Digital disclosures launch in April

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HMRC’s digital crusade continues unabated, with the latest addition to the tax authority’s digital first administration, the Digital Disclosure Service (DDS), launching in April this year.

HMRC has said the aim of the DDS will include a number of features for those who are disclosing, including a mechanism where they can upload documents for the taxman to see digitally. This, said HMRC, will eliminate the need to send them by post.

The DDS also seems to be the latest ploy in HMRC’s ongoing mission to interact with taxpayers more directly, leapfrogging agents. “The DDS will calculate the omitted tax and late payment interest; this should help reduce the need for tax advice for low income groups”, said Rebecca Busfield, partner at Watt Busfield tax investigations.

Reacting in a blog to the DDS's impending introduction, accountancy firm Ormerod Rutter took a cautionary tone: “According to HMRC, one of the benefits of using the DDS is that it removes the need for taxpayers to seek advice and help from their accountant, allowing them to disclose by themselves if they so choose – but this might not be the best way forward”.

Busfield agreed with Ormerod Rutter's caution. Cases where the circumstances or facts are complex and may need more explanation should avoid the DDS, she explained. “HMRC will expect a full disclosure of all irregularities, and it is important to make sure that taxpayers take care and have checked their records to make sure their disclosure is accurate and complete.

“HMRC will check the disclosure with third parties or against results of other businesses in the area to make sure it appears reasonable.”

An important caveat is that the DDS will not give immunity from prosecution for serious tax fraud, unlike the contractual disclosure facility (CDF) option.

Clients using the DDS also risk missing out on available tax reliefs and, said Busfield, “widening the scope of the investigation too far.

“Given the cutbacks to HMRC resources”, Busfield continued, “it may be difficult for users to access appropriately trained HMRC staff, and it likely that taxpayers will have questions about using the service.”

HMRC will also be launching a separate disclosure facility for disclosures related to offshore income and gains.

Francois Badenhorst
Practice correspondent
Sift Media
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03rd Mar 2016 12:01

“According to HMRC, one of

“According to HMRC, one of the benefits of using the DDS is that it removes the need for taxpayers to seek advice and help from their accountant.

As the Ms Rice Davies might have said: "Well, they would say that, wouldn't they!"

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By ricktay
03rd Mar 2016 12:11

Agents/

From HMRC's perspective (it seems), anything that distances a taxpayer from their agent / advisor is a good thing. If they wanted to reduce professional input, they might want to improve their own accuracy (PAYE Coding etc etc etc).

Their marginalisation of agents is evident through the whole digital project. Worrying......

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03rd Mar 2016 13:04

What do HMRC think accountants do?

The average tax payer is at best advised by the man down the pub in the absence of an accountant.  Even explaining payments on account is a challenge for the average client, never mind the rest of the tax system.  Those who try to go it alone invariably come a cropper and they need proper advice.  It is a scandal that could end up affecting clients badly.   HMRC should not be attempting to insert their own 'expertise' and sideline the accountancy profession.

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By mwngiol
03rd Mar 2016 13:07

HMRC logic

I guess HMRC's logic is that unrepresented taxpayers are easier targets. So the more they can persuade people not to bother with accountants, the more they can pressurise/bully.

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03rd Mar 2016 13:19

Disclosure Only?

This is about disclosure, right?

Not Self Assessment or the new quarterly returns.

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03rd Mar 2016 13:37

Much ado about very little

Despite wholeheartedly agreeing with agents being marginalised by the new HMRC digital services (roll on AOSS....) my take on this is that it is just HMRC creating a new method of disclosure which they can direct their customers towards where necessary.  In fact by not having something of this nature it could be argued that HMRC are currently missing a trick, which is a consequence of the elimination the Local Enquiry Centres.

I cannot imagine existing (represented) clients using DDS so perhaps it would only ever affect the high street accountant by giving unrepresented taxpayers who need to make a disclosure a chance to repent online instead of either going to an HMRC office (which is no longer possible) or coming to an accountant.  And how many clients like this do we see every year?  Very few to none is my experience.

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By DMGbus
03rd Mar 2016 13:43

Accountants role

An accountants role to is to help a taxpayer get their tax affairs right.

