MP's are already well aware of the problems. In Jan 2016 some met with HMRC to discuss (make that contest) the proposals in response to the original petition and got no where. You can see them making their attempt online here: https://petition.parliament.uk/petitions/115895
Big Business does not make errors, that is like saying HMRC never make errors as it is big. Oh please get real with your thinking.
It is truly mind blowing to think such matters. The big difference is if you found a £10.00 error on a big business HMRC would let it go, but on a small business they want the tax on it and will argue to the bitter end and also ask for fines and penalties as it was clearly a careless error in every case for a small business.
Small business makes errors because they do, we all do, we are human.
Making small business using computer software or apps, will lead to more errors being made. Over the years one thing I did learn early on is never recommend software to a client unless they are good at keeping manual records or unless they really need it(ie a bigger than small business). As it normally leads to more errors.
Will small business be allowed to work at all to make some money and a living.
I feel so sorry for small business and how they are meant to cope with this change.
2) A lot of larger businesses and almost all accountants were already using computer software (as it is a lot quicker for processing the complex calculations that payroll require)
With going digital, you have :-
1) Millions of business/self assessment people now trying to use computer systems (if you actually acted or listened to these people you would hear their stories how they pull their hair out over computers or even doing book keeping, hence they use accountants)
2) Accountants will not be able to act as a 'gatekeeper' for many reasons as we currently do.Time being one of them, as you can bet that the quarterly tax returns will have to be submit within say 30 days!!
3) Software as accountants know, if you put garbage in your get garbage out
4) Accountants not reviewing clients entries, reposting disallowable accordingly (even items like personal expenditure, drawings and so on or lets say posting a profit and loss item to a balance sheet code)
Just a massive difference, how the government can provide state that x million businesses (when most is done by accountants) or how the can compare RTi to making tax digital just shows how much the government do not understand how small business normally operates and what small business does not want to do and to be honest how much people have problems doing anything 'financial/accounts'.
Sorry for the rant, I feel so sorry for small business if this comes in, really sorry for them. Many of them will end up with penalties and fines as a result and not spend time running their business. Red tape is killing small business.
I think any practitioner that has been on their own a while would struggle with employment. I don't think I could have anybody to report to again. It would drive me nuts.
I agree with that.
That said if I had my time again, I think I would have tried out industry (my heart and love used to be what I do, but the massive changes made by the government and the forever changing now and the changes on the horizon, I think I would have tried industry first....)
I also think employees are a hassle I never wanted, so was always happy to do the work myself.
I hope the Government will now admit that IR35 has been a waste of time and resources with the tax yield that has been generated from it.
This dividend tax gives them the excuse now to put this farce to bed.
I would suggest you read the budget, as IR35 is going to be 'amended', so sadly you are probably incorrect, I assume this means easier to apply by HMRC to 'catch' more people/contracts.
Also you may wish to look at the new travel/subsistence rules as well.
Also the changes in employment allowance (which no doubt will change in coming budget to restrict it further)
Along with the dividend tax which should raise 2 billion! and the 7.5% I would guess is just the start......(of course this will go up when corporation tax rates drop, not that I have read anyone else saying this, but I would imagine is 100% certain!!!)
The budget is basically very bad news for most small owner managed Ltd companies and is getting far more complex to apply.
It sounds like the figures/estimates involved may be very large, probably would have been picked up a lot quicker by HMIT before online fling, when HMIT actually agreed accounts.
Samantha, interesting to hear that this is not a sole trader and a large(ish) office setup.
Out of interest did the clients ever receive accounts, that they signed and returned to the accountant? (thus seeing the expenses figures etc)
Just interested to hear whether the clients were potentially aware of the over claiming of expenses or did they not receive any form of accounts from the accountant?
Frankie, Sage have been using the discounted price quote to me, for about 6 years, about 3 years ago I got them to put in writing to me that that years increase was to align me to full rates and then they still used the excuse this year(they just do not seem to care about customer care etc). I have just left their Payroll software to another supplier, with the other software being reviewed(accounts & corporation tax I use)
My answers
I wonder if this definitely also applies to companies/corporation tax ?
