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Accountants' top 'death of annual tax return' concerns

19th Mar 2015
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AccountingWEB members have been very vocal in sharing their thoughts, worries and concerns about the impending abolition of the annual tax return, as announced in the Budget 2015 speech yesterday. 

The finer detail is not yet known, however within five years the annual return will be phased out. Tax returns will instead be replaced by automatic uploads of their income, pre-populated using data from third parties such as employers, banks and investment firms and accessed anytime via a single digital tax account.

AccountingWEB members appear to be divided on this, as is shown in the various Any Answers threads and comment beneath the news article.

We will be covering the issue in more detail through a tax expert/software vendor analysis article in the next few days.

However, in the meantime we have sifted through the comments and come up with some top concerns, which are collated below - please vote for the one that is most pressing for you. 

Replies (49)

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By EasyTaxWMid
20th Mar 2015 10:52

A moment of madness

I would formally like to apologise to the editor/writer of this article, sorry Rachael. Clearly you are a competent professional & the article is well written. I chose to comment in the most ignorant manner, placing my personal concerns over decency. Also, I'm glad to see your highlighted concerns mirror others perfectly - it self-condemns me even further for my moment of madness. I will leave it at the - my concerns are in the forum, should anyone wish to see.

Sorry again,

Will

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By Rachael White
19th Mar 2015 15:50

EasyTaxWMid

Thanks for your comment! Could you expand on that please?

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By EasyTaxWMid
19th Mar 2015 21:52

Not in touch
You're welcome, though I would not want anyone to think I was insulting you. If I have, then I am sorry. I just don't think concerns mirror the forum concerns, I think that is a fair point to bring up.

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By johnjenkins
19th Mar 2015 17:01

For the abolition

 of tax returns for the majority of business there would have to be a fundamental change in the law that governs the self-employed. That will never happen.

Bankstream think they can do the job of Accountants by analysing bank payments and then it's a simple job of sending it to HMRC or whoever.

There is a certain amount of truth in the fact that all transactions will be coded and sent to HMRC. If those codes don't match up with what we put in then it'll get flagged.

I really can't wait for this new techno crap because it will show once and for all to HMRC that they really do need Accountants.

What HMRC cannot and never will get their heads round is that business is not black and white, nor can market forces be controlled.

Since the Tories kicked out Maggie stability has gone out of the window. No good throwing money at HMRC to come up with cock[***] and bull schemes that will never work.

Pray tell me what the OTS have come up with? 

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By the_fishmonger
20th Mar 2015 12:57

Ultimately is this a dumbing down exercise?

johnjenkins wrote:

Pray tell me what the OTS have come up with? 

Absorption of NI into other taxes was one of theirs wasn't it? I recall 2017 being mentioned as the 'implementation by' date way back whenever. The last we heard about this was "it's a lot more complicated to implement than we thought".

As a profession, we are open to change and accept it must happen. We have been through SSAPs, FRSs, IFRSs, new FRSs, computers, online filing, Finance Acts, Companies & various Taxes Acts, learnt what changes they meant and accepted them all. This latest wheeze just seems to be an ideological plot from people that have never operated in a commercial environment but have books on 'things' from which they pluck the most zany passages and believe they work in reality as well as fantasy.

If you have tried to use bank uploads, you will know that unless all payments/receipts are Direct Debits, you still have plenty of 'where do you want to allocate this' queries from the software. Software (at present) can never know where a cheque or paying-in book reference should be posted because you can't give garner sufficient details from the bank. Are HMRC going to stipulate that the banks input the payee from cheques and note the reverse side of paying-in slips for e-statement inclusion?

There will be more work as a result for accountants, however it will be low skilled work and not what we trained for.

I fear the lunatics are now in full control and the walls of the asylum will shortly be entombing the sane

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By Rachael White
20th Mar 2015 08:55

No worries - every comment is a fair one! If you'd like to outline your concerns, I can include them too. 

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By ireallyshouldknowthisbut
20th Mar 2015 09:19

.

I think its a fair summary of the points actually, or at least for our practice. 

Its just like pretending NI is not a tax. It is still walks and talks like a tax. 

Just at the new returns will walk and talk like a tax return, but be called something different. 

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By timiambeing
20th Mar 2015 10:16

Change is always an opportunity, but who for?

