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Digital tax plan goes quarterly

25th Nov 2015
istock_MF3d

Morsels of information in the Autumn Statement report indicate that by 2020 individual taxpayers will be expected to report and pay their liabilities every quarter via their new digital tax accounts.

During his Autumn Statement speech the Chancellor promised an injection of £1.3bn to deliver “the most digitally advanced tax administration in the world” by 2020.

The new digital tax accounts (DTAs) will require most businesses, self-employed people and landlords to keep track of their tax affairs digitally and update HMRC "at least" quarterly. “This will give individuals and businesses a more convenient real-time view of their tax affairs, providing them with greater certainty about the tax they owe,” said Osborne in his speech.

But there was also a sting in the paperwork tail. The government stated it will consult on "whether to align payment dates and bring them closer to the point when profits arise, so that taxpayers make a single regular payment that covers all their tax affairs”.

The Chancellor did not offer much tangible detail on the digital tax account, but Xero UK managing director Gary Turner anticipated that a full plan would be announced early in the New Year. “The ambition is to have 10m DTAs live by next year. Which is pretty ambitious given that UK’s working population is just over 30m.”

The investment in HMRC’s digital strategy runs somewhat counter to an 18% cutback in departmental spending and other economies. But the two processes are interlinked, according to Steve Cox, IRIS’s director of product management. “The HMRC closures last week wouldn’t have come as a surprise to those who have been keeping an eye on what’s happening,” he said. 

“The digital tax strategy is expensive. It’s a large part of why they’re doing the closures. They need cost savings. They’re looking to save £100m by 2025 with these office closures. It just shows how cost inefficient HMRC been. They’re playing catch up in many respects.”

According to Cox, software companies’ own customer support will increase in importance. While it won’t completely fill the gap left by a HMRC staff cuts, it will alleviate some of the hardship, said Cox. “We won’t give tax advice, of course, but we will be able to help you understand what you need to do to get it into the software when DTA eventually takes effect.”

Ed Molyneux, CEO of FreeAgent, took an optimistic view of the DTA initiative: “An enormous amount of friction can be removed from that process. We’ve been removing it on client side and now there's a mandate to do that on the HMRC side.

“It will take a lot of cost of compliance out of the economy. Very small businesses shoulder the burden of compliance - per employee it’s much more expensive than for large businesses.”

Osborne also said during his speech that capital gains tax on property will have to be paid within 30 days of disposal by 2019 via the online account. Quarterly reporting and accelerated CGT payments mean “the Chancellor wants us all to pay and to pay up faster", according to Chris Sanger, head of tax policy at EY.

“First we have capital gains tax for residential property (effectively buy-to-lets and second homes), who now have to pay almost 21 months earlier and now the government is looking at shortening the window for paying stamp duty from 30 days to 14. Following on from the Summer Budget’s advance of corporation tax, the Chancellor seems to have found a seam of gold that he wants to continue to develop.”

Replies (68)

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By steve 12321
25th Nov 2015 20:39

How is it better to have to produce accounts and calculate tax 4 times a year instead of once?
Isn't this more admin and expense?
Have I read it right that there is to be a surcharge on payroll? So more admin, higher taxes in effect. So complex.
We need people who live in the real world to advice the chancellor.

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By mwalker
26th Nov 2015 11:21

Real World Thinking.

steve 12321 wrote:
We need people who live in the real world to advice the chancellor.

 

I'd be happy enough if the chancellor himself got a better grasp of reality.

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By mwalker
26th Nov 2015 11:22

Real World Thinking.

steve 12321 wrote:
We need people who live in the real world to advice the chancellor.

 

I'd be happy enough if the chancellor himself got a better grasp of reality.

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By NH
26th Nov 2015 07:40

@ Ed Molyneux

I am intrigued by Ed Molyneux's comment that this will take the cost of compliance out of the economy for very small businesses.

What, you mean the local builder who brings all his receipts into his local accountant in a shoebox wont need to do that anymore?

Or that client who has a BTL and thinks he can claim the capital cost of the mortgage payment can just do it all themselves.

Or what about that very small business that now has an employee and needs a PAYE scheme with all that entails.

