Member Since: 31st Mar 2009
30+years experience in practice and a little bit here n there on the dark-side.
12th May 2017
Have you considered this fully? The ripple effect through the supply chain would be interesting. If you are fifth in line, and assuming businesses add it to their cost base for onward transmission, then your effective tax rate is a large multiple! One way to discourage business I suppose!
A production/sales tax would not be VAT style, it would add nothing to the sales price as it is a straight percentage of turnover that the trader pays over.
Capex would attract a deduction equal to the percentage used for turnover. Group(s of) companies would remain outside the scope of the new tax regime so that opportunities for circumventing are restricted.
To be fair it is scandalous how many start-ups fail in the first 2-3 years without paying any tax but the owners somehow manage to live pretty lavish lifestyles. This would stop that sort of thing too.
A fair bit of thought has been done, in my case. Many learned acquaintances have picked the holes and they have been looked into. Always happy to try and plug some more!
12th May 2017
A sales tax, similar to your suggestion was put to HM Gov by OST. They ruled it out. In a nushell...
I wrote to OST suggesting a sales tax replaced IT/VAT/CT for any micro-business (say, up to £2m t/o) structure excluding rental businesses with rates set along the lines of FRS sector by sector. Also allowing for a local sales tax, at say 1%, to replace local non-domestic rates so that all businesses contribute and two identical businesses pay the same (assuming same t/o) regardless of good/bad landlord rents.
You could even report and pay monthly through one entry and DD to each authority. Since it would need to be a cash accounting scheme for most, there'd be no acceptable argument from taxpayers that they haven't got the money to pay!
As a bonus, you remove all IR35 and status guff and, by ensuring the %ages are set right, there's equivalent tax take across all set ups.
Added bonus #2 - those businesses wouldn't need to be under MTD
So, WHY NOT?
Well that would require far fewer civil servants and that would, as alluded to above, never do!
It never occurs to Sir Humph that the staff could all be trained to strengthen compliance, ensuring no one gets away with it!
28th Apr 2017
One only needs go back 2-3 years and look at the Inter-City Express Train project which was specified by DfT rather than being left to commerciality. DfT wanted to introduce more vendors and Hitachi was convenient.
This huge contract sees the trains put together from a kit - mostly complete bodyshells are shipped in from Japan for starters. Just the ends to weld on, then fit it all out.
None of the franchisees wanted them over other readily available products from several European suppliers, they cost twice as much to lease and, because DfT let Network Rail (a nationalised body) screw up the electrification, taxpayers are now paying something like £300m to modify the contract (to increase the diesel version numbers) at this late stage.
NB If anyone who asks for renationalisation of the railways actually bothered to look at the reality, they would discover it is nationalised in all but transparency.
26th Apr 2017
We actually care about our clients and that is what this is all about.
The reasons we are up in arms are many (q.v. those given previously and on other threads). However, one that is rarely trotted out is that we know many of our clients are unable to afford much in the way of additional fees for the MTD work.
There is fear of a certain inevitability, that fees can become only slightly higher whilst the workload is disproportionately greater. Quality could be denigrated, by the requirement to meet deadlines under stress of volume, and for what? To provide 'proof' that businesses are complying with digital accounting by filing, with HMRC, figures that will never be utilised.
Some clients will run off and be at the mercy of HMRC's juggernaut. They will then suffer penalties and interest when they make the simplest errors, just because they can no longer afford proper representation.
Bring on new technology that has been well thought out, tried, tested and meets the aims of efficiency - that was why, mostly, we welcomed the SA system as it made sense and had been thought through before the world outside had heard the first thing about it.
MTD is a sows arsse, pronounced as "an great idea" and produced by computer modelling imbeciles. It could be, and would have been, so much simpler, cheaper and better if only the powers that be asked those of us who deal with the small business community.
26th Apr 2017
The NI U-turn was made because they said they wouldn't do it. Now we have a general election, the tax lock is broken (the legislation was written that way) so, if they get the majority and return, so will Class4 NI increases and probably VAT up too
6th Apr 2017
Remember, it's not just us and our clients that are going to suffer. Have some thought for the HMRC day to day, front end staff - they are going to have a pretty torrid time of it.
Even now those that dare speak when dealing with RTI errors, despite knowing the calls are recorded, make it clear they are concerned about the quality and integrity of the IT systems in use for RTI now and fear what is coming for MTD will be far worse knocked up on the hoof.
Perhaps we should all mention that it might be in their interest as much as ours to take some joint action when calling them.
What does their union say about the 'employer' putting their members into the line of fire, I wonder?
5th Apr 2017
The same world in which it is considered normal to christen a child *Constantine or Gideon!
* presumably 20 years or so ago - as was one of the Oxbridge rowers on Sunday
4th Apr 2017
The matter of who should approve those agents would be a matter for conjecture and shouldn't preclude competent persons from obtaining approval. Perhaps a proper audit sample of returns submitted by each gateway over the past year or two would suffice?
The purpose of using the word 'Approved' was to avoid the assertion that they be accountants, qualified or otherwise. That is another conversation/argument entirely since I have no truck with those waving a certificate but their work suggests they struggle to utilise the knowledge gained whilst obtaining those certificates
Mandating would be no surprise following the [likely] imposition of MTD regardless of the proof supplied relating to hardships, abilities and the cost to business owners.
3rd Apr 2017
If the £8bn tax gap exists, then it is far more likely to be unrepresented businesses/traders which are responsible. Agents do at least make an effort to restrict the extravagances of clients' ignorance in the realms of non-tax allowable deductions, don't we?
The simpler way of HMRC dealing with the gap would have been to stipulate that any person/entity registered for SA/VAT/CT should have an 'approved' agent through which HMRC and the business would communicate all accounting and tax matters.
UK plc...the land where simple is just too hard
* 'Approved' is of course, a word for further discussion!
** Perhaps it should be MtG - Mind the Gap instead of MtD (Sorry, it is a Monday morning!)
6th Feb 2017
Universal credit tie in (another of those wonderful wheezes working so well that nationwide roll-out keeps running over the horizon)