So, where will all this lead? Well we will have accounting software like Xero, FreeAgent, Sage et al thriving as they implement and incorporate auto filing into their software. Whether this will be monthly like RTI with a button to press or immediate on input we are a way off knowing - I am presuming the former. This means the visiting bookkeeper's role will expand from desirable for the majority of small business to absolutely crucial for most, bookkeepers are definitely winners here! We offer an 'all in' service and only two of our clients don't use it, but the markup on bookkeeping alone is not enough to warrant keeping an accounting practise alive and kicking.

Now what about the poor old accountant, sitting in their office waiting for the year end trial balance to arrive along with all the supporting documentation that will allow them to make the necessary adjustments and alterations in order to arrive at a sensible set of statuary accounts - will statutory accounts be abolished for the smaller entity too? Will Companies House stop wanting to see abbreviated accounts or will they simply upload formatted data from HMRC? And if there's no longer a year end tax return to file then when is the accountant going to be able to intervene in the data chain on its glorious way to HMRC to apply capital allowances, bring forward losses from prior years etc? Will this all be automated at HMRC once they have the data? Will TaxCalc and Iris and other accountants software migrate into online tax account checkers - if so their prices will have to diminish certainly as we won't be able to charge what we charge now as merely 'checkers' popping into clients tax accounts to have a look come year end? I can foresee maybe two or three years where clients keep us on for this role, but when we don't save them any tax and there is nothing much to amend then the expense of the compliance accountant will seem unnecessary surely. Thats only a logical outcome.

Of course there will be clients who require monthly management reports and more hand holding and these make up the majority of our clients, but again, at what point are we going to be able to intervene in the chain of data heading for HMRC? If we provide the bookkeeping and software and operate it for our client, then I presume the accountant will get a little look in each month before the filing button is pressed. But again how can we charge for this intervention relative to the bookkeeping work involved? The accountants actual perceived physical role will be dramatically reduced, so the accounting element of the complete service must be reduced surely? Bookkeeping will make up 85% or more of the total work, 15% will be attributable to the accounting intervention prior to filing - it probably already does actually, but the perceived value of us providing that end of year service is far higher (mostly based on the statutory reports and tax return we produce!) than the perceived value of a quick month end intervention.

To be fair if TaxCalc and others get their priorities right we will have far more intelligent software for that 'checking' than we have at the moment, most accountants software being glorified form filling tools. It will detect asset purchase via the bookkeeping software and calculate capital allowances on the fly - but then again maybe the likes of Xero and other bookkeeping software will do that by then, they are very nearly there already? The lines are becoming blurred, accounting software might migrate into being just that - offering data entry to final accounts filing in one package. Then accountants software will need to find a role for itself and I am not sure what this role will be.

I can foresee for example Xero, which we offer to clients, allowing us to switch off the accounting stuff so it is not seen by the user (as we can now some elements) and manage that on behalf of our clients, they already have working papers and other accountants tools. It could be fun for people like me as I love tech, but how much I will be able to charge and what my role will be (as a compliance accountant) I am not so sure.

If the government and HMRC continue to simplify tax (and that has to be a 'good thing') so they can deduct it almost at source for all their customers and not just those who are employed then maybe much of what we do now to ensure the correct allowances and tax breaks are available to our clients will be null and void?

Interesting times ahead, it's progress for the digital age and to be applauded, it needs doing right  and it will need help form the body of accountants to get it right. But for the small practise servicing small business clients I just wonder if we can eventually retain a compliance role for ourselves at all, a role as tax advisers probably, as bookkeeping entry checkers before HMRC see the data definitely - but our roles are changing and the challenge will be how we migrate and make a niche for ourselves in the coming few years.

 

 

 

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By robobhoy
20th Mar 2015 11:40

Sceptical

It will never happen within the 5 years mentioned (if at all).

 

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By othornto
20th Mar 2015 11:49

Its Kafaesque!

What strikes me is what it implies.

It won't create less work for anyone but will become part of the stultifying relentless feeding of information into the bureaucratic machine that our poor European cousins must already endure.

France has always been much more advanced than ourselves in this regard. Does this create less work for everyone? Does it hell! It feeds the monster and everything is prescribed right down to the permitted chart of accounts for your business.

But heh it will mean alot more work for practice (if you can possibly bear this mind numbing work)

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By AndrewV12
20th Mar 2015 12:35

I agree

good points well made, paperwork and data collection always lead to .... more paperwork and data collection.

