I know it didnt cross George O's mind to even think of asking us before he made his announcement (thats coming later apparently) but does anyone have a view of the practicalities with regard to future submission of SME and sole traders returns?
Will we be wanted or will the taxpayers use an App to scan expense sheets etc before sending to HMRC?
Or will things stay the same for at least the first few years submissions?
Replies (13)
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Windscale Approach
There'll be no more tax returns because they'll be called something else.
It's a bit like there being no radiation leaks from Windscale after they changed the name to Sellafield.
Seriously, call it what you want, but, somehow, the taxpayer is going to need to give information to HMRC. It's always been called a return before, changing its name won't change its nature.
And prepopulation ? Yeah, great. As long as I can check it. Unlike - say, for instance - CIS payments paid on my behalf by one unconnected person to another unconnected person.
Heard it before with RTI!
No more
P46s under RTI - just complete 'new employee details'.
P35s under RTI - just do 12 / 52 / 64 of them per year!
No more annual tax returns will just increase the time for the Tax Payer & reduce it for HMRC.
Yawn.
@OP Why not just go read all the previous post-budget threads and come back when you have something new to add to the discussion. This has been thrashed through so many times and the bottom line is, nobody knows anything useful yet.
P & L accounts
SME's and sole traders will always need a profit & loss account on which to base their tax liabilities. Won't they ?
And adjustments for other income and capital allowances.
If not a tax return, what will they call that ?
I really wouldn't worry!
@OP In all honesty, and without melodramatics...
Do you honestly think you "normal" client is going to be able to comply with any HMRC and related filing without you?
Whilst I have some "dreamlike" keyed up clients, I also have some clients who, quite honestly don't know the "debit" column from the "credit" column on their bank statement. How on earth they're going to report it to HMRC without us, I have no idea.
To get rid of the requirement for accountants, HMRC are going to have to make things very simple and perhaps broadcast instructions on CBeebies.
How many of us remember Self Assessment coming in - that simplified everything didn't it???!!!
Even experienced bookkeepers struggle
I've been a bookkeeper for 30 years, doing sole trader and limited companies' books. I'm miffed if an accountant finds anything to adjust in my final accounts - apart from the CT entry and their own fee. But a few years ago I decided to stop submitting my own (small, very straightforward) limited company accounts because not only is it just about impossible for me to keep up with the details of changes in regulations (because I don't have a regular 'feed' from a professional body), but I couldn't even access some info on the HMRC site, it was only for 'agents'! Things like changes in the details of the format and various statements that have to go on submitted accounts. So now we have an accountant, who charges us a modest fee. From 'my side of the fence' I tell any small business to regard an accountant as an essential, not only for their expertise and advice, but because it's worth a decent fee not to have to deal directly with HMRC!
Exactly
I've been a bookkeeper for 30 years, doing sole trader and limited companies' books. I'm miffed if an accountant finds anything to adjust in my final accounts - apart from the CT entry and their own fee. But a few years ago I decided to stop submitting my own (small, very straightforward) limited company accounts because not only is it just about impossible for me to keep up with the details of changes in regulations (because I don't have a regular 'feed' from a professional body), but I couldn't even access some info on the HMRC site, it was only for 'agents'! Things like changes in the details of the format and various statements that have to go on submitted accounts. So now we have an accountant, who charges us a modest fee. From 'my side of the fence' I tell any small business to regard an accountant as an essential, not only for their expertise and advice, but because it's worth a decent fee not to have to deal directly with HMRC!
This sums matters up completely for any self employed accountant like myself. Great comment.
People don't need specialist help to fill in tax returns (any more than they need help to fill in any other form). They need specialist help to comply with tax regulation.
The point of no return...
I published this LinkedIn post on the subject in March:
https://www.linkedin.com/pulse/point-return-uk-tax-jon-martingale?trk=prof-post
My view is that it may help accountants shift to more regular client consultations and potentially better tax planning. And for those with simple tax affairs who DIY, it could become an even simpler process, which makes sense given many of these people probably just claim child benefit, have a bit of rental income etc...
I'm always curious to hear industry views though.
Regards
Jon Martingale
Reckon One UK
@jonmartingale
Pre population won't work.
I have just started a tax return for a pensioner and looked on the HMRC portal as an agent to see the "help" they give under "Information to help complete your (sic) tax return."
State pension for the year is £0. ! This client gets a state pension, attendance allowance and pension credit. If they can't get this first bit right what chance of them getting even the information they know right in the future.
Looks like accountants are going to be needed more to just check HMRC errors or there will be a scandal of HMRC collecting too much tax!