Maybe you mean that small business that would be better off as a partnership or Ltd Co but now they can do it all themselves stay as a sole trader.

Or maybe you mean that instead of paying a modest accountancy fee,  a small business can now divert their accountancy fee into a software companies hands instead, do it all themselves, put everything through the books, make no adjustments for private use and pay no tax.

Does anyone else find it odd that it only seems to be the software company people that think this is a great idea?

 

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By ireallyshouldknowthisbut
26th Nov 2015 09:17

.

I imagine its the software people getting the £1.3bn payday on the implementation of quarterly tax returns that will be the most supportive of his ideas!

Its saves time in the same way as RTI saves time with 12 (or 13) submissions rather than one. 

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By Taxbod
26th Nov 2015 11:38

12 or 13 would be heaven

My employers pay weekly. No fines yet, but I live my whole life thinking about RTI

 

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Francois
By Francois Badenhorst
26th Nov 2015 09:26

I'm very keen

There's going to be a big reveal soon and we'll finally be able to look into the nuts and bolts of Osborne's plans. I'm very aware that many of our articles at the moment speak to the software industry, that's due to the fact that they're the ones who have the insight at the moment, thanks to the nature of the consultation process. Once everyone knows more, I will immediately expand my coverage and get more accountants involved - that's a promise!

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By AndrewV12
26th Nov 2015 11:00

Oh my gosh.... late filing fines * 4

If a Labour or Lib Dem chancellor came out with this they would be branded anti business and nanny state, what is G.O. thinking.

 

Also most clients can just about manage to get their records together once a year, is GO looking for more late filing finds.  

 

Looking back was this the ultimate aim of on line filing.

 

Exract above

Morsels of information in the Autumn Statement report indicate that by 2020 individual taxpayers will be expected to report and pay their liabilities every quarter via their new digital tax accounts.

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By AndrewV12
26th Nov 2015 11:02

The filing of the forth quarter

Extract above

The new digital tax accounts (DTAs) will require most businesses, self-employed people and landlords to keep track of their tax affairs digitally and update HMRC quarterly. “This will give individuals and businesses a more convenient real-time view of their tax affairs, providing them with greater certainty about the tax they owe,” said Osborne in his speech.

 

I have a feeling the figures filed in the forth quarter will be totally different than the previous 3. 

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By ianlea
26th Nov 2015 11:16

Quarterly Returns and Payments

Just proves what I've suspected for some time. GO is looking to introduce PAYE for the self-employed.

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Me
By Mark Purdue
26th Nov 2015 11:22

First deadline is actually April 2018

Per policy costing summary;

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/479740/SRAS2015_policy_costings_final.pdf

page 27,

"The measure will be implemented for IT and NICs from April 2018"

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By Dr Accountant
26th Nov 2015 11:28

I cannot see this working well in my sector

It takes the NHS 3/6months to establish debtors if we are lucky. The thought of preparing quarterly accounts is worrying. The first three quarters would likely be on a cash basis and then quarter four/final figures would have huge adjustments for debtors, creditors, stock etc... i.e. the same accounts we currently prepare. The first three quarters would have no value to the client, come at an additional cost and likely to be subject to tight deadlines and penalties.

Seems like great news for accountants and software providers, bad news for businesses in my opinion.

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By steve 12321
26th Nov 2015 12:43

no its bad news for accountants who cant see anything wrong at present. No-one wants to create more work when it is not required. The current system is fine. It is not broke. Clients dont want this and I certainly dont. It is of no use all.  (IDS may disagree - Universal tax credits)

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By emanresu
26th Nov 2015 11:46

we want your tax - and we want it now

Not just businesses. Three or four months ago I wrote that the change to gross interest payments would radically change the scope, and acceptability, of the Payments on Account regime.  When I also put this point to HMRC they said that they noted this and would be making statements about this matter later in the year.  Maybe this is it - all wrapped up in a new "we want your tax - and we want it now" policy?

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By Laurence52
26th Nov 2015 11:51

In real life

I have one client who will be ahead of all my other clients in using aoftware as he already uses Freeagent.