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By aesumra
20th Mar 2015 11:50

I do not think the Government has given this a thought

Do the HMRC really think that each and every small traders has a business bank account, have they even thought of the taxi drivers, market traders, takeaways,plumbers, builders etc who still do their business on cash basis mostly to save the ugly bank charges. How do the HMRC think the bank will cope with that, welcome to massive underpayments of taxes. Most of small traders do not understand or have the time to do basic bookkeeping so how on earth is this going to work. All HMRC have done has kept everyone guessing how this is going to work and yet they themselves have not thought about it in debt.

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By JoandToby
20th Mar 2015 12:06

Lots of concerns

aesumra wrote:

Do the HMRC really think that each and every small traders has a business bank account, have they even thought of the taxi drivers, market traders, takeaways,plumbers, builders etc who still do their business on cash basis mostly to save the ugly bank charges. .

 

These are my thoughts exactly - a lot of our clients use personal credit cards to pay for expenses and as you said, some don't use a bank at all - have just done a market traders set of accounts - all takings were cash and he pays his suppliers in cash. 

Also on larger sets of accounts are we going to have to incorporate debtors and creditors each month?  How will capital allowances be claimed? How about private addbacks on telephone and motor? What about partnerships where the profits are split amongst five partners and then one of those partners has several rental properties? Losses brought forward etc etc - the list could go on.

I think they are just thinking of client's who bank all their takings and only use one bank source for expenses - all nice and neat, but in reality, this isn't the case for most incomplete records accounts.

In 1997 I thought there would be a big loss of business when people would be doing their own tax returns, but it actually created more business as prior to that you could just send typed accounts and a computation in to HMRC whenever you felt like and didn't even have to fill in a tax return.

Many client's haven't got computerised records because they don't like doing books which is why they come to us.  They don't like getting their books together once a year, let alone monthly, so not sure how that would pan out.

The only benefits I can see so far are being able to access employment information, as now you have to ring to request it if they have lost the P60 and also the pensions received information should be better as sometimes it's hard work getting client's to find the information on what they received.

Also, how can a bank automatically code everything without someone checking these entries - for example if you go to Homebase you could buy decorating materials, cushions for your private dwelling, houseplants - it's not as simple as saying Homebase is always material overheads. 

 

 

 

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By KateR
20th Mar 2015 12:03

And not just cash businesses

I act for many employed in the entertainment business who do not have business bank accounts although paid by bank transfer. The majority have one bank account for all purposes, often joint with spouse or partner. They don't use accounting software, often only just able to manage an excel spreadsheet. How on earth will they fit into this great scheme?

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By Tom 7000
20th Mar 2015 12:13

well...

It just means theya arent going to send any forms out anymore and save trees and postage

dont worry chaps it will be ok

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By ireallyshouldknowthisbut
20th Mar 2015 12:13

.

Lets face it the "minsiters that be" have had a vision.

A vision of a £250 million+ IT project sold to them.........by some IT companies.

And they have lapped it up. Its a bit like listening to Bob, it sounds convincing if only you didn't know anything at all about accounts or tax.

However there are some real positives to this in terms of data population that should have happened years ago. 

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By chris-bird
20th Mar 2015 12:15

Pre-population and the Self-Employed

The idea of pre-populating returns with information already held is great, provided the data is correct. I agree, but for a sole trader there will be a need either for very timely management accounting so an upload can be provided or presumably they will be taxed and then have to prove that they are overtaxed and claim it back. Either way, I think accountants will still have a job!

Not many people believe HMRC at the best of times, so I am sure most will still want someone who understands the tax world to check their tax paid is right.

How will they cope with Capital Gains and Entrepreneurs Relief or EIS & SEIS investments?

 

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By jamiea4f
20th Mar 2015 12:18

Sounds like..
A recipe for complete disaster. Clearly someone at HMRC has decided that the current tax system of waiting for the end of January to receive a large sum of money isn't very effective, cash flow wise. Having just had a chat with our friends in the revenue about a client who wants to complete a self assessment return but they won't let him, even though he has other dividends, interest etc. So now we have to write to them with the info and they then send us a calculation, by post. And don't get me started on the corporation tax/Adobe download unreadable farce....

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By JessicaRain
20th Mar 2015 12:27

What about penalties?

