Aren't we supposed to be changing the year end to align with either 31 March or 5 April? I have several clients whose year end is 30 April through to 30 September- going back to the PYB (prior to SA for you young ones)
Before the days of self assessment estimated assessments were issued. If the estimated profits were lower that the actual the tax payer would pay the amount HMRC calculated. When that happened they would invariably raise a further assessment with a much higher estimate which was invariably higher than the actual figures. I don't see why they can't do this now.
HMRC admitted this week they have no idea how much revenue is being lost to overseas tax havens.
In a freedom of information (FOI) response, the tax authority said they didn’t know – and hadn't attempted to calculate – how much tax is being evaded by UK residents funnelling their wealth offshore.
At the same time new figures shine a light on the scale of the problem: £570bn is held by UK residents in financial accounts in tax havens.
Why are they wasting their time on MTD rather than the above? Answer - I think because it's easier for them.
Some years ago my OH met a man who was head of restoration at the British Library. When asked what he knew about book restoration the answer was that he didn't need to. His job was to supervise the restorers who did know.
It seems to me that few, if any of HMRC staff in the higher echelons are accountants, just administrators who have no idea how small businesses work.
About 90% of my clients are artists/craftspeople. Some of them are capable of completing a spreadsheet and I provide them with a template. Some will even get a degree of satisfaction from successfully completing one. Some cannot get their heads around paperwork and are happy for me to do it all for them. To my mind their time is better spent in creating their artworks rather than agonising over paperwork. Some really do agonise and they are relieved to have the burden taken from them. Their income is irregular and often dependent upon timing of exhibitions but they do know how many sales have been made or the value of any commissions.
Back in the 80s all the assets the partnership (top 3) that I worked for had were leased - buildings, furniture computers etc. This was to avoid complicate calculations every time there was a change in the partners.
During the time I was there, there were 3 mergers and the partners in those firms owned their buildings. Every time one of those partners retired the buildings had to be revalued and and reapportioned amongst the remaining partners. It was fascinating work but sometimes a nightmare.
If HMRC could get their Fetch system to work properly it would be a great help. Yesterday I "fetched" a client's data. She has two NHS employments. The gross salary and tax for one employment was shown correctly. For the other just the tax deducted was shown. No gross salary. The only other figure was total earnings qualifying for Class 1 NIC of approximately £35k. Her combined salaries amount to just under £50k. Luckily I did have her P60s.
How can we trust them when their systems make mistakes like this?
I failed one paper in Part 2 of the ACAEW exams back in the early 80's. It was called Elements of Financial Decisions and was based upon the work of Professor Bryan Carsberg. I managed to understand it when the topics were explained but most of it went over my head. It had no bearing on the work that I was doing.
I subsequently went to work for one of the top 3 firms. In the late 70s this firm had "merged" ie taken over about 4 other firms. The reason for the mergers in each case was because of major errors. Several years later my old firm was also "merged" with another firm and I think that the reason was erroneous audit reports.
So, I am part qualified and have had my small practice for about 40 years. Some of my clients have been with me since inception and I regularly get more clients from recommendations. I have only been involved in 2 HMRC enquiries - one for a client who was working via an agency who claimed that some of her remuneration was dividends. The other, more recently, was a client whose tax return and accounts prepared and submitted by a previous advisor were questioned.
Back in the 90's I took over a small practice of an accountant who'd died suddenly and his widow was short of money. This man was an ACA. As I worked through the clients I found falsifications and huge estimates. As I explained to the clients when preparing their accounts that I would not include large estimates without backup, one by one they left me.Some remained, all professional people and only left when they finally retired, usually in their 70s, or died.
So my experience has been that even the largest firms do not always behave ethically.
One of my clients received an over payment letter. Trouble is she also has SE income and has an overall tax liability. Tax return filed in May/June, over payment letter sent out in September. I telephoned HMRC to tell them about the error more than 2 weeks ago. The person on the other end said that the repyament cheque would be stopped.
Today she received a cheque. I advised her that the easiest course would be to bank the cheque and not spend it. Any other action would cause trouble down the line.
My answers
I have only a few clients who are VAT registered and I cannot see, for the life of me, how MTD for VAT has been good for them.