There's just one little problem. When I looked on his Freeagent account for the 2014/15 year I found that there were the best part of 500 unexplained bank transactions which he will have to sort out. That means that if quarterly reporting was already in place the information transmitted to HMRC would be totally wrong.

He's the most computer literate client I have so the chances of accurate information by other clients is remote.

Mandatory quarterly reporting will, in real life, result in:

additioanl costs for taxpayers in terms of software, misleading information due to errors, and for those who need to use the services of an accountant, a very substantial increase in accountancy costs particularly for the smaller self employed taxpayers.

Those nearing retirement may decide to give up.

 

 

 

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By RJandCo
26th Nov 2015 11:53

January cometh now four times a year........


Every January has been hell for us small practitioners since SA came in.  

So, as a result of this "improvement" it kind of looks like January will now come four times a year!

With the relentless push of RTI every month, I think that pretty much puts paid to small practitioners ever having a holiday again. 

Richard Joseph

 

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PJ
By paulgrca.net
26th Nov 2015 13:36

Far worse

RJandCo wrote:


Every January has been hell for us small practitioners since SA came in.  

So, as a result of this "improvement" it kind of looks like January will now come four times a year!

With the relentless push of RTI every month, I think that pretty much puts paid to small practitioners ever having a holiday again. 

Richard Joseph

 

 

I would suggest that dealing with a 1/3rd of your client list every month for the majority of those in practice will just be impossible! 

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Francois
By Francois Badenhorst
26th Nov 2015 12:14

An interesting note

The full plan looks set to be announced around Late Jan. If that is the case, it's slightly suspicious and indicated that a deliberate attempt to release the plans when accountants are otherwise distracted. 

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By Nemesis
27th Nov 2015 09:14

More detail

Francois not sure what you are referring to but more detail will be available in early December. That will be the start of detailed discussion and consultation, with businesses and agents.

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By frankdavid
26th Nov 2015 12:19

Yes !!

"Those nearing retirement may decide to give up "

 

Well this one certainly is (at Christmas)

 

When it takes HMRC  2/3 months to deal with correspondence this beggars belief.  A significant number of my clients are IT illiterate, what will they do ?  maybe a nice book keeping job in my retirement ?

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By RJandCo
26th Nov 2015 12:24

They are not that clever!

Francois,  you may be right about the timing of the announcement,  but somehow I feel that the total ignorance and lack of understanding demonstrated by HMRC about how the accountancy profession works in reality suggests that they would have no inkling whatsoever of the significance of a January announcement.  

Richard J

 

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By Andp
26th Nov 2015 12:26

30 days to pay CGT post sale !!! I thought the current 6 months deadline to pay IHT was harsh.

It can take an age to gather historic purchase completion statements etc in order to prepare the CGT calc. 

G.O thinks if VAT and PAYE can be paid monthly so why can't other taxes . Err  , some taxes are easier to calculate than others .

2020 is very unrealistic . Several u turns will be made and 2030 will be the new target date.

Seriously re thinking a career change if this tosh ever appears in the Finance Act.

 

 

 

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By Ammie
26th Nov 2015 13:11

HAVE THE MARTIANS LANDED?

Has some ET landed and brought with him some of his out of this world, out of touch ideas?

It is no surprise to hear that our orchestrators in the higher ends of the echelons of government are to some extent poking about in the dark, with far fetched, untried and untested, ideas, which although will come to bear will take a very very long time to iron out and become an efficient mechanism.

I agree that, as we have been brought to accept, this opens up a huge opportunity for revenue raising in the form of fines etc and even more draconian management of self prepared work by inadequately experienced tax payers, open to HMRC attack, that will buy the idea that it is straight forward and self declare/guess/manipulate.

I have seen quite a few in Self Assessment who thought the same and whose work has entertained me for hours!!

Just like the pension fund changes, much of this is to accelerate cash flow and push off disasters for others to sort out.

Might be an idea to get RTI and AE running smoothly first.

I sense quite a public whiplash in the years to come. Who needs reality TV!

 

 

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By Pavilionaire
26th Nov 2015 13:27

Too much too soon?

So that's Real Time Information, Auto-Enrolment, DTAs for sole traders, DTAs for VAT, DTAs for limited companies and the abolition of Self-Assessment all within a 7 year period, and all on the back of a general sea change to cloud-based applications.