Will clients be penalised monthly for late 'returns'? Plenty of revenue, if yes, for the tax man. Even I will struggle with monthly form filling (and I don't have a business bank account!). Does anyone know the view of the other parties on the proposals? Like the UC, I'm sure a lot of busy small businesses will be hoping some of these policies are scrapped if the tories don't make it back in.

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By David Gordon FCCA
20th Mar 2015 12:29

Dear Lord from HMRC theorists and It dreamers preserve us.

 

 Someone has forgotten, or never learned, probability theory. If each supply of data is acknowledged to have a % likelihood of error, then in order to arrive at the total likelihood of error the various numbers have to be amalgamated. That is without taking HMRC's sad history of IT cock[***]-ups. So, for simplicity's sake, with six sources of data each with a likelihood of a 1% error, the actual error possibility is 6%. How many tax returns does that translate into?

 people are in business to earn a living, not play with computers. I prudently estimated that if it were not for HMRC, 75% of my clients could time-efficiently deal with their accounting needs without using computers. I here speak strictly of accounting needs. Selling, publicity, PR, R & D, are a separate issue.

 This new wizz- bang idea is presumably because in fact it finally dawns on HMRC that they did not get the self-assessment system right. It took years to get to a half-way working system. In case you do not know, HMRC actually operates at least two IT systems which do not talk to each other.

 HMRC-VAT introduced, sensibly, annual accounting, cash accounting, and the sales % systems, because they recognised that thousands of small businesses could not cope with quarterly and or accrual based VAT.  Not because the taxpayers were stupid, but because after a day on the building site, in the shop, at the office, these people did not want or could not face time spent playing with numbers. Jolly good show!

 Now HMRC-Tax want to ignore that lesson and go backwards. God preserve us from civil servants with micro-chips where their brains should be.

 

 

 

 

  

 

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By AndrewV12
20th Mar 2015 12:32

Its worrying

If all of this data is to be captured and automatically sent to HMRC its a worry, however

Just wait until large tax bills are automatically sent out, what happens if some investment income does not get sent, who will check, who will be liable.

If its very simple Directors SA tax returns, it may be helpful, spare us a task.

 

If its true its bad news for us as the self employed will become an in dangered species.  

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By trecar
20th Mar 2015 12:32

Hype and reality

I suspect that Osborne has been taken too literally. We must remember that he considers himself the consummate political strategist and he indulges himself in that field at every opportunity. What he calls abolition we would most probably describe as partial population with readily accessible data, such as bank interest details etc.

Remember also that the software development involved would be immense and that it will take considerable time and cost before it becomes operationally dependable. As a politician his time horizons tend to revolve around the parliamentary cycle, hence the five year time frame. Of course we must expect disruption to the way we work as technology advances but don't assume that because someone sets out blue sky objectives that conditions will necessarily conform to the required environment to achieve those objectives. Osborne has a record of missing targets and I see no reason to think that this target will be the exception.

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By Michael C Feltham
20th Mar 2015 13:50

Since the system will not allow me to post comments (A nice exemplar of the potential problems!), I'll do it here:

Topic 1.  As I wrote and carefully detailed in the earlier thread, the core problem is System Integration. Disparate data systems use wildly differing protocols, schemas and taxonomies.

In order for one organisation (HMRC) to collate and successfully read (without data errors) so many different data streams is cloud cuckoo land, rather than Cloud Computing!

Forsooth! When HM IR adopted responsibility for NIC they could not successfully integrate this with Income Tax! Indeed, their agents needed two different terminals, one VDU and keyboard and mouse and a data switch to move between Income Tax and NIC!

And that was two government departments!

Topic 4, Indeed: pressures that the average small business will nt manage to deal with effectively.

Topic 5. How will the average small business afford to actually pay for extra professional work?

Topic 6. This assumes all small businesses are IT literate. They are not!

Indeed, increasing numbers struggle with basic literacy and numeracy.

As always, Government still utterly fail to grasp the core realities of the SME sector, which generates nearly 50% of UK's private sector GDP and circa 48% of employment.

The vast majority of SMEs are small.

This current Government idiocy simply militates against small business, rather than encourages it.

 

 

 

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By Jamesm2705
20th Mar 2015 14:14

Worrying? Yes. Feasible......Mmmmm

I agree that the worst case scenario which would effectively be to place the onus on business owners to feed data directly to HMRC via Accounting software/Bank accounts is very worrying but surely can in no way be possible.