Recent example:   

Taxpayer uses Xero with bank feeds and purchase invoice feed into Xero from scanned invoices sent to ReceiptBank.No problem with Xero itselfContinual errors with ReceiptBank miscoding / misallocating invoicesAccountants role consequently needs to include = identify and put right ReceiptBank errors and ensure that Xero records are correctResult = compliance with tax lawsAbsent of using an accountant the taxpayer would be getting their tax liabilities wrong

The above is a true real world example, with a fairly knowledgable taxpayer who can "see the light" and uses professional accountants rather than follow some concept or notion of HMRC that the only way is digital and no need for mischevious accountants - probably dreampt up by fresh from college / lack of experience youngsters in HMRC - youngsters who are quite likely constantly using Facebook, Twitter, Linkedin etc in working hours - effectively drug addicted to apps / smartphones and consequently think that's the only possible way forward.

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03rd Mar 2016 15:41

I don't think they will ever understand and probably don't want

I continue to be amazed that HMRC believe that self employed and small companies want to do this filing and keep there accounts up to date.  I have recently had to register a small limited company for VAT and PAYE.  A simple enough task but I had to use their Govt Gateway (the fact they had one was a minor miracle) to do it and this is something we will not be able to do in future and there was no way my client wanted to do it.

Most small businesses just don't want to be involved and that is why they come to us.

No doubt the "big boys" who are liaising with HMRC do not see this as a problem as their clients have enough qualified staff to manage these "mundane" tasks.

The more I read the more I see disaster looming!

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04th Mar 2016 02:01

Is this just a smoke screen?

Here we have an organisation that is at best not fit for purpose.They still cannot answer the phone and answer a letter!

As an accountant I spend 30% of my time correcting HMRC errors and my clients do not want to deal with HMRC as they do not trust them - rightly so in my opinion.

I am beginning to think that all this digital pie in the sky is a way to take away the scrutiny of their abject performance from MPs etc.

Without acountants how will they cope? They are hopeless now and getting worse.

Tax is VERY complicated , it need not be but successive Chancellors fiddle with the rules and attack SMEs because they do not have the capability to deal with the Googles etc

What is tragic is the total lack of response from the Institutes .where are they. They should be defending us but all I see /hear is silence.

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04th Mar 2016 09:31

It's been HMRC policy for a while...

...to try to get small businesspeople to be unrepresented.  Was talking to another agent only a couple of weeks ago who'd come across small business owners where the Revenue had advised them that they don't need an accountant, because that's just an unnecessary cost.

These people just can't be trusted.

 

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04th Mar 2016 14:02

Have you got an agent?

wilcoskip wrote:

Was talking to another agent only a couple of weeks ago who'd come across small business owners where the Revenue had advised them that they don't need an accountant, because that's just an unnecessary cost.

These people just can't be trusted.

After I had attended the HMRC agent's consulting meetings a few years ago, and their forecast staff reductions, I predicted that the HMRC helpdesk would frequently say, "Have you got an agent?".

Can they really staff their intentions?

 

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05th Mar 2016 12:28

The Bill

isn't this rather like a policeman reading someone their rights , and adding: "And of course, you can save money by not hiring a solicitor?"

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04th Mar 2016 10:12

.

Hmm, sounds like they are just outsourcing the scanning department at HMRC and bolting on some auto-computations which will be a bit flakey, just as HMRC's computations are now, or used to be 'back in the day' when local tax offices existed.

I don't see this is any real change, its just a channel to move data. 

However when it become compulsory (like everything else slowly does) it will exclude a large number of users and make life harder for unrepresented tax payers having to battle with horribly complex interfaces.

More jobs for the accountant I would suggest.

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04th Mar 2016 11:01

HMRC & digital disclosure

As we all know, as and when HMRC introduce DDS it won`t be user friendly to the non professional, it will probably result in more errors by HMRC and eventually we accountants will be called upon to undertake the follow up appeals and corrections.

If HMRC are really trying to help the SME reduce accountancy costs why not increase the competency and number of staff on the helplines.

No doubt some bespoke software company will make a fortune selling this DDS package to HMRC.

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07th Mar 2016 09:55

Please tell me ....

Please tell me its all scare mongering, I starting to get worried. 

 

 

Extract Above

“HMRC will check the disclosure with third parties or against results of other businesses in the area to make sure it appears reasonable.”

 

Which third parties??

 

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