That's a hell of a lot of change in a very short period of time. 

 

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Teignmouth
By Paul Scholes
26th Nov 2015 14:09

Jones & Co

Presumably, in a couple of months, someone on here will get a petition going to put all of the above panics to the government.  When you do, why not sling in the imposition of quarterly VAT returns?

I had just started my studies when VAT came out and there was the same panic in the office about imposing quarterly accounting on hard done by small businesses, "it would never work". Yet, within a few years it became obvious that the imposition of more regular accounting meant that there was far less work to do at the year end.

If we were still in the world of 43 years ago I'd have some sympathy with the above doom & gloom but we're not, well, many are not.

The delays between recording income, reporting it and paying the tax come from the days of paper and incomplete records.  We (well many) are no longer in that time and so such delays are no longer justifiable.

Just taking one quote from above from NH: "What, you mean the local builder who brings all his receipts into his local accountant in a shoebox wont need to do that anymore?"

Bloody right, I stopped dealing with that sort of "business" years ago, if someone is not prepared to take responsibility for keeping up to date accurate records, or paying someone else to do it for them, then they shouldn't be in business.  See what sort of laughter you get when you explain to an inspector of taxes that the reason why the client's numbers are so unreliable is that they are an "incomplete records job"

I'm sure there will be grief and pain with such a change, there always is, and I'm sure that many above will do their best to throw fuel on the fire, but, it's another case of Threat or Opportunity.  All it's doing is bringing business and financial practices in line with facilities and technologies now available and when you (not I) describe to our juniors in a few years time, what it was like in "the old days" they won't believe you.

https://www.youtube.com/watch?v=ZR6wok7g7do 

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PJ
By paulgrca.net
26th Nov 2015 14:25

Oh but they do pay!

[quote=Paul Scholes]

Bloody right, I stopped dealing with that sort of "business" years ago, if someone is not prepared to take responsibility for keeping up to date accurate records, or paying someone else to do it for them, then they shouldn't be in business.  

 

and will probably be paying 3 times as much in future.

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By NH
26th Nov 2015 14:29

@ Paul

Paul, I partly agree that there is too much panic out there, however I have to take issue with two of your points.

Firstly you cannot compare this to VAT.  The majority of small businesses that we deal with are not VAT registered and therefore this IS an extra burden whichever way you look at it.

VAT registered businesses are also more likely to keep records on software due to the needs to produce proper VAT invoices etc.

Secondly my comment about the shoebox of receipts was to illustrate a point that all businesses that are used to handing in records that the accountant turns into accounts and tax returns will not be able to do this themselves as GO seems to think.

If you live in an ideal world where all your clients are using software, and all the book-keeping is reconciled then good for you, but for those of us at the sharp end this is not the reality of life.

Just because a client keeps his receipts in a shoebox does not mean that those records are not accurate or kept up to date.

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By MC1
26th Nov 2015 15:39

I am sure that taxpayers will be invited to estimate their tax bill each quarter and (on threat of penalties for underpaying) will be coerced into overpaying tax each quarter and then when they put in the finals they can get the overpaid amount back - interest free - ie without any repayment supplement.  What a nice investment bank this government is!

 

Also, being able to collect tax earlier and earlier gives poor old government a massive cashflow advantage.  But government don't seem to realise that it this is just advance cashflow and not income on an accruals basis, and spend it anyway.  Can't wait to see what happens when there are no more ideas for bringing forward tomorrow's taxes to pay today's bills.

 

 

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Hallerud at Easter
By DJKL
27th Nov 2015 09:56

That would be too simple

MC1 wrote:

I am sure that taxpayers will be invited to estimate their tax bill each quarter and (on threat of penalties for underpaying) will be coerced into overpaying tax each quarter and then when they put in the finals they can get the overpaid amount back - interest free - ie without any repayment supplement.  What a nice investment bank this government is!

 

Also, being able to collect tax earlier and earlier gives poor old government a massive cashflow advantage.  But government don't seem to realise that it this is just advance cashflow and not income on an accruals basis, and spend it anyway.  Can't wait to see what happens when there are no more ideas for bringing forward tomorrow's taxes to pay today's bills.