Most of the reasons for this have already been highlighted in the above posts but as a Sole Practitioner who deals mainly with Sole Traders, I know for a fact that most of my clients just want to pay one Annual fee for me to take away all things Tax and Accountancy related.

Direct feeds from a bank can not differentiate between materials purchased at B & Q or items purchased for a kitchen upgrade at home or even some expensive equipment to be capitalized. The list of reasons against goes on.

The limited information that I have found regarding this on HMRC's website is entitled "Making Tax Easier" but if they go too far with this they will need to add "but making your annual bookkeeping a mammoth task". Which, by the way is another thing, if bookkeeping information is to be uploaded throughout the year, smaller clients will not want to do this. All well and good you might say, more work for Accountants. Yes, more work, but can we charge the fee's to reflect this. No way. It just won't stack up. We'll end up as bookkeepers on minimum wage.

NOTE TO MR OSBORNE (in the hope that they are monitoring sites like this to gauge opinion).

HERE'S SOMETHING WORTH CONSIDERING GEORGE. I know that you haven't given much thought to any of this up until now but just think on. You have issued a bold statement suggesting radical changes with no real explanation of what will replace the SA Tax Return. Causing great concern throughout the Accounting profession. Most Accountants the length and breadth of the country appear not to want these changes. That equates to a lot of voters. You could be in danger of alienating an entire industry. You might even have the dubious honor of putting more people out of work than Thatcher did! I for one know who I WON'T be voting for.

Best case scenario = some pre populated information online. Great, get on with it. Why didn't you just say so.

Worst case scenario = The death of an industry. A little melodramatic? Time will tell.

Anyway, best get on. These Tax Returns won't file themselves....or will they?

 

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By David Gordon FCCA
20th Mar 2015 16:09

as usual lets get Philosophical

 One of the glories of the UK is that 99+% of tax payers pay their taxes due according to current regulation. They may grumble, but they do pay. Really, if you look at the numbers it truly 99+%

 Here is not the place to go into historical reasons for this, but it is an amazing advantage for UK Plc.

If you have had any dealings with taxpayers in France, or points south thereof, or eastwards, you will know this.

 Our delegated administrators seem determined to ignore this advantage, and indeed negate it.

 Once this trust is lost it will not be regained. There seems to be a madness taking hold that as soon as a computer is involved "Things" get better.

Sorry, but to be blunt, I might stick a computer chip up my bottom, all I would get is a dose of "Pharoah's revenge".

 It is 36 years since I bought my first office computer. Apple 48k look alike, plus printer. We should be long past regarding them as Harry Potter's magic wand. The first rule of computing was /is "Rubbish in = Rubbish out". HMRC in particular should have learned this. (actually that was not the first rule. The first rule in my instruction manual was "If the computer does not appear to be working have you plugged it in?")

 Did anyone else read the comment in the "The Times" , a few days ago? A treasury spokesman said, that from taking the average taxpayer 40 minutes to complete his tax return the new system should get that down to 10 minutes. You wanted La La land, you got it.

 The reason I say this is: The professional organisations are so anxious to preserve what they call the "Working relationship" with HMRC, that they will not under any circumstances take up meaningful arms against the enveloping tide of bullshit. Individual professionals myself included will not when push come to shove, issue meaningful complaints because we do not want our practices labelled as "Awkward". Reasonably, therefore, the masters of HMRC go on their merry way with the truthful comment that "No-one is complaining".

 Why not "Google" the names of the top twenty executives of HMRC, per their website, to see just how many of them had any real experience as a tax professional or tax officer?.

Last time I looked the answer was "0". We get what we deserve.

 

 

 

 

 

 

 

 

 

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By Nebs
20th Mar 2015 16:22

The Lone Voice

I think it's a great idea. Looking forward to two weeks in Florida in January 2020.

Give the man some credit, I doubt he decided to announce this in his budget without some thought and input. I remember the RTI discussions at CPD events, you could have been forgiven for thinking the world was about to end based on some peoples comments.

Cash In - Cash Out will be profit for most small businesses. What could be easier. Low tax bills in early years as you buy equipment and build stock, great encouragement to start a business. High tax bill when you cease and sell off everything you've already claimed for, which you can pay by cashing in your pension. All done on a simple smartphone app.

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By tonyhawley1941
20th Mar 2015 19:13

I don't believe it
There must be some truth that civil servants seem to live in a different world to the rest of us!

