Appears he iis going to scrap then and move to a pay as you go system for the self employed.
I bought this up last year here as it was all to do with universal tax credit and was shor down.
Not sure how he thinks it'll work but then again he's never has any idea about the real world
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I cannot believe
that anyone with even half a brain can think that this is a good idea that can possibly work.
well clearly someone does...
but GO has never come across as someone who is lives on the planet most of us do
Are we likely to know ...
... before the election, whether the Labour party would be committed (or even just inclined) to continuing the process started by Osborne?
With kind regards
Clint Westwood
So are they saying that everyone will have a digital tax account - not just those who under the current rules have to submit a tax return?
"Of course, taxpayers will
"Of course, taxpayers will still be responsible for ensuring their
tax bills are right and telling HMRC about information that is not
reported by other means. But digital tax accounts will make this
much easier, quicker and simpler"
Is this not just effectively enrolling everyone for Self Assessment?
Having read the report that cparker gave the link to it seems that we'll be doing much of the same stuff, just in a different way.
I guess the challenge is to turn this situation into an opportunity some how.....
I agree with you Chris
When I turned on my car radio this morning I was greeted with the headline "completion of annual tax returns to be abolished"!! Not quite the case as it turns out.
I welcome some aspects to this.
Clients can right now register to have digital access to their SA account. And if more of them did so I might be slightly less inundated with inane queries from clients for which they will expect me not to charge a fee, as being "general client maintenance", such as "Just remind me what I have to pay tomorrow, please? Never mind that you have told me twice already and I happen to be asking just at the time when you have about 100 tax returns to file".
I would much rather be spending my time giving clients advice that can only be provided by someone with years of experience, rather than filling in my time by filling in forms that clients are perfectly capable of completing for themselves and only want to pay a pittance to have someone else do, while I in turn sit at my desk longing for the comfort of the grave.
And with a bit of luck we will be able to get R40 repayments processed more efficiently as well. Not being able to file them online is really Jurassic.
With kind regards
Clint Westwood
This is what happens when you get carried away
http://www.theregister.co.uk/2015/03/17/big_data_reveals_that_65m_americ...
When morons think using information online will solve problems.
Best way
I'm sure there's going to be consultations and changes to the theory of how they are going to get rid of the "tax return" but there may be lots of exceptions allowed to remain.
To avoid a nightmare of exceptions and people not knowing whether they are coming and going it would be best that all transactions are submitted to HMRC.
Most cloud bookkeeping software has attachments which show the relevant documentation for each transaction. QuickBooks desktop has the same attachments. I am sure Sage and the other desktop software can introduce the same.
Businesses who don't have bookkeeping software would most likely only have a relative few transactions every month and they could either enter transactions and attachments individually into HMRC software or import via spreadsheets. This would give HMRC an easy method of reviewing the data to see whether it correct - obviously only on a sampling basis. HMRC could also check a small number of taxpayers by visits.
VAT could be calculated on the same basis so avoid the need for VAT returns.
This submitting of transactions monthly could be extended to property rental income, capital gains and other miscellaneous income and allowances.
There may be less need for an annual tax return. Most people who will drop out of the system should have been dropped out of the old system anyway.
The rest will have a lot more onerous regime. This will involve an increased risk of fines. I wouldn't be surprised if HMRCs "income" would be an increased proportion of penalties and less tax, etc.
Even my best clients struggle to keep up with their bookkeeping so the big problem will be submitting accurate information on a timely basis. Can it be done?
ESC A19 field day?
Creepy Big Brother, but taxpayers will now see for themselves what we've been telling them about HMRC using data fed from other organisations. So not a massive change.
Will taxpayers retain understanding of their responsibility for correct information when presented with a pre-populated calculation? Taxpayers are not the best checkers - even of calculations prepared by their accountants. Nor do they check the P2s they receive "pre-populated". There is a layman' assumption that the authorities get it right, until something looks very clearly wrong.
Many more ESC A19 cases?
Tax returns to go? No chance.
Tax returns to go? Yes and pigs fly. You will still have to report income and claim expenses and that is a tax return. Monthly (Oh no the flood of work!) or annually.
Pre-populating a tax return or "account" with data gleaned from PAYE records has been around for about 8 years in one so called 3rd world country so nothing new and great. However if HMRC pre-populates and you then have to write to adjust (that is when estimates have been used or incorrect - most likely) good luck. It takes HMRC 3 months to load up the letter you send so the responsible person can read it.
In that 3rd world jurisdiction all interest had to be reported in electronic format to the tax authority by banks and institutions and a further legal requirement to give the client a formal (legislated layout) tax return of interest. Worked well and no worries about eldery clients forgetting their interest income to declare or companies. Again prepopulated on the returns so you could check accuracy at the revenue office.
Catching tax dodgers? All directors and self employed had to declare their assets at cost each year. Revenue checked houses and cars and listed shares electronically and using a living standard (modest) to check year on year changes and hey presto was catching people out big time.
HMRC does some things well but boy are they inefficient and need to look at other jurisdictions for a bit of advice. Making the tax simpler and all joint up would be a start. But like hoping for a Lotto win its but a dream.
The Utter Myth of "Big Data"!
Core problem is, in all this, Gideon and Dan the Man Alexander (Who are similarly in terms of real business and the "Real Economy" on Main Street, clueless buffoons), have been seduced by young whiz kid consultants working for "The Usual Suspects" and have been bewitched by the current dreams about Big Data, Data Mining, and massively powerful interactive data bases.
As those of us who have worked, significantly, on IT areas know, System Integration aint easy! Indeed, trying to merge data between, say SAP and Oracle requires serious and complex effort.
The amusing reality is based around simple facts: politicians, comfortably ensconced in their Ivory Towers suffer an essential disconnect from reality. Circa 50% of private sector GDP emanates from SMEs: and a vast majority of SMEs are Micro-Sized or Class Size Zero business; and a majority of these are One Man Bands; the eponymous plumber, jobbing builder etc, who pitches up at his accountant's office, clutching a Walker's Crisp box, stuffed with bits of variegated papers, two weeks prior to January 31st!
Online? Accounting Software? Don't make me larf! Most are quasi-literate and innumerate: Hell's Bells, they cannot even comprehend the core difference between revenue and capital items! Education has failed: dismally; they, Government ought to know, surely?
Yet Gideon and his cronies seem to believe these bozos could handle quarterly and eventually monthly reporting!
OK: so Government would say, as always "Ask an accountant!".
Well, how will they pay viable fees? They already whine about quite reasonable charges!
It is clearly about time our professional bodies grabbed Government by the scruff of their turkey necks, shook 'em soundly, and re-educated them into the real facts of economic life.
Don't hold your breath, however: most are far too busy, smoozing with plcs and ministers...............