Carter report: implications for businesses

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Rebecca Benneyworth
Rebecca Benneyworth Training Consultants
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Much has been written about Lord Carter's proposals to reduce the filing deadline for SA tax returns, and the implications for accountancy practices generally. The report does, however, have a number of other recommendations which will impact businesses generally; while the proposed change to the filing deadline is important, the furore it has created risks overshadowing the remainder of Lord Carters recommendations.

Aspirational goal
Lord Carter has suggested that HMRC should have an aspirational goal that all business tax returns should be filed online by 2012.

The "universal" aim that all returns should be filed by all businesses must therefore include an element of compulsion. The proposed timeline in Appendix 5 of the Carter report indicates that most of this progress is planned for the period leading up to 2010, which allows for two years of potential slippage within this overall goal. No new primary legislation is required to bring all tax returns within compulsory online filing, as enabling legislation was included in Finance Act 2002 at Section 135, and mandatory online filing can be achieved by the issue of detailed Regulations specifying the type of return and the implementation date.

So, is your business ready to start filing everything online? Here is how the individual recommendations pan out, assuming the deadlines recommended are adopted:

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15th May 2006 12:29

Accrediation of On-line Filers
Wasn't there also something about requiring HMRC accreditation to file on-line? Wouldn't this mean HMRC could withdraw your accreditation to file on-line if, for example, you resisted unreasonable fishing expeditions, or they had some other grudge against you?

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15th May 2006 20:23

Only for agents, Tom
The approval process has only been recommended for agents, and yes indeed there are potential problmes with it, but HMRC will not "approve" individual businesses for online filing - you merely need to register, log on and file. Indeed this will become the ONLY way in which businesses can comply with the law in future!

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16th May 2006 08:03

Rebecca, you quote..
"So are you ready? Or can you be ready in time?..."

I don't think that the problem lies with whether or not businesses are ready. I think many are, or at least can fairly easily accomodate these changes in good time - businesses are used to adapting.

The question should be "Will the Revenue be ready". Judging by the fiasco yesterday (which may be continuing) for those trying to file PAYE returns, the answer is "extremely unlikely".

And as for adapting, the public sector just shows itself to be more of an unadaptable dinosaur as each day passes!!!

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16th May 2006 16:50

Approval of Agents
You would have thought they'd be hopping up and down about it, but they don't seem to be, do they?

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17th May 2006 11:22

Approval - instead of authority

The whole area of agent authority has been a complete shambles and is becoming increasingly complicated for HMRC as they take on responsibility for so many different forms of filing.

Are HMRC intending to move to accepting filings from approved agents without worrying about agent authority - ie just as now for PAYE end-of-year?

To Peter's comment, could not agree more. Filing penalties focus client minds, they would also focus HMRC's.

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16th May 2006 13:54

More from me
Tom, yes, that is the real concern with the proposals. I should think that the professional bodies will be hopping up and down at the thought of their members being "regulated" by HMRC. Your point applies absolutely to agents if this proposal is adopted.

John - I regard the evnts of about the last week as the best news since Carter, because it just goes to show that HMRC can't even get right what is mandatory now. It gives everyone the best ammunition to say "If you want us to do it, prove you can do it first". I am a supporter of on line everything in principle, but I have a business to run and like you have grave misgivings about exposing any more of it to the chaos that is HMRC computers.

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17th May 2006 08:39

Given that HMRC can't deal with the volume of online submissions it's shameful that they expect accountants to deal with it.

If HMRC can't cope they extend the deadline. If an accountant or their client can't cope they get fined. Let's bring in fines for HMRC which are paid directly to the accountants or their clients.

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16th May 2006 09:53

Approval of agents
Rebecca, the same applies: will they be able to refuse approval for agents who they don't like?

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