 

 

That would be too simple and would merely require the existing legislation to be changed to incorporate four payments to account rather than two, based on prior year. Why do simple when they can mess things up more by taking the complex approach.

Insofar as one can judge, and I am not sure one can that far, this appears more radical. How difficult it might be really depends on the nth degree required re the accounts. If a client requires to quarterly adjust  for accruals, prepayments, work in progress/long term contracts, stock valuation etc  on an accurate basis then there is a fair bit more work for both client and accountant, and whilst the accountant gets to spread his/her workload more evenly through the year (maybe), for the sole practitioner calculating when he/she can say take a holiday,I already have to juggle payrolls/CIS/vat returns re June/July/ August before I take a summer holiday, is going to be more difficult re reporting deadlines.

On the positive side I know that other countries do have periodic reporting so it is not impossible, but it appears that yet again another government wishes to implement the new exciting bits before sorting the old creaky bits, because frankly major simplification of tax law (as it applies to smaller business entities) ought to have been considered prior to considering this sort of proposal. It has always surprised me that nobody has properly embraced a turnover/profit threshold simplified tax regime that individuals/ partnerships/ small companies can elect to use. (forget the three line nonsense, that just means there are less numbers, what is claimable what is not is in the main still the same whether one is the local corner shop with a £250k turnover or a £100m turnover business.)

The rate they are going the professional exams are going to incorporate a weightlifting qualification to enable those in practice to lift the volumes of extant legislation, this will just be more and more pages in smaller and smaller print (eye test at five today, thanks successive UK governments)

On the positive side my son's employer writes/ maintains a lot of government software systems so looks like his bonuses over the next few years could be healthy.

 

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By Energise Accounting
26th Nov 2015 15:47

Returns

 I actually feel sorry for the small business man or woman no doubt due to the extra admin accounting fees will go up and us accountants will take the blame for a daft measure by the government.

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By raju m
26th Nov 2015 16:10

Bonkers

I think 3 monthly reporting proposal is totally bonkers.

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By Pavilionaire
26th Nov 2015 16:15

A perfect storm?

In order for DTA to work properly the software developers have to nail it, staff have to be comfortable with the changes and be trained up.  However, I can see a lot of accountants retiring and selling up in the wake of this upheaval so lots of client movement.  Will there be the capacity of advisors to cope with the demand in the short term?

All of his change is taking place when 170 tax offices are closing and the 13 super centres will have to hit the ground running. HMRC's track record on change and integration suggests this will be problematic (to say the least!)

Don't get me wrong, the theory makes sense but I fancy the government are expecting too much from HMRC and the failure fallout could be huge.

 

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By North East Accountant
26th Nov 2015 16:32

At least


The Autumn Statement doc on page 71 said "at least quarterly".

The CG Tax is going to be due after 30 days.

I think they will start with Quarterly planning to move to Monthly. April 2021 return due 31/05/21 and tax due for April 2021 by say 07/06/21 collected by Direct Debit and so on and so on. Final month of tax year, tax year reconciliation.

A few people I have talked to about this say why bother to be self employed, best just go and work for someone else. 

 

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Chris M
By mr. mischief
26th Nov 2015 16:45

Don't panic folks

I have a very simple methodology which is guaranteed to work for the "once a year" client who struggles even to file SA much before this time of year as it is.

I call it the "making it up" methodology.  It requires a bit of skill in order to fool auditors, tax databases and so forth.  For example, ensure the final digit of each number is truly random and hence includes its fair share of zeros.

No worries.

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By justsotax
26th Nov 2015 17:17

as others have said

this is essentially PAYE for the self employed.  Crazy or not I am not sure we will be short of work.  That said I can't wait to see how any AIAs are dealt - large refund (which will take months to be paid?)...or maybe AIAs will disappear too....for the small guys anyway. 

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By Rebecca Cave
26th Nov 2015 17:28

Who checks that the online tax calculation is correct?

All this talk of digital accounts, quarterly reporting,and paying tax in real time, assumes that the software behind the tax calculations is correct and in line with tax law. Who checks that this is the case? Is there an independant body - separate from HMRC -  that sets the standards that tax software has to meet? No? If not why not?

