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HMRC aren’t listening – no change there then!

22nd May 2016
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The biggest shake up of the tax system is only a few months away and we don’t know anything about the process except that quarterly submissions will be required as from 6 April 2018. I know Accweb members have been venting their anger onsite but nothing appears to have been forthcoming from the Institutes. They should be stamping their feet in annoyance and insisting on more openness. Everyone just says 'wait and see'.

Months did I say? I met Tony Margaritelli  (ICPA) at Accountex a couple of weeks ago and he told me that in his view it was months – he said to take until now to Sept out of the equation for the referendum, holidays and the 'consultation' (for that read: 'this is what we are going to do – like it or lump it'), Dec 2016 and Jan 2017 also out for the current pain of annual return submission, July and Aug 2017 again for holidays and the same for the Dec 2017/Jan 2018 months and you are left with about 14 months. Less at least a couple of months trying to explain and get clients to understand the new process and accountants are left with about a year in which to implement processes to accommodate the new system. Staff will also need to be advised and trained.

A couple of years ago when it was worthwhile taking a day off to attend a Working Together meeting as it was a real 'face to face' meeting, one forward thinking accountant accused HMRC of 'doing our work' and 'becoming teachers in tax.' The HMRC lady presenter of course denied this but his foresight seems to be coming to fruition.

One place where some bits of information can be gleaned is at the webinar's that HMRC present – 'Talking Points' - but the problem with non 'face to face' is that the question asked is easily ignored.

Here is an example of a question that received no reply:

Audience Question:

'On the notes it says that you will be decommissioning the paper form 64-8.  How will clients that currently only use paper forms be able to confirm that we are their agents?  We look after a large clientele of Disabled and Elderly clients who don't have access or ability to authorise us online.'

Again whilst going round Accountex, as we don’t know what is happening, you can't assess which software is the best to use. The software providers are keeping calm but one told me that they work at least 18 months in advance of the tax year beginning date so things are looking increasingly tight for them. Steve Checkley's Taxcalc blog is where some interesting up to date information is to be found.  Should those clients who do understand what a smart phone is and how to use it be practicing sending scanned receipts to accountants? Should those who haven’t got round to getting a smartphone yet be advised to do so? But why should they if they don’t want to or can't afford to?

I recently spoke with an HMRC IT person who is working on the Digital Strategy project and he said that many at HMRC are very worried – not least for their jobs. HMRC's union are already making noises. The IT person asked that I and other accountants write to our respective MP's saying that this is being brought in too quickly without any real consultation and to rethink. 

Those who do to take up this suggestion should quote Rebecca Cave in their submission :

https://www.accountingweb.co.uk/tax/hmrc-policy/software-required-to-acc...

HMRC acknowledged that Making Tax Digital will be as fundamental an alteration to tax administration as the change to self assessment. For those of us who worked through the move to SA, which also involved a change from the prior year basis to current year basis for the self-employed, the move to digital tax accounts and quarterly reporting appears to be indecently rushed.

>>> but there again what is the point of wasting time and postage? (Forget email as no govt department responds) – they won't listen.

The timetable is already behind due to the referendum. But after that is over be prepared for a flood of consultations and BETA testing – all in the summer holiday months. According to HMRC's schedule two consultation documents should have been issued already– the main one titled: 'The scope and operation of more frequent reporting of information by businesses to HMRC using digital tools' and the other being 'The consultation on third party information'. The one on 'Simplifying HMRC's tax administration' is due before the end of June – not much hope of that being ontime then.

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Head of woman
By Rebecca Cave
25th May 2016 09:23

Well said Jennifer, and thanks for quoting me. On reflection I feel the move to making tax digital will be more disruptive than the change to self-assessement - it's more like the introduction of PAYE.
The timetable that envisages all buisnesses who pay income tax to start quarterly reporting from April 2018 is totally unrealistic. HMRC haven't even told us what data should be reported yet.
Note "told us". I agree that the consultations are likely to be: "This is what we want - how will you (tax agents) help us deliver it"

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