Aren't we supposed to be changing the year end to align with either 31 March or 5 April? I have several clients whose year end is 30 April through to 30 September- going back to the PYB (prior to SA for you young ones)
Before the days of self assessment estimated assessments were issued. If the estimated profits were lower that the actual the tax payer would pay the amount HMRC calculated. When that happened they would invariably raise a further assessment with a much higher estimate which was invariably higher than the actual figures. I don't see why they can't do this now.
This from UK Tax Justice
HMRC admitted this week they have no idea how much revenue is being lost to overseas tax havens.
In a freedom of information (FOI) response, the tax authority said they didn’t know – and hadn't attempted to calculate – how much tax is being evaded by UK residents funnelling their wealth offshore.
At the same time new figures shine a light on the scale of the problem: £570bn is held by UK residents in financial accounts in tax havens.
Why are they wasting their time on MTD rather than the above? Answer - I think because it's easier for them.
Some years ago my OH met a man who was head of restoration at the British Library. When asked what he knew about book restoration the answer was that he didn't need to. His job was to supervise the restorers who did know.
It seems to me that few, if any of HMRC staff in the higher echelons are accountants, just administrators who have no idea how small businesses work.
About 90% of my clients are artists/craftspeople. Some of them are capable of completing a spreadsheet and I provide them with a template. Some will even get a degree of satisfaction from successfully completing one. Some cannot get their heads around paperwork and are happy for me to do it all for them. To my mind their time is better spent in creating their artworks rather than agonising over paperwork. Some really do agonise and they are relieved to have the burden taken from them. Their income is irregular and often dependent upon timing of exhibitions but they do know how many sales have been made or the value of any commissions.
MTD is of no benefit to them whatsoever.
Back in the 80s all the assets the partnership (top 3) that I worked for had were leased - buildings, furniture computers etc. This was to avoid complicate calculations every time there was a change in the partners.
During the time I was there, there were 3 mergers and the partners in those firms owned their buildings. Every time one of those partners retired the buildings had to be revalued and and reapportioned amongst the remaining partners. It was fascinating work but sometimes a nightmare.
If HMRC could get their Fetch system to work properly it would be a great help. Yesterday I "fetched" a client's data. She has two NHS employments. The gross salary and tax for one employment was shown correctly. For the other just the tax deducted was shown. No gross salary. The only other figure was total earnings qualifying for Class 1 NIC of approximately £35k. Her combined salaries amount to just under £50k. Luckily I did have her P60s.
How can we trust them when their systems make mistakes like this?
I failed one paper in Part 2 of the ACAEW exams back in the early 80's. It was called Elements of Financial Decisions and was based upon the work of Professor Bryan Carsberg. I managed to understand it when the topics were explained but most of it went over my head. It had no bearing on the work that I was doing.
I subsequently went to work for one of the top 3 firms. In the late 70s this firm had "merged" ie taken over about 4 other firms. The reason for the mergers in each case was because of major errors. Several years later my old firm was also "merged" with another firm and I think that the reason was erroneous audit reports.
So, I am part qualified and have had my small practice for about 40 years. Some of my clients have been with me since inception and I regularly get more clients from recommendations. I have only been involved in 2 HMRC enquiries - one for a client who was working via an agency who claimed that some of her remuneration was dividends. The other, more recently, was a client whose tax return and accounts prepared and submitted by a previous advisor were questioned.
Back in the 90's I took over a small practice of an accountant who'd died suddenly and his widow was short of money. This man was an ACA. As I worked through the clients I found falsifications and huge estimates. As I explained to the clients when preparing their accounts that I would not include large estimates without backup, one by one they left me.Some remained, all professional people and only left when they finally retired, usually in their 70s, or died.
So my experience has been that even the largest firms do not always behave ethically.
One of my clients received an over payment letter. Trouble is she also has SE income and has an overall tax liability. Tax return filed in May/June, over payment letter sent out in September. I telephoned HMRC to tell them about the error more than 2 weeks ago. The person on the other end said that the repyament cheque would be stopped.
Today she received a cheque. I advised her that the easiest course would be to bank the cheque and not spend it. Any other action would cause trouble down the line.