 

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Teignmouth
By Paul Scholes
26th Nov 2015 19:27

@paulgrca.net

In all cases where I've worked with clients to get their books into a fit state, usually to get them to do most of the basic work themselves, their costs have reduced, not increased.  There tends to be a collusion here with the accountant telling the client that bookkeeping is beyond them and the client believing it, because that's all they have ever known.

NH's example was a small builder, with a show box and, whilst that sort of non-bookkeeping may have been the norm years ago, it really shouldn't be today.  In a couple of clients like this that I dealt with over recent years, I got a local bookkeeper involved with one, to set up a simple cash book, that the client & his wife ended up keeping and with another I gave her daughter a few spreadsheets to keep for her.

With the larger (though still micro) businesses Cloud accounting has revolutionised how they, and I keep there books up to date and accurate.  

Surely it's in everyone's interest to work towards this ideal or, turning it on its head, if a new business came to you, not knowing what it was all about, would you advise them to pay no attention to bookkeeping and just give them an empty shoe box?  Who's driving this?

 

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Teignmouth
By Paul Scholes
26th Nov 2015 19:45

@NH

This is a chicken & egg thing.  43 years ago, nobody was required by law to prepare quarterly accounts, up to date, then, overnight, hundreds of thousands, if not millions were, and so the "fear of change" situation is identical.

Now however we are not constrained by paper books and shoe boxes, we can prepare and issue invoices from our phone, and download bank statements for goodness sake. Keeping basic records up to date once a quarter is not rocket science, and if it is then, as I say, perhaps the business owner is in the wrong business or perhaps the accountant has an agenda.

You say: "all businesses that are used to handing in records that the accountant turns into accounts and tax returns will not be able to do this themselves"

I hate to state the obvious but, in my 40+ years in the biz, and certainly in 2015, we are being unrealistic in getting used to anything and we do our clients a disservice by suggesting that they stay in a rut.  

The "ignore change it will go away" ethos just plays to the public's view of reactive, quill waving bean-counters.

 

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By Elvis11
26th Nov 2015 19:50

Crackers

Accountants have every right to have concerns given HMRC's record in implementing change and the complete lack of understanding policymakers have regarding self employment.

We haven't seen any substantive detail yet, but the phrase from the Autumn Statement press release: "self employed people will be required to keep track of their affairs digitally and update HMRC at least quarterly reducing errors through record keeping" is meaningless tripe.

Further twaddle was spouted by Jim Harra (HMRC Director General Business Tax) in the interview published in Taxation magazine with this great line: "Digital accounts will simplify and in many cases remove the reporting burden for taxpayers". Really? So quarterly returns (no doubt with an annual reconciliation as well) will remove any burden from dealing with HMRC. Great news!

The only possible way I can see this working would be through the introduction of some sort of flat rate expense deduction system (a variant on VAT flat rate) based on cash accounting, with quarterly tax payments made on this basis.

Alternatively and perhaps more likely, there is actually a grand plan to categorise accountants (see Taxation article 26/11/15) so that in reality only "approved" accountants will have the necessary "enhanced status" to access HMRC systems fully in order to facilitate this change.

So HMRC will be able to cut staff numbers and office numbers (already happening), wash their hands of understanding the absurdly complex tax system we have (already happening), focus their compliance work on agents and get quarterly tax receipts.

Some accountants may well be happy to play along, but other accountants may well take the view that being effectively coerced into becoming a quasi privatised part of HMRC wasn't what they signed up for and they'll consider other options.

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By North East Accountant
27th Nov 2015 09:29

Reduced Quality

With Quarterly or even monthly pressure to report I imagine the quality of accounts will decline.

Fee pressure will be immense as costs have to increase to cover the additional work clients will move to lower priced operators, many of whom will just lash figures together that look good.

Anyone who wants to do a proper job will be competing on an uneven playing field, much as now but with massive pressure to do a lot more work for not much more money or even less. 