I am sorry but HMRC staff etc are employed by us via MPs.
Therefore if really MPs wished to stop this they can easily, the rest is just lip service.
Look at my actions not my lips.
Big Business does not make errors, that is like saying HMRC never make errors as it is big. Oh please get real with your thinking.
It is truly mind blowing to think such matters. The big difference is if you found a £10.00 error on a big business HMRC would let it go, but on a small business they want the tax on it and will argue to the bitter end and also ask for fines and penalties as it was clearly a careless error in every case for a small business.
Small business makes errors because they do, we all do, we are human.
Making small business using computer software or apps, will lead to more errors being made. Over the years one thing I did learn early on is never recommend software to a client unless they are good at keeping manual records or unless they really need it(ie a bigger than small business). As it normally leads to more errors.
Will small business be allowed to work at all to make some money and a living.
I feel so sorry for small business and how they are meant to cope with this change.
I just feel sorry for small business
RTi was mainly :-
1) Done by accountants for small business
2) A lot of larger businesses and almost all accountants were already using computer software (as it is a lot quicker for processing the complex calculations that payroll require)
With going digital, you have :-
1) Millions of business/self assessment people now trying to use computer systems (if you actually acted or listened to these people you would hear their stories how they pull their hair out over computers or even doing book keeping, hence they use accountants)
2) Accountants will not be able to act as a 'gatekeeper' for many reasons as we currently do.Time being one of them, as you can bet that the quarterly tax returns will have to be submit within say 30 days!!
3) Software as accountants know, if you put garbage in your get garbage out
4) Accountants not reviewing clients entries, reposting disallowable accordingly (even items like personal expenditure, drawings and so on or lets say posting a profit and loss item to a balance sheet code)
Just a massive difference, how the government can provide state that x million businesses (when most is done by accountants) or how the can compare RTi to making tax digital just shows how much the government do not understand how small business normally operates and what small business does not want to do and to be honest how much people have problems doing anything 'financial/accounts'.
Sorry for the rant, I feel so sorry for small business if this comes in, really sorry for them. Many of them will end up with penalties and fines as a result and not spend time running their business. Red tape is killing small business.
January will pass
I agree with that.
That said if I had my time again, I think I would have tried out industry (my heart and love used to be what I do, but the massive changes made by the government and the forever changing now and the changes on the horizon, I think I would have tried industry first....)
I also think employees are a hassle I never wanted, so was always happy to do the work myself.
NB January will soon be gone.
I would suggest
I would suggest you read the budget, as IR35 is going to be 'amended', so sadly you are probably incorrect, I assume this means easier to apply by HMRC to 'catch' more people/contracts.
Also you may wish to look at the new travel/subsistence rules as well.
Also the changes in employment allowance (which no doubt will change in coming budget to restrict it further)
Along with the dividend tax which should raise 2 billion! and the 7.5% I would guess is just the start......(of course this will go up when corporation tax rates drop, not that I have read anyone else saying this, but I would imagine is 100% certain!!!)
The budget is basically very bad news for most small owner managed Ltd companies and is getting far more complex to apply.
Thanks for the reply David.
It sounds like the figures/estimates involved may be very large, probably would have been picked up a lot quicker by HMIT before online fling, when HMIT actually agreed accounts.
Samantha, interesting to hear that this is not a sole trader and a large(ish) office setup.
Thank you.
David,
Out of interest did the clients ever receive accounts, that they signed and returned to the accountant? (thus seeing the expenses figures etc)
Just interested to hear whether the clients were potentially aware of the over claiming of expenses or did they not receive any form of accounts from the accountant?
Thanks Darren
Frankie, Sage have been using the discounted price quote to me, for about 6 years, about 3 years ago I got them to put in writing to me that that years increase was to align me to full rates and then they still used the excuse this year(they just do not seem to care about customer care etc). I have just left their Payroll software to another supplier, with the other software being reviewed(accounts & corporation tax I use)