Self employed to submit tax returns 4 times a year
Discussion
As if being self-employed wasn't difficult enough in the current economic climate, good old toff George Osborne has now decided to force the self employed to submit their tax returns not once but four times a year in order to smooth out tax revenue across the year, which will of course increase accountant bills and workloads for no good reason. Anyone with half an ounce of intelligence would realise this is unworkable but then George isn't in that class. If smoothing out tax revenue is the goal then why not allow businesses to submit year on year returns based upon their creation date? ... too damn simple for out-of-touch politicians to comprehend!
Now before the Labour Chancellor 'Gordon the Moron' changed the system so that the self-employed had to best guess and then submit the future revenue it was all very straight-forward, you provided your accountant with your last years figures and they produced very accurate figures to submit to the revenue whether it be profit or loss. Now you get fined if you don't predict correctly, and now George wants to further complicate the whole issue by having to submit your accounts four times a year online.
It's bad enough self-employed small businesses having to submit quarterly VAT returns online, but now he wants to further complicate the system. Some people just don't use computers and use old-fashioned books for their book-keeping, and many small business can't afford accountants to do their books for them so mistakes will be made.
So a message to George, what you need is bringing down to earth with a bump and given a job for a month on the shop-floor of a small business or shop to really appreciate just how a small business operates, because not everyone is born into wealth, and you really do need a kick up the backside because you and your mate Cameron do seem to have lost touch with reality!
Now before the Labour Chancellor 'Gordon the Moron' changed the system so that the self-employed had to best guess and then submit the future revenue it was all very straight-forward, you provided your accountant with your last years figures and they produced very accurate figures to submit to the revenue whether it be profit or loss. Now you get fined if you don't predict correctly, and now George wants to further complicate the whole issue by having to submit your accounts four times a year online.
It's bad enough self-employed small businesses having to submit quarterly VAT returns online, but now he wants to further complicate the system. Some people just don't use computers and use old-fashioned books for their book-keeping, and many small business can't afford accountants to do their books for them so mistakes will be made.
So a message to George, what you need is bringing down to earth with a bump and given a job for a month on the shop-floor of a small business or shop to really appreciate just how a small business operates, because not everyone is born into wealth, and you really do need a kick up the backside because you and your mate Cameron do seem to have lost touch with reality!
Oceanic said:
I do mine quarterly here in Sweden, I actually prefer it so there are no hidden nasties and it means the business is better organised in terms of finances.
Are you self employed?If so, do you have to prepare annual or quarterly self employed accounts?
Are there underlying claims, allowances and charges in those accounts that are required by law or by accounting convention and accounting standards, to be accounted for on an annual basis?
If so, how are these tax relief claims and accounting entries made in a set of quarterly figures?
If you are self employed, you may have allowable trading losses - some created by the claims mounted above. Under current tax law, these loss reliefs are claimed on an annual basis. If we go to quarterly declaring of self employed profits, how will HMRC treat such claims which the current legislation only allows to be claimed annually?
If we do go to quarterly accounting for self employed (and partnership) accounts, there is a massive amount of legislative changes that have to be made to enable these quarterly submissions to make sense.
I have no objection to quarterly submission of some details to HMRC, but I am struggling to see how the submission of quarterly tax returns can be assimilated into a tax system that is fundamentally based on annual claims, reliefs and declarations.
Eric Mc said:
I have no objection to quarterly submission of some details to HMRC, but I am struggling to see how the submission of quarterly tax returns can be assimilated into a tax system that is fundamentally based on annual claims, reliefs and declarations.
I suspect that the sole purpose will be the payment of quarterly tax 'on account'.PurpleMoonlight said:
Eric Mc said:
I have no objection to quarterly submission of some details to HMRC, but I am struggling to see how the submission of quarterly tax returns can be assimilated into a tax system that is fundamentally based on annual claims, reliefs and declarations.
I suspect that the sole purpose will be the payment of quarterly tax 'on account'.Also, if quarterly returns are required, people like me who normally submit up to 200 returns each year, will end up having to submit around 800 returns - with all the associated deadlines and penalties that will no doubt go with failure to meet those deadlines..
t400ble said:
But I guess there will be less work to do come the time?
I doubt it very much.Annual accounts will still need to be prepared.
Annual tax allowances, loss reliefs and claims will still need to be made.
In some cases, there may be a small time saving in converting the quarterly figures into annual ones, but it all depends on the quality of the quarterly figures and the annual adjustments that will have to be made to turn them into recognisably compliant annual figures.
t400ble said:
I'm not that bothered how much my account charges, as I claim that back, or do I have it wrong?
What are you trying to say? Did you mean to say " I'm not that bothered how much my accountANT charges"?I can state pretty categorically that the need to submit FOUR sets of tax returns to HMRC will not result in accountancy charges going down. I fully expect to at least double my fees - if I haven't retired by 2020.
Edited by Eric Mc on Tuesday 15th December 09:18
PurpleMoonlight said:
RTI saw the end of the annual P35 so it may well work in a similar manner.
I think we can safely assume that the only benefit will be for HMRC though and not the tax payer.
PAYE is straightforward because the whole system, since it was created in 1945, was based on a weekly or monthly set of calculations - depending on how often the payroll is run.I think we can safely assume that the only benefit will be for HMRC though and not the tax payer.
Accounts and tax returns have been, since they began to be properly formalised in the 19th century, based on annual based calculations, claims, charges, accounting conventions, accounting standards etc etc. To shift what is essentially an annual process to a 3 monthly process - WITHOUT all the underlying annual based legislation and accounting rules being changed as well - is completely bonkers.
t to deal with! Seriously thinking about just getting a job. It would be a lot easier & less stress.Dave_ST220 said:
Thinking out loud here so don't shoot me down. Why could the figures from each VAT return not be used to calculate a rough tax amount with a balancing payment in January?
The figures used in a VAT return are derived from the underlying financial records of the business. However, they are most definitely NOT a method for calculating whether a business has made a taxable, trading profit. And there is no mechanism in VAT return work for making Capital Allowance claims or loss relief claims - both integral aspects of working out a business' or a sole trader's tax liability.And, of course, many, many, many businesses are not VAT registered - including some very big ones.
sgrimshaw said:
t400ble said:
So the £99 my account charges, isn't claimed back?
No.Who do you think it could possibly be "claimed back" from?
However, it is a deductable business expense and as such it reduces your taxable profit by £99.
HoHoHo said:
sgrimshaw said:
t400ble said:
So the £99 my account charges, isn't claimed back?
No.Who do you think it could possibly be "claimed back" from?
However, it is a deductable business expense and as such it reduces your taxable profit by £99.
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