I agree - I've got a couple of clients who have been threatened by the outsourced debt collectors but never enforced.
One in particular now owes over £80k, has a salaried job as well as self employment - so the debt goes up every January and July. Hasn't paid any SA tax for 4 years.
He has rental property, quite obvious from the tax returns, he could and should be forced to sell it.
He is in this mess purely because he chose to buy a house he couldn't afford, has no dependants either.
Yet I've had other clients driven to despair over quite small amounts of tax and struggling in very difficult circumstances - either ill health or family difficulties.
My client has just had a closure letter for a year that wasn't under enquiry and they've overcharged him by £552 in their calculation - having decided 2 short PAYE engagements were missing from his return, they've added both incomes and deducted one of the tax deductions only
They have now referred to technical to re-open the enquiry, correct it and then reclose it - for the right year.
Shambolic is what they are!!
I just tried to retrieve and pre-populate a return for another client with employment income - which I know has been submitted as we do the payroll and did all the year end stuff weeks ago - no information available - but let's drive on blindly with MTD!!!
I've had 2 calculations this week with the Class 2 NI which I included with the SA calculation now removed. Others earlier have rightly included it...................
And they want to press ahead with MTD - they can't even get the basics to work now
Let's hope they take notice, well done Rebecca Benneyworth - most of my client base stand with her taxi driver!!
DIGITAL TAX RECORDS
I have a client who just attempted to use QuickBooks - she is in the film industry and has no idea that when you press the button to put in an entry, there is another half to the process (we learnt it as double entry bookkeeping!!!!)
It's a small business and it took one of my staff 3 days to unravel the pickle she'd created
The government have absolutely no idea what non-numerate business owners already have to contend with just earning a living
Excel is (as I recall) a perfectly good way of keeping accounting records, as is a good old fashioned analysis book.............and I thought the law said you have to keep adequate accounting records - are the government going to make a law then that accounting records must be digital?
Digital tax accounts
I accept that businesses that are office based and with full accounting software, quarterly reporting might be feasible albeit yet another burden.
However, think of the people who are working away from home in remote locations, for example in the film industry. Probably 6 days a week, 16 hours a day and possibly without internet apart from a once a week return to a base hotel. If they are VAT registered, it will almost certainly be in the Flat Rate Scheme and they will probably be able to access online bank accounts and get remittances electronically - so can cobble together a VAT return that is reasonably accurate. As for their expenses - well that's hardly going to be a priority on their one day off a week.
All of us in the profession know that clients start the year with the best of intentions and then actually running a business and earning a living takes over - so I can see this as nothing other that a government cash cow for more penalties.
The clients would be no more able to do digital tax accounts than they are to do annual accounts - so are they to pay accountants 4 times as much???
Sadly this is the brainchild of salaried office based people working regular hours and getting paid holiday, sick pay etc who have absolutely no idea how hard it is to be self employed. generate the work, get it out on time, get paid for it, do the admin (and no doubt sweep the floor at the same time!!!)
Long live Geraint Jones - he's a fine chap!!
I've planned a battery recharge week for the middle of January to get me through - albeit surrounded by work. Monday I'm having an hour of Reiki; Tuesday I'm going to my aqua calss and out to dinner; Wednesday I'm having my hair done and going to Pilates and Thursday I've booked a facial and lava stone massage - if that doesn't get me through to the end of the month, nothing will. Happy accounting one and all.
Companies being struck off
I've been ranting about this one for ages - the herding of small businesses and sole traders towards incorporation by the incentives of Gordon Brown some years ago has opened up these easy possibilities. Form a company, take low salary and "drawings" supposedly dividends, but probably no calculations to see if profit is actually available, from company; ignore the warnings from Companies House and they'll just strike off your company for you. There's no assets - company will be what should be a sole trader or small partnership providing services, certainly little or no money in a bank account.
Job done - no insolvency costs either.
If Companies House think that the threat of strike off is a threat at all in these cases they are not even on the planet. This is a "thankyou very much" you've just let me walk away from a shed load of tax - and probably accountants fees to boot.
There should be a significant minimum capital requirement to form a Limited Company, something in excess of £25k - now that would be a deterent. Thousands of small Ltd Companies are formed purely for the tax saving of taking low salaries and the rest as dividends - not for commercial reasons at all.