Big Brother?

Big Brother?

Didn't find your answer?

At face value the proposal by Osborne (no doubt led up the garden by the HMRC hierarchy)has come up with the notion that tax returns can be prepared in the first instance by the Revenue computers.

This idea has not been thought through and should have been rejected outright.

In order to work would every interest bearing account, shareholding, other investment, gift aid declaration etc etc need to have a UTR or NI number disclosed before being accepted.?

What about existing accounts etc?

What about entrance to museums, churches etc where Gift aid can be used on entry tickets?

I believe the idea is unworkable and likely to lead to absolute chaos.

What do others think?

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Replies (20)

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By Andrew288
19th Mar 2015 06:35

Agree with everything except
Your first question Mark.

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By mikeyban
19th Mar 2015 08:09

I think we are all worrying too much...

It cannot apply to the self employed or the letting of property nor to dividends and therefore companies unless there is a formal declaration process for each dividend paid...

As I see it this is nothing more than a 'pre populated' 'big brother' document that is on the computer rather than a form called a tax return.

I do worry in the next 5 years what will be the consequence to tax return software providers and the wonderful job they have done.

I cannot understand the need for this and if it is not broken why fix it?

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ghm
By TaxTeddy
19th Mar 2015 08:15

Here's one to think about.....

What if.....

... As part of the filing 'requirement' all self employed are obliged to use a cloud based accounting software to record their P&L in real time - it would handle VAT submissions too.

Unthinkable?

Maybe not - the software suppliers would embrace it for sure.

 

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Replying to cookie45:
By petersaxton
19th Mar 2015 09:44

Self employed?

TaxTeddy wrote:

What if.....

... As part of the filing 'requirement' all self employed are obliged to use a cloud based accounting software to record their P&L in real time - it would handle VAT submissions too.

Unthinkable?

Maybe not - the software suppliers would embrace it for sure.

There would be a rush to form limited companies!

Thanks (1)
Replying to jcace:
RLI
By lionofludesch
19th Mar 2015 10:20

I thought that

petersaxton wrote:

TaxTeddy wrote:

What if.....

... As part of the filing 'requirement' all self employed are obliged to use a cloud based accounting software to record their P&L in real time - it would handle VAT submissions too.

Unthinkable?

Maybe not - the software suppliers would embrace it for sure.

There would be a rush to form limited companies!

Maybe that's the intention.

Though why that should improve tax take, I don't know.

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By Richard Willis
19th Mar 2015 09:51

Ever dealt with Russia?

I have!  I had to use a Russian on line bank for a factory we had out there.  EVERY transaction has to carry supporting documentation and one day I couldn't access the account.  When I queried this the bank said that the tax authorities had locked it as they wanted clarification of an item!

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By MBK
19th Mar 2015 12:54

We should embrace and support this initiative

Where is the sense in printing a 20 page tax return for 3 or 4 entries?

To me the benefits of a properly implemented (with the accent on properly) digital account are huge - both for the profession and our clients.

Now let's watch HMRC make a complete cods of it!

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Replying to Tosie:
By petersaxton
19th Mar 2015 19:38

Logic

MBK wrote:

Where is the sense in printing a 20 page tax return for 3 or 4 entries?

To me the benefits of a properly implemented (with the accent on properly) digital account are huge - both for the profession and our clients.

Now let's watch HMRC make a complete cods of it!

You are right that there some benefits in getting the information from other sources. The 0% savings income band is designed to stop people messing around with small numbers although banks, etc. should report every number to stop people spreading their balances among banks.

The idea of a digital account is good.

The main problem will be when HMRC realise the problems and decide to cut back on some of the ideas. Are they going to want all this information regarding accounts for the self employed but not limited companies? What will they do regarding dividend income? I think clients would pay their tax monthly if they could afford to but many have other priorities to spend their money on if they have the choice.

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By EstherG
19th Mar 2015 19:47

If the self employed enter a 'PAYE' type scenario would this remove the 50% payment on account burden (which is a nightmare to explain!)?

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Replying to Accountant A:
RLI
By lionofludesch
20th Mar 2015 13:11

Oh yes !

EstherG wrote:

If the self employed enter a 'PAYE' type scenario would this remove the 50% payment on account burden (which is a nightmare to explain!)?

Clients just can't get that their tax bill is part of one payment, the whole of the next and part of the one after that - and why should they ? It's hideously complicated.

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Replying to Wanderer:
By petersaxton
20th Mar 2015 13:20

Me too

lionofludesch wrote:

EstherG wrote:

If the self employed enter a 'PAYE' type scenario would this remove the 50% payment on account burden (which is a nightmare to explain!)?

Clients just can't get that their tax bill is part of one payment, the whole of the next and part of the one after that - and why should they ? It's hideously complicated.

I don't get that either! Why is it three tax years? It's only two at the most.

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By Richard Willis
20th Mar 2015 10:29

Heard the news?

The on line agricultural grants system (? proper title) has just been abandoned as it DOESN'T WORK!

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RLI
By lionofludesch
21st Mar 2015 17:54

One tax bill, three payments

You misread me, Peter.

One tax year, three payments - including two part payments.

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Replying to frankfx:
By petersaxton
21st Mar 2015 19:25

Three part payments!

lionofludesch wrote:

You misread me, Peter.

One tax year, three payments - including two part payments.

1st payment on account, 2nd payment on account and balancing payment.

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RLI
By lionofludesch
23rd Mar 2015 09:01

Or .....

Part of one payment, the whole of another, part of a third.

I can't even explain properly it to accountants, Peter - what chance have I of explaining it to clients ?

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Replying to SUZIB:
By petersaxton
23rd Mar 2015 09:09

My effort

lionofludesch wrote:

Part of one payment, the whole of another, part of a third.

I can't even explain properly it to accountants, Peter - what chance have I of explaining it to clients ?

By 31 January you pay part of the current tax year plus the balance outstanding of the previous tax year.

By 31 July you pay part of the previous tax year.

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RLI
By lionofludesch
23rd Mar 2015 13:18

Yes but ......

Your bill for one tax year is part of a January payment, all of a July payment and part of another January payment. Two part payments and a whole payment.

So when the client says "What's my tax bill for this year ?"  you can never give him an answer that matches up with his bank statements.

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Replying to paul.benny:
By petersaxton
23rd Mar 2015 23:03

That's the case with plenty of transactions

lionofludesch wrote:

Your bill for one tax year is part of a January payment, all of a July payment and part of another January payment. Two part payments and a whole payment.

So when the client says "What's my tax bill for this year ?"  you can never give him an answer that matches up with his bank statements.

You issue a invoice A for £1,000 and invoice B for £600. You receive £1,600 payment.

If somebody asks what did you receive for invoice A? You can never give an answer that matches up with the bank statements.

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RLI
By lionofludesch
24th Mar 2015 13:16

True but .....

..... I've never been asked that question about invoices.

Tax bills on the the other hand -more times than I care to mention!

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By petersaxton
24th Mar 2015 13:31

Years ago

I used to help people with their bookkeeping after they got in a mess and a lot of times they didn't know which sales invoices had been paid and which sales invoices a certain payment related to. I would go through and analyse the sales ledger and sort it out. It usually was a lot more complicated than tax payments!

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