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By Michael C Feltham
21st Mar 2015 14:42

Question?

tonyhawley1941 wrote:
There must be some truth that civil servants seem to live in a different world to the rest of us!

Always worth remembering, perhaps, that Gideon, after Eton and Oxbridge, held two real jobs: for very short periods. Job One was working for some arcane branch of the NHS in North London, entering death stats (by hand) onto a survey: and then Selfridges, where he folded towels for retail display.

Then off to the House of Lunatics where he was a Political Researcher: whatever this means in the real world........

Question:

What's the difference between:-

Terry Wogan:

George Osborne:

Alistair Darling: and,

Gordon Brown:

???

Answer: Terry Wogan is the ONLY one with a banking or finance qualification!

 

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By EasyTaxWMid
21st Mar 2015 15:17

Like it
Ha ha brilliant

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By adoggett
21st Mar 2015 09:06

No tax returns

I shall be returning from Mars shortly, to drop into this alien world. Anyone who thinks that completing a tax return is simple is not all there..By the time you turn on your computer, find the necessary website, access the number of ever changing passwords, enter various figures.. Well, that's your first hour gone.. and to contemplate that the average university professor will have any clue as to tax, not helped by the fact that the rules are changed at least once per year specifically to ensure no one now knows what they are doing...  I digress, perhaps time to leave the planet again and go somewhere sensible......

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By EasyTaxWMid
21st Mar 2015 10:20

Uncertainty is turning rage!
Since George (formerly Gideon) dropped his little bombshell, elsewhere on AWEB I had a tax student ask me whether I thought it was a waste of time & resources them continuing to study tax! That makes me vicious, driving down to number 11 kind of vicious! How dare they do that to a student. I also heard somebody else on about how accountants don't have rights to clients & so on - well isn't that nice & broadminded of them :-) Oh no, hang on, it actually sounds like lefty minded, eurocrap! I worked hard & spent harder to get where I am, if someone wants to take that away from me - then they better be wearing a gum-shield when they say it. I have a right to provide for my family, everybody moans when teachers or industry jobs are under threat! Not accountants though, the nemesis of the tax revenue maximisation brigade, get swept aside year by year from software on one side & policy on the other. I had an ATT friend of mine call me last night, he was devastated. He does not know what his future will look like (because that have not give any details - just uncertainty). Have we moved to a society where you are EXPECTED to have a job & pay taxes, but are not ENTITLED to one? Sod that. I have 30 years employment in front of me, fancy putting so much doubt over our lives. Have to admit, I have been looking @ CIMA just in case. No one tells me I have no right to work in something I have given my life to - idiots. These are the same lamas who think driverless vans & streamlined automation are good things - jobless economics.

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By EasyTaxWMid
21st Mar 2015 12:15

Governing bodies!!!!!
Where are the governing bodies in all this? Have they no weight to represent their members fears? Paying extortionate fees to have 'Chartered' on your business cards, if they don't watch, it will be about as much use as having the title of Chartered Chariot Maker! - where small practice is concerned
anyway!

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By sandboxaweb
21st Mar 2015 14:01

Time to make a move

I see this as a sign. I have been pondering the future of the accountancy profession for a while and wondering if it is time to start a new career in Law OR move into management accounting.

I detest paying out so much money on studies and subs only to end up pitting myself against the plethora of unregulated 'accountants' out there.

Working in an unprotected profession is bad enough but a lot of business owners also now do their own books in the belief that paying for accounting services is a luxury, an indulgence. A friend of mine likens having an accountant to hiring a cleaner for a flat.

Now, we have this monthly pre-populated thing. So where does that leave SME accountants like me? In the gutter of uncertainty, that's where. Most of my clients are consultants - one man businesses - and locum doctors. Quite a few are savvy. One is already asking if my fees will go down to reflect the fact that he can now easily do the work themselves as if paperwork is all accountancy is about. Looks like all the included tax consultancy services my practice provides no longer matter. After all, HMRC and Gov.uk have all the answers.

A former business partner took up employment last month as a management accountant because accountants within big companies had more clout than the practicing cuckoos out there. I'll hate to return to employment, however, with a family to support, this moment looks like the time to return to the classroom whilst I still have enough clients to cover the bills. It's a toss up between MBA, CIMA or Law.

