Making Tax Digital
Discussion
I raised this with my accountant recently. He's very old school, does everything on paper/by hand, no computers, spreadsheets, or even email. Not sure how he does online submissions, suspect he's employing someone to do anything like that. Not sure if he doesn't really understand what's coming or if he's burying his head in the sand - I fully expected him to tell me that he's retiring rather than try and adapt to 'Making Tax Digital' changes. But he's basically told me that HMRC can't stop me keeping my books by excel spreadsheets (which have worked perfectly well for me ever since I started my small ltd company).
98elise 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.
I will have 9 tax returns to do a year....sounds much simpler.sole trader with small business
also owns a buy to let
has some investment income (interest and dividends)
Their reporting requirements will be -
four quarterly updates for the sole tradership
four SEPARATE quarterly returns for the buy to let
separate monitoring and updating of the digital tax account (this bit applies to everybody - not just those who currently need to make self assessment tax returns)
an ANNUAL final reconciliation submission tying all the above together and correcting (no doubt numerous) errors or omissions made when making the quarterly submissions.
That is at least NINE submissions a year COMPLETELY IGNORING any VAT submission requirements or PAYE submission requirements that the trader might already have to do.
The other point to this is someone has to pay for the extra workload - namely the client.
This will seriously break some smaller entities in already competitive times. I still look after a couple of 'businesses' whose affairs are akin to a carrier bag full of receipts. Whilst not ideal, some self employed people have a hard enough time keeping the business in check, to earn them their living. They certainly don't have the capability of managing their affairs in the detail required, or any spare cash to pay someone else to do it.
A one man band painter and decorator does not earn money when sorting his tax out on his PC. Which means the inevitable price increases for all.
This will seriously break some smaller entities in already competitive times. I still look after a couple of 'businesses' whose affairs are akin to a carrier bag full of receipts. Whilst not ideal, some self employed people have a hard enough time keeping the business in check, to earn them their living. They certainly don't have the capability of managing their affairs in the detail required, or any spare cash to pay someone else to do it.
A one man band painter and decorator does not earn money when sorting his tax out on his PC. Which means the inevitable price increases for all.
The main difference this'll make to my life (and I suspect many others):
Accountants will be doing more work so their fees will be going up, so businesses will have to make a bit more to cover that.
Incentivising really, and also just a basic step in the laborious process of the eventual full digitalisation of 'everything'.
Eric, take 15, comfiest chair, tiger feet slippers, footstool, pour glass of good 'un, skin up, headphones on, deep breaths, and.......
https://www.youtube.com/watch?v=NEoWaP4skv8
Accountants will be doing more work so their fees will be going up, so businesses will have to make a bit more to cover that.
Incentivising really, and also just a basic step in the laborious process of the eventual full digitalisation of 'everything'.
Eric, take 15, comfiest chair, tiger feet slippers, footstool, pour glass of good 'un, skin up, headphones on, deep breaths, and.......
https://www.youtube.com/watch?v=NEoWaP4skv8
Eric Mc said:
Exactly. This is a typical scenario -
sole trader with small business
also owns a buy to let
has some investment income (interest and dividends)
Their reporting requirements will be -
four quarterly updates for the sole tradership
four SEPARATE quarterly returns for the buy to let
separate monitoring and updating of the digital tax account (this bit applies to everybody - not just those who currently need to make self assessment tax returns)
an ANNUAL final reconciliation submission tying all the above together and correcting (no doubt numerous) errors or omissions made when making the quarterly submissions.
That is at least NINE submissions a year COMPLETELY IGNORING any VAT submission requirements or PAYE submission requirements that the trader might already have to do.
Exactly Eric, and to me this seems completely unworkable, which is why I suspect it will get watered down or fall on it's arse. I do wonder what planet HMRC are on.sole trader with small business
also owns a buy to let
has some investment income (interest and dividends)
Their reporting requirements will be -
four quarterly updates for the sole tradership
four SEPARATE quarterly returns for the buy to let
separate monitoring and updating of the digital tax account (this bit applies to everybody - not just those who currently need to make self assessment tax returns)
an ANNUAL final reconciliation submission tying all the above together and correcting (no doubt numerous) errors or omissions made when making the quarterly submissions.
That is at least NINE submissions a year COMPLETELY IGNORING any VAT submission requirements or PAYE submission requirements that the trader might already have to do.
Oakey said:
Hosenbugler said:
I forecast many mattresses being stuffed if so.
Which is great, right up until they change the notes. The most successful parasites are the ones that do the least damage to their hosts.
I've often thought that what will put me out of business won't be the economy, bad clients, bad luck, natural disasters or similar; it will be the 'help' that HMRC & the rest of the government wish to give me.
"The nine most terrifying words in the English language are: I'm from the government and I'm here to help." - President Reagan Aug. 12, 1986
I've often thought that what will put me out of business won't be the economy, bad clients, bad luck, natural disasters or similar; it will be the 'help' that HMRC & the rest of the government wish to give me.
"The nine most terrifying words in the English language are: I'm from the government and I'm here to help." - President Reagan Aug. 12, 1986
Eric Mc said:
98elise 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.
I will have 9 tax returns to do a year....sounds much simpler.sole trader with small business
also owns a buy to let
has some investment income (interest and dividends)
Their reporting requirements will be -
four quarterly updates for the sole tradership
four SEPARATE quarterly returns for the buy to let
separate monitoring and updating of the digital tax account (this bit applies to everybody - not just those who currently need to make self assessment tax returns)
an ANNUAL final reconciliation submission tying all the above together and correcting (no doubt numerous) errors or omissions made when making the quarterly submissions.
