Making Tax Digital

[Eric Mc]

How can HMRC insist that commercial companies provide free software? They have categorically stated that they won't be providing the software themselves.

[Esseesse]

Eric Mc said:

If this comes in in the form currently put forward by HMRC, the UK black economy will expand rapidly - exactly the opposite of what HMRC are claiming will happen.

The UK could become another Greece.

I think you're right.

[plasticpig]

They could pay companies to write the software and support it and release it under the companies branding rather than HMRC. But at the end of the day submitting information is not that complex a job. Verification of the information submitted is potentially incredibly complex but that's up to HMRC and not the software developer.

[arguti]

We use Sage for accounting and payroll and given the numerous issues we have had every time the legislation changes or a new version of windows comes out, I can see this ending in tears.

I'm with Eric on this one.

[Eric Mc]

Wanna bet?

[Rovinghawk]

Alucidnation said:

I still don't see why everyone is getting worked up about doing more returns per year.

I don't run my businesses for the benefit of HMRC. HMRC's primary function might be processing tax paperwork but mine isn't.

If I'm doing stuff for them I'm not doing stuff for me. I don't mind the money they take so much as the aggravation I have to go through to give it.

I recently had a major problem with accessing their 'improved' vat online system; the cause eventually was found to be that they'd typoed part of my address & their system wouldn't accept my correct address. In the meantime I had a month of threats for not using their system.

[Terminator X]

Hosenbugler said:

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.

When I first started my business I made a simple error to the tune of c£4k albeit spotted by the accountant so it was never "paid" to me. After a while HMRC spotted it and wanted to charge me a 33% penalty charge (afaik), which the law of the land says they can do, for an amount that I never saw! I then had to spend c£500 with a specialist tax person in order to avoid the payment. s

TX.

[anonymous-user]

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

I appreciate that. I was just pointing out the absurdity of defending the project for saving HMRC millions when it is going to cost everyone else many billions. (That's assuming HMRC do actually save themselves any money which I find unlikely)

[markcoznottz]

This is the danger with art graduates i.e. Career politicians, stuff gets nodded through by civil servants with their own agenda, and nobody dare take on the civil service. hopefully now a decent mp will put his head above the parapet and bring some common sense to proceedings. Is there any indication of who's baby this was? Was it something to do with Lin Homer?.

[Eric Mc]

Could be. It was originally announced by George Osborne in the 2015 Spring Budget but at that time the headline was "The Abolition of the Annual Tax Return" - which we now know was an utter lie.

http://www.bbc.co.uk/news/business-31937637

http://www.mirror.co.uk/news/uk-news/budget-2015-a...

[Sonic]

Whilst i like the idea of a unified system for tax and a nice easy interface to view and account with, in reality this is far from a simple piece of reconciliation software.

My experience of writing debt and accounting software for the public sector tells me that even attempting to design, develop and release a relatively simple solution is extremely hard work and completely outside of the realms of what management are capable of even establishing requirements for, let alone delivering, and that's before you even factor in public access to it which changes things entirely for UX and trying to programatically write the rather large amount of tax rules into a piece of software

In reality this is a complete land-grab by HMRC in a blatant attempt to have visibility and exert control on absolutely everything at all times and will, in my opinion, create a massive amount of extra work at a significant extra expenses for businesses, and that's assuming the software is actually delivered to a high standard. Reality tells me otherwise, and so you'll have to factor in the complete clusterfk of the IT solution into the equation, making the solution abhorrent.

I very much hope this doesn't ever see the light of day!

[Alucidnation]

Eric Mc said:

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.

Aaaah i'm with you now.

[anonymous-user]

Eric Mc said:

Pay as you go...

Weirdly this year was the first time I had to pay tax up front based on last years total. Half right away with my 2015-16 payment and half again in 6 months. Personally I think it's a bit of a fvcking liberty demanding tax up front on estimated income for next year. Is this 'pay as you go'?

[Sonic]

fblm said:

Weirdly this year was the first time I had to pay tax up front based on last years total. Half right away with my 2015-16 payment and half again in 6 months. Personally I think it's a bit of a fvcking liberty demanding tax up front on estimated income for next year. Is this 'pay as you go'?

Yes i've had the same and i thought it was incredibly cheeky! Fortunately my accountant was able to have this reduced based upon predicted income for this year, but otherwise you're very much paying for the following tax-year upfront before you've even calculated what it is and submitted your tax return!

No doubt any refund would be forthcoming...

[Rovinghawk]

I too have to pay tax on money I've not yet earned- I think it's a pretty scummy way to operate.

Yet another thing to consider when I decide whether to continue in business or just fold the company.

[anonymous-user]

Sonic said:

No doubt any refund would be forthcoming...

To be fair I did the wifes SA online on the 9th and got her refund on the 16th.

[Digga]

Eric Mc said:

Just received this e-mail -

THE HOT STORY



Digital tax plans could spell disaster...

Our management accountant is in doing year end figures and he's of the opinion that the scheme, as HMRC currently want it is not only unworkable for many (if not even most) SMEs they deal with (not us) but that there is no way it will go ahead.

We still have largish firms that don't even have BACS or online banking FFS!

[Alucidnation]

fblm said:

Eric Mc said:

Pay as you go...

Weirdly this year was the first time I had to pay tax up front based on last years total. Half right away with my 2015-16 payment and half again in 6 months. Personally I think it's a bit of a fvcking liberty demanding tax up front on estimated income for next year. Is this 'pay as you go'?

It's been like this for years though.

If you pay too much ahead, you get it refunded.

However yes, it does take the piss somewhat.

[Eric Mc]

fblm said:

Eric Mc said:

Pay as you go...

Weirdly this year was the first time I had to pay tax up front based on last years total. Half right away with my 2015-16 payment and half again in 6 months. Personally I think it's a bit of a fvcking liberty demanding tax up front on estimated income for next year. Is this 'pay as you go'?

It's not quite "Pay as you go" but it's the equivalent system that was adopted when Self Assessment was introduced 20 years ago. I actually don't think it's too bad a way of doing things.

The Payment on Account you will be making on 31 January 2017 is for tax year 2016/17, which, when you think about, we are 3/4 of the way through already. HMRC's thinking is that, if the Payment on Account is realistic, why not pay it in January as you should already have made 3/4 of your business profits for the year by then anyway.

However, do you know that you can apply to have the Payments on Account reduced to a lower level if you think that your profits for the following tax year are going to be lower? The Payments on Account can be reduced to any level - including Nil.

HMRC thinks you should have a fair idea of your 2016/17 profits now, so you should be in a position to know whether you can realistically reduce the Payments on Account.

Did your accountant not tell you this?

[anonymous-user]

Eric Mc said:

...we are 3/4 of the way through already.

Good point. I suppose we should be thankful they don't want interest for payment 1/4 year late!

Eric Mc said:

Did your accountant not tell you this?

My what? Haven't you seen layer cake? I actually paid the July installment at the same time otherwise I'm sure to forget and get fined.

Edited by anonymous-user on Wednesday 18th January 17:39