Could anyone confirm when a director/shareholder(PSC setup say) with a low PAYE earnings and high dividends(say £35000) will have to start using MTD, would this now be April 2019 ?(the document does not actually say the date secondary income would become under MTD)
I think what is really important here is did the client understand what HMRC meant by 'idle time' (not a phrase I have come across before with regards to taxi drivers) and business mileage.
He could have thought that HMRC were thinking about the mileage was not all business and hence why he said 100%. It could be that all his mileage is business and therefore all motor expenses allowable(apart from maybe a very small private usage) but maybe he was only earning money for 50% of the business mileage(no saying this could be true or not).
However as you would expect not all his time/mileage will be taking fare paying customers.
After seeing how the clients answer these questions, take it from there. Alot of the time they do not fully understand the actual question being asked.
A frank conversation needs to take place tbh.
Would I act for said person, no I would not take on an investigation that someone else prepared he tax return for. It maybe that he is better going to a specialist.
I really feel sorry for small business, if HMRC really believe that video.
So much red tape and time lot for small business.
Not to understand how bad computers/technology or even form filling are for most people. To be honest I hate completing one off forms(like bank forms, business rate forms, pension registrations, annual business forms etc), which I see/hear echoed by many clients.
I personally think MTD will mean more errors made. This is backed up with proof, oh how many errors need to be corrected by accountants when preparing annual accounts and MTD will mean more people doing their own returns, which by definition must mean more errors made..............
HMRC will want the digital tax accounts pre-populated with interest and dividends. This will be done by requiring companies to file electronic CT61's on an RTI basis.
I have thought this to, the amount of time that will be spent, yeek!
I do not increase fees, do not see the need for it really.
I process all I can before January, chase clients normally around July then October and then January for tax returns. For year ends for companies I chase the day after the year end and a lot or done very promptly.
So as percentage probably have about 10-15% of all returns to do in January which is like a normal months work load for me.
As a professional and a better person and someone who trusts others,
I would on this case, just send in the tax return. It is not going to cost you anymore time/money. Think about that, as you have already done the work........
Then see if he pays, if he does not you could then disengage and take it as a life experience.
If you do not like people not paying you, then learn from it and ask for money up front in future.
Myself on the other hand, would just say that's life and move on, life is to short. I have been hit for plenty of bad debts over the years but still lived and made a good living. Just see it as part of running a business and trusting people (treat others as you would expect to be treated yourself. i(ie. I would not expect to pay up front myself)
You may wish to read Sean Reed vs HMRC 2011.....and the well know Horton v Young
but you may also wish to read Hanlin v HMRC 2011 just in case it is applicable to you.
Will really depend on whether he is an itinerant trader or not, read all you can on the matter, as he may not be or it maybe he is, can not say from the above
I am firmly in the, don't grow more but it is very much a personal choice.
I never wanted the grief of employees or 'build a big business or empire', so I stopped taking on clients when I got to my limit(working about 100-110 hours was the limit in about 2006, and I would say don't go there either!!).
You will still get client recommendations to replace any client ceasing etc, so you are able to 'stand still' if you wish to.
My answers
Could anyone confirm when a director/shareholder(PSC setup say) with a low PAYE earnings and high dividends(say £35000) will have to start using MTD, would this now be April 2019 ?(the document does not actually say the date secondary income would become under MTD)
This post made me look at Ubers website and according to the website the taxi drivers supply their own vehicle at the drivers expense etc.
Interested to hear if this is the actual case and how that links in with being PAYE ?
I think what is really important here is did the client understand what HMRC meant by 'idle time' (not a phrase I have come across before with regards to taxi drivers) and business mileage.
He could have thought that HMRC were thinking about the mileage was not all business and hence why he said 100%. It could be that all his mileage is business and therefore all motor expenses allowable(apart from maybe a very small private usage) but maybe he was only earning money for 50% of the business mileage(no saying this could be true or not).
However as you would expect not all his time/mileage will be taking fare paying customers.
After seeing how the clients answer these questions, take it from there. Alot of the time they do not fully understand the actual question being asked.
A frank conversation needs to take place tbh.
Would I act for said person, no I would not take on an investigation that someone else prepared he tax return for. It maybe that he is better going to a specialist.
Oh my that video is amazing. :shock:
I really feel sorry for small business, if HMRC really believe that video.
So much red tape and time lot for small business.
Not to understand how bad computers/technology or even form filling are for most people. To be honest I hate completing one off forms(like bank forms, business rate forms, pension registrations, annual business forms etc), which I see/hear echoed by many clients.
I personally think MTD will mean more errors made. This is backed up with proof, oh how many errors need to be corrected by accountants when preparing annual accounts and MTD will mean more people doing their own returns, which by definition must mean more errors made..............
I fear this to
I have thought this to, the amount of time that will be spent, yeek!
I do not increase fees, do not see the need for it really.
I process all I can before January, chase clients normally around July then October and then January for tax returns. For year ends for companies I chase the day after the year end and a lot or done very promptly.
So as percentage probably have about 10-15% of all returns to do in January which is like a normal months work load for me.
Learn to manage the work and it is not a problem.
As a professional and a better person and someone who trusts others,
I would on this case, just send in the tax return. It is not going to cost you anymore time/money. Think about that, as you have already done the work........
Then see if he pays, if he does not you could then disengage and take it as a life experience.
If you do not like people not paying you, then learn from it and ask for money up front in future.
Myself on the other hand, would just say that's life and move on, life is to short. I have been hit for plenty of bad debts over the years but still lived and made a good living. Just see it as part of running a business and trusting people (treat others as you would expect to be treated yourself. i(ie. I would not expect to pay up front myself)
Hope that helps.
You may wish to read Sean Reed vs HMRC 2011.....and the well know Horton v Young
but you may also wish to read Hanlin v HMRC 2011 just in case it is applicable to you.
Will really depend on whether he is an itinerant trader or not, read all you can on the matter, as he may not be or it maybe he is, can not say from the above
Hope that helps.
The update HMRC quarterly is rather worrying and hard to imagine how this could be done for most self employed/Landlords persons.
If when they say businesses this includes Ltd companies, this then is very scary and can not see how it would work in the real world.
Shame it was sold as getting rid of an annual return, only to be replaced by quarterly returns, shocking lie..........
I am firmly in the, don't grow more but it is very much a personal choice.
I never wanted the grief of employees or 'build a big business or empire', so I stopped taking on clients when I got to my limit(working about 100-110 hours was the limit in about 2006, and I would say don't go there either!!).
You will still get client recommendations to replace any client ceasing etc, so you are able to 'stand still' if you wish to.
Small and simple is great.
Hope that helps.