That is at least NINE submissions a year COMPLETELY IGNORING any VAT submission requirements or PAYE submission requirements that the trader might already have to do.
one is vat reg - 4 returns
investment property - 4 returns
and an annual self assesment for divdends etc - 1 .
So er 21 returns a year.
This event has the ability to cause major disruption to the economy - many many sole traders are simply not able/ capable/ dont have the time to even contemplate it. They will have to charge more to pay someone else to do it or invoice out less time if they do it themselves. They will need a computer and software, have to pay a license for the software and update their IT when the thing wont do its job any longer. They have to make sure the data is input correctly, back it up and check it all. Its also the precursor to cash being withdrawn from society. Imagine going to a car boot sale on a sunday morning and not having cash. I still have customers in my shop that dont have a bank a account ! I have been thinking about how it will effect my shop and the amount of time I will have to spend buggering about doing it or what it will cost me. I dont enjoy bookwork despite having worked in a bank for a few years and having a formal accountancy qualification and so pay my accountant to do it all. He is even suggesting that he will have to cut the number of clients he deals with in order to do this for the remaining ones simply because he does not want to expand his business by taking on more staff and can increase his income from the customers that remain.
Eric Mc said:
98elise 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.
I will have 9 tax returns to do a year....sounds much simpler.sole trader with small business
also owns a buy to let
has some investment income (interest and dividends)
Their reporting requirements will be -
four quarterly updates for the sole tradership
four SEPARATE quarterly returns for the buy to let
separate monitoring and updating of the digital tax account (this bit applies to everybody - not just those who currently need to make self assessment tax returns)
an ANNUAL final reconciliation submission tying all the above together and correcting (no doubt numerous) errors or omissions made when making the quarterly submissions.
That is at least NINE submissions a year COMPLETELY IGNORING any VAT submission requirements or PAYE submission requirements that the trader might already have to do.
Vixpy1 said:
so hang on , 3 companies - 12 returns
one is vat reg - 4 returns
investment property - 4 returns
and an annual self assesment for divdends etc - 1 .
So er 21 returns a year.
For the moment, limited companies won't be required to submit quarterly updates - although at some point they will. HMRC has to reconcile in its legislation how to make quarterly accounting compulsory whilst at the same time not breaking existing company law requiring ANNUAL limited company accounts and the internationally recognised accounting standards which are all based on the preparation of ANNUAL accounts and ANNUAL reports.one is vat reg - 4 returns
investment property - 4 returns
and an annual self assesment for divdends etc - 1 .
So er 21 returns a year.
Isn't the point though that you don't have to do the returns, you only have to "Provide information which hmrc can't obtain from other means" I.e unless you're not banking your cash or have other money which hmrc can't know where it went or came from you literally just look through the accounts as presented and sign them off.
Where did you get that particular piece of information from?
If you are a sole trader, a partner in a partnership, a partnership itself, a buy to let landlord or a holiday let operator, you will HAVE to submit quarterly updates to ether with the annual reconciliation.
From possibly 2020 or 2021, limited companies will also have to do the same.
I have not heard anything that contradicts that from anybody - and I've been reading up on this extensively as well as attending to lectures course specifically covering the details of Making Tax Digital and the Digital Tax Account.
If you are a sole trader, a partner in a partnership, a partnership itself, a buy to let landlord or a holiday let operator, you will HAVE to submit quarterly updates to ether with the annual reconciliation.
From possibly 2020 or 2021, limited companies will also have to do the same.
I have not heard anything that contradicts that from anybody - and I've been reading up on this extensively as well as attending to lectures course specifically covering the details of Making Tax Digital and the Digital Tax Account.
Eric Mc said:
Where did you get that particular piece of information from?
If you are a sole trader, a partner in a partnership, a partnership itself, a buy to let landlord or a holiday let operator, you will HAVE to submit quarterly updates to ether with the annual reconciliation.
I have not heard anything that contradicts that from anybody - and I've been reading up on this extensively as well as attending to lectures course specifically covering the details of Making Tax Digital and the Digital Tax Account.
Ok, I thought the point was for the revenue to present you your accounts derived form their view of your banking and spending and you to sign them off. But I'm sure you know better than me. That's why you're worried and I'm not If you are a sole trader, a partner in a partnership, a partnership itself, a buy to let landlord or a holiday let operator, you will HAVE to submit quarterly updates to ether with the annual reconciliation.
I have not heard anything that contradicts that from anybody - and I've been reading up on this extensively as well as attending to lectures course specifically covering the details of Making Tax Digital and the Digital Tax Account.
fblm said:
Wow. I wonder if the extra tax raised from a small number of companies is more than the tax lost from making all companies less effecient.
Doesn't matter comrade, HMRC like all public sector departments is riddled through with common purpose drones who oppose western democracy, and almost certainly hate sole traders and definitely don't mix with any. The morons who punched this through certainly won't have to deal with the fallout , it won't impact on their cosy club, paye job for life with a bonus for failure, rewards/promotion for failure and an inflation proofed pension the state stands behind. And that above post is exactly why this will be a disaster. The general public tolerates tax because they know it is necessary. But there is a fine line that has to be steered between encouraging the willing cooperation of the public and outright coercion of the public. Making Tax Digital is way too much like the latter rather than the former.
Coercion is always resented. Indeed, if you look at many revolutions, you will see that over bearing tax or an overbearing tax system is often a root cause.
Coercion is always resented. Indeed, if you look at many revolutions, you will see that over bearing tax or an overbearing tax system is often a root cause.
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