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By EasyTaxWMid
21st Mar 2015 14:46

sandboxaweb reply
I started an MBA end of last year, I do have a communcications business also. I have always felt small practie is under threat, I just hope that another angle comes along. I will, however, consider my options. I hate the thought of going back into management accounting (where I initially started training), all that bullshit, corporate worming. I have thought of ramping up the MBA pace & offering overall business services (HR, Marketing advice, etc) - but it is sickening to have to think this way - it is just treading water for occupational survival. I hope things
stabilise & a suitable equilibrium found within the field.

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By ShirleyM
22nd Mar 2015 08:55

Destruction of the accounting industry?

Governments are capable of (and willing) to destroy entire industries, but I doubt it will happen with accountancy.

Many avoidance scheme promoters (where they are selling evasion disguised as avoidance) have done serious damage to our profession, but it is unlikely that we will end up like the miners, where the whole industry was destroyed by the government of the day, and we now import the coal we need.

Thanks to the government and the media, miners had little support from the general public. Does the same now apply to accountancy? Could be!

Will we need a national strike and protest marches to try and protect our livelihoods? Nope.

Can businesses import the know-how and the help that the majority of small business will still need? I doubt it.

Is it any different to when self-assessment arrived? Nope.

The government will still need information to be provided, and the ability to provide accurate information will still rest mostly with accountants.

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By Suetrun
22nd Mar 2015 13:05

In support of Bookkeepers

I do feel that some of your comments above belittle the role of the bookkeeper, comments such as "We'll end up as bookkeepers on minimum wage" are degrading  experienced qualified bookkeepers like myself who actually work hard to provide a support service to accountants and who may find their work also diminishes as a result of this HMRC and government backed idea.  As accountants I can appreciate that this proposed legislation could have a detrimental effect on your businesses but please don't refer to bookkeeping as some low grade work.

 

 

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By Michael C Feltham
22nd Mar 2015 16:56

Sorry!

Suetrun wrote:

I do feel that some of your comments above belittle the role of the bookkeeper, comments such as "We'll end up as bookkeepers on minimum wage" are degrading  experienced qualified bookkeepers like myself who actually work hard to provide a support service to accountants and who may find their work also diminishes as a result of this HMRC and government backed idea.  As accountants I can appreciate that this proposed legislation could have a detrimental effect on your businesses but please don't refer to bookkeeping as some low grade work.

Well, don't forget, please, if this goes ahead very much as it is, self employed people won't need bookkeepers either!

Most successful SME companies use computerised record keeping systems.

So sorry Suetrun, looks as if you'll be redundant to purpose too.......

 

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By Jamesm2705
22nd Mar 2015 18:49

Let me clarify.

Suetrun wrote:

I do feel that some of your comments above belittle the role of the bookkeeper, comments such as "We'll end up as bookkeepers on minimum wage" are degrading  experienced qualified bookkeepers like myself who actually work hard to provide a support service to accountants and who may find their work also diminishes as a result of this HMRC and government backed idea.  As accountants I can appreciate that this proposed legislation could have a detrimental effect on your businesses but please don't refer to bookkeeping as some low grade work.

 

 

It was in fact me who wrote "We'll end up as bookkeepers on minimum wage". Firstly I would like to apologize for any offence caused. It was not my intention to belittle anyone and I certainly wasn't suggesting that bookkeepers do work for minimum wage. Maybe I could have been a little more sensitive but it reflects the great concern that I have for my fledgling practice that I have worked so hard for.
The point that I was trying to make was that if the worst comes to the worst we be working as bookkeepers (if at all). Also, as the amount of bookkeeping throughout the year that would potentially be required would be high, and clients I'm sure, would not agree to higher fees, then we would effectively be working for minimum wage pro rata.

I do hope that I am worrying unduly and that the Self Assessment Tax Return is abolished in what would amount to name only. The thing is though, I am worried and judging by the above, so are a hell of a lot of people. Was there need to spread this panic without further explanation? In my opinion, no. Like I said in my original post, I know who I WON'T be voting for.

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By JoandToby
22nd Mar 2015 21:49

Agree

Jamesm2705 wrote:

I do hope that I am worrying unduly and that the Self Assessment Tax Return is abolished in what would amount to name only. The thing is though, I am worried and judging by the above, so are a hell of a lot of people. Was there need to spread this panic without further explanation? In my opinion, no. Like I said in my original post, I know who I WON'T be voting for.


