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Lisa-Blue

Digital tax accounts will benefit bookkeepers

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28th Sep 2015
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While many accountants are preparing to count the cost of the end of yearly tax returns, HMRC’s introduction of digital tax accounts could well offer benefits to bookkeepers, says Malcolm Trotter.

Although we’re unlikely to see many changes to the accounting landscape during the first stage of rollout when taxpayers will be given online access to their accounts information, the proposed linking of bank accounts and accounting software will inevitably have a significant impact on both accountants and bookkeepers.

The real-time filing requirements are meant to reduce the administrative burden on both HMRC and taxpayers. However, in actual fact this simply means that the information delivered to and recorded by HMRC needs to be consistently checked and verified to avoid the very real possibility that a taxpayer could be overcharged and the funds automatically debited from their account.

This need for verification means that more demand is likely to be placed on the bookkeeper to ensure that the financial information held within a tax account is accurate. They will continue to be needed for weekly or monthly completion of financial records, accounts, VAT returns and payroll.

Malcolm Trotter, chief executive of the International Association of Bookkeepers explained: “While it might be naturally supposed that automation would be able to reduce work by producing and submitting calculations, I would in fact perceive the potential for bookkeepers’ work to actually increase, as more businesses look to them to ensure everything is correct in real-time.”

Accountants and bookkeepers agree however, that for taxpayers who are unfortunate enough to have overpaid, there may well be a considerable delay in recouping their money. “At present, I would say that the bookkeeping and accounting professions do not yet have sufficient confidence in HMRC as regards executing refunds in a timely manner”, says Trotter. “Therefore, getting the tax right becomes even more important, and most businesses will realise that they need to rely on the support of the bookkeeper to maintain the accuracy of the information held within the account.”

Malcolm Trotter is chief executive of the International Association of Bookkeepers.

Replies (5)

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By carnmores
28th Sep 2015 19:13

is Malcolm related to Rodney
Perhaps we can rename his organisation TITCO, bookkeepers are not renowned for their tax skills this is more of a job for accountants, nice try tho

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By Sheepy306
28th Sep 2015 19:50

So is Mr Trotter really telling all his members that every business will be reporting their accounts to HMRC on a real time basis each month? Because that's the impression that this article is giving me.
I thought the linking of bank accounts with HMRC was entirely to pre-populate the SA returns with interest figures , not to give estimates on turnover, profits and tax. Certainly in the short-term.

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By mabzden
29th Sep 2015 10:27

Maybe...

There are a few people out there who are holding themselves out as saviors of the world once digital tax accounts come into effect. All we'll ever need in life is an online accounting package - and obviously an international bookkeeper - and this will solve all our financial issues, locate Lord Lucan and lead to an outbreak of world peace.

Hmmm... OK.

That said, I suppose there could be more need for real time reporting, particularly for self-employed people claiming in-work benefits. It would make sense to roll this into the DTAs.

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By mtrotterifa
30th Sep 2015 16:35

Online tax accounts

Reference your comment Sleepy, you are quite correct as regards the short-term, but what I was also pointing out was the end game as stated by HMRC - full automation of data uploads between the accounting software of an entity and HMRC/the online tax account. It may well not stop there - with the potential of electronically linking sales made in real time and the tax system to calculate VAT without human intervention. If you are in any doubt about where this may end up then I suggest you take a look at other countries - Australia for example: http://www.digitalfirst.com/ato-to-automate-4-5-million-individual-tax-r... . Denmark some time ago implemented automation of benefit entitlements based on automated income data. In the UK, with RTI already in place, this is all potentially possible in the near term - albeit with significant challenges and potential for error. Hence my assessment that bookkeepers (and accountants and other tax professionals) will be far from redundant - but even more important to ensure data is correct before being uploaded as well as reviewing and challenging calculations and tax bills. Whilst personal taxes may be first, it is just as possible for business taxes to also be automated and in real-time or at least monthly. Australia (again) has required monthly business tax calculations for some time now and only a few steps from automating.

 

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By samiur
03rd Apr 2017 16:19

Dear Sir,

Good afternoon.

Could any one explain me what does it mean Part-Qualified ACCA ?

Kind regards

samiur Rahman

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