies revenue stream, but I've nothing to hide, neither have most people, but the sale of illegal money and the grey market is costing us all £billions, it was always going to happen at some point


Edited by FredClogs on Tuesday 17th January 11:42

Eric Mc

Original Poster:

121,785 posts

264 months

Tuesday 17th January 2017
quotequote all
Do your VAT returns fall on calendar quarters?

If they don't, they won't align with the tax quarters which will be calendar quarters only.

HMRC's longer term plan is to abolish the VAT return and use the data from the accounting updates to review VAT submissions.

How they can align all this when VAT accounting and business accounting are actually very different is a bit of a mystery and they haven;t outlined how they intend to square that particular circle. For instance, tax and accounting rules rules generally require that capital expenditure be properly accounted for and differentiated from revenue costs whereas VAT is not concerned about such issues.

If the business is eligible for VAT cash accounting it may still be preparing its accounts on an accruals basis i.e the correct method. That too would have to be reconciled between the two conflicting requirements

It also looks like HMRC are planning on forcing ALL sole traders to have a business year end that matches the tax year - even though that may not be appropriate to all businesses. They did play with this idea 20 plus years ago when throwing out feelers on Self Assessment but backed off when it was pointed out to them that businssess were set up not for the benefit of the tax authorities, but to provide a living to their proprietors and staff.

HMRC seem to have forgotten this in the intervening two decades.

Hosenbugler

1,854 posts

101 months

Tuesday 17th January 2017
quotequote all
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?

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.

afrochicken

1,166 posts

208 months

Tuesday 17th January 2017
quotequote all
Eric Mc said:
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.
This has a feeling of the "Snoopers Charter" about it. That seems to be the direction our govt is heading in now?

Thanks for bringing this to our attention Eric. No doubt the classic "nothing to hide, nothing to fear" line will be trotted out with this one too

98elise

26,380 posts

160 months

Tuesday 17th January 2017
quotequote all
FredClogs said:
The good news it it'll essentially give the revenue the power and scope to monitor bank accounts and all you business transactions, so as long as your business is straight forward and not dodging anything you've nothing to worry about and life should be simpler, pay the bills when they come and inform the revenue of any mistakes they make, what could be easier.
I will have 9 tax returns to do a year....sounds much simpler.

alock

4,224 posts

210 months

Tuesday 17th January 2017
quotequote all
Eric Mc said:
Article said:
The report from the Treasury Select Committee proposes a “widely supported” solution involving a deferral of the implementation, and readjustment of the threshold to be set at £83,000, the current VAT threshold, before falling to £11,000 over a three-year period.
Is the VAT threshold reducing to £11000 or have I completely misread that sentence?

sanguinary

1,344 posts

210 months

Tuesday 17th January 2017
quotequote all
The issue I have is with HMRC attempting to align everything to calendar quarters. It means I'm potentially going to be too busy every three months, but fairly quiet for the other two. If HMRC also move sole trader year ends to coincide with the tax year, I may as well forget what I'm doing now.*

  • Outside of 9-5 I carry out book keeping and account work for various friends and family (which also forces me to keep my eye on the accounting world) from sole trader to small Ltd company. I've already sacrificed a huge amount of time learning about RTI and auto enrolment, along with FRS102, with no real benefit to my bottom line as I don't do this to make much cash.
This is going to place a huge burden on smaller business who operate from a simple cash book.