Ditto!
When are we likely to find more information?
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By Oppco
23rd Mar 2015 09:04

Pre population of tax returns

Just look at the 'information to help you complete your tax return' online. How may times do HMRC get the state pension figure wrong? And look at their attached caveat; if the HMRC figure is incorrect, then apparently the tax payer is to blame if he uses it on the return.

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By johnjenkins
23rd Mar 2015 11:32

Thinking back

when was the last "bombshell" dropped by a chancellor. We had Mr Major with his 10% tax and oh yes we had Mr Brown with his corp tax blunder. None lasted so, in my head, I have put this to bed as "attention seeking".

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By Stalytax
23rd Mar 2015 17:27

It's like deja vu all over again...

I seem to recall that, not long ago, we were told that all wages were going to be paid into a central HMRC account, so their all knowing and infallible IT could distribute it on via BACS to all the employees under PAYE, less the correct tax and NIC, of course.

Who's bright idea was that, and why do we never hear about it any more?

 

 

 

 

 

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By Rachael White
23rd Mar 2015 17:27

Or is it a bombshell?

We came across this blog post today from HMRC Digital Services:

"We’re developing an API platform, for third party software and apps to send data to HMRC." 

It appears they have been planning this for some time (it was made in November 2014). If it is relating to the announcement then they have been really thinking about this.

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By Vaughan Blake1
25th Mar 2015 12:16

Deja vu again and again

Sounds like the policy makers writing cheques that the IT guys will struggle to cash, AGAIN!

I seem to remember that when the new CIS scheme came into force that HMRC said they would use the CIS earnings and tax to pre-populate SATRs. Hence no longer a need for 715 certs. Eight years later.....

I am intrigued as to where Universal Credit fits in to all this, especially for the self employed.  Monthly cash accounts have been mentioned for UC, this would be an interesting tie in.

Just remember how long we have had self-assessment and yet HMRC's software still can't cope with partnerships or trust income! As both concepts go back to Roman times, they were hardly sprung on HMRC at short notice.

Anyway to be clear, the headline was that tax returns are to be abolished NOT tax itself, so don't panic!

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By Ninian
25th Mar 2015 12:03

Another fine mess....

...... is where this lot is likely to end up.

As for the demise of accountants I would say highly unlikely as we are one of the few disciplines/professions who really can sort out these kind of things once they begin to go pear-shaped; or prevent them getting that far and I think the average person - i.e. who this lot is aimed at - recognises this.

Businessmen large or small - and particularly the latter - are generally not psychologically and/or educationally able to deal with bookkeeping/accounting/tax returns - if they were they would be doing it successfully now. As we already know as a profession, if one is trained there is nothing to it other than time and application - but otherwise it isn't that easy.

Things may change on the surface but the underlying challenges and needs won't.

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By Oppco
26th Mar 2015 12:12

No more SA returns?

Pre population of tax returns is a fine idea, so long as HMRC get it right. The Italian tax authorities have been doing this for a while now, I have been told.

If what the Chancellor said is to be believed, how will HMRC cope with:

Foreign income, and double taxation relief sometimes

Gift aid payments

Pension contributions

Rents received

Chargeable gains

not doubt others will add to this list, but I'm baffled at the moment

 

Surely George meant to say 'the vast majority of taxpayers' will no longer have to complete tax returns

 

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By Vaughan Blake1
27th Mar 2015 12:30

Tax return?

Oppco wrote:

If what the Chancellor said is to be believed, how will HMRC cope with:

Foreign income, and double taxation relief sometimes

Gift aid payments

Pension contributions

Rents received

Chargeable gains

not doubt others will add to this list, but I'm baffled at the moment

No doubt taxpayers will be entering the details directly onto their tax return (er sorry, digital account input screen!).  Would a tax return by another name smell quite as sweet?

 

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By mikewhit
27th Mar 2015 09:38

A gift horse

Perhaps they should trial this in Greece first - after all, they do apparently have a problem collecting their taxes ...

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By mikewhit
27th Mar 2015 10:07

Most bang per buck

Politicians love this "all or nothing" rhetoric.

Meanwhile in the real world, resources are usually best spent at the "pinch points" or "bottlenecks" where a little re-engineering can give significant returns without creating a global upset.

Given the Westminster-centricy of governments I don't imagine their analysis will have been conducted from viewpoint of the tax practitioners, taxpayers, self-employed etc - just from the HMRC view, which would no doubt like "Ed Snowden - like" torrents of data arriving in their tax calculation engines !

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