 

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Small Dog's RAT Return
By Oldmanwetmix
27th Nov 2015 09:43

Might shake things up a bit

We've a client who carries out most of his work for local authorities, NHS, and schools & colleges. He has difficulty getting them to pay within a quarter. This will either have to be a cash accounting tax system or the government will have to pay out quicker which will lose the advantage of getting the tax in quicker....bet they haven't thought of that one

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By eppingaccountant
27th Nov 2015 10:24

Digital Tax Accounts

There seem to be far too many changes coming in to tax and accounting for changes sake.  The quarterly account proposal sounds rather like the system they have in Australia (IAS's).  It is simply to bring forward the timing of the Treasury's tax receipts and will add a massive administrative and costly burden to small (in fact all) businesses.  I agree, the Chancellor should be taking advice from people in the real world before implementing new schemes.  Another classic example is the requirement to pay CGT on buy to let gains within 30 days of sale from 2019, I believe.  How will this work in practice?  It may be difficult to have all the information to hand within 30 days, especially if earlier periods of PPR have to be calculated for those who lived there on and off originally, missing or mislaid purchase completion statements and an inability to calculate whether you are an 18% or 28% payer for the tax year in question and if you have/will make any other gains in the year, how much of your annual CGT exemption is still available.

The Chancellor should not bring in any new tax procedural rules until a panel of say 12 qualified accountants in practice have thought it through from their perspective and reported back with their findings.

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By AndrewV12
27th Nov 2015 12:38

With all things being even, after the first 4 quarters.....

After the first year of collecting tax and NI in advance, with all things being even,  the advantages/ gains of the scheme will have gone.

I think I have my facts right, or do I ? 

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By steve 12321
07th Dec 2015 19:15

Payments on account instead?

AndrewV12 wrote:

After the first year of collecting tax and NI in advance, with all things being even,  the advantages/ gains of the scheme will have gone.

I think I have my facts right, or do I ? 

Not correct - the system will save time and money for the business owner - do you not listen?   If only.

All these changes for the government to "save money" by cutting staff and making changes just costs the country (taxpayer) a fortune in increased admin, lost productivity and stress.   It's mad - totally mad and unfair. These ideas to increase accounting can only be aimed at accelerating tax payments.So why not just do that instead?  But perhaps with no penalties if we get it wrong - worst a little interest if they must bearing in mind that profits are not quite the same as cash in the bank straight away.

Bring the POA's forward and job done and leave as it alone.  Self-employed can have a fair idea what they have earned so they can pay on account earlier. Companies the same. It will at least help avoid  the situation where the tax money is not available when the time to pay comes.  We can simply apply the tax paid against  the correct tax annually as we do already. In fact its not a bad idea to do that and leave it alone. Maybe a transitional period to apply it to lessen the hardship that could occur?

Too easy really - why cant they ask us and listen?  

 

 

 

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By AndrewV12
10th Dec 2015 09:42

Save time and money, funnest thing I have heard today

steve 12321 wrote:

AndrewV12 wrote:

After the first year of collecting tax and NI in advance, with all things being even,  the advantages/ gains of the scheme will have gone.

I think I have my facts right, or do I ? 

Not correct - the system will save time and money for the business owner - do you not listen?   If only.

All these changes for the government to "save money" by cutting staff and making changes just costs the country (taxpayer) a fortune in increased admin, lost productivity and stress.   It's mad - totally mad and unfair. These ideas to increase accounting can only be aimed at accelerating tax payments.So why not just do that instead?  But perhaps with no penalties if we get it wrong - worst a little interest if they must bearing in mind that profits are not quite the same as cash in the bank straight away.

Bring the POA's forward and job done and leave as it alone.  Self-employed can have a fair idea what they have earned so they can pay on account earlier. Companies the same. It will at least help avoid  the situation where the tax money is not available when the time to pay comes.  We can simply apply the tax paid against  the correct tax annually as we do already. In fact its not a bad idea to do that and leave it alone. Maybe a transitional period to apply it to lessen the hardship that could occur?

Too easy really - why cant they ask us and listen?  

 

 

 

 

Sorry Steve, the new proposed system will not save time and money for the business owner...do you not listen ...if only.

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By Ammie
27th Nov 2015 15:15

WE WILL ADJUST, WE'LL HAVE TO.

I agree with much of the aforementioned comment but the reality for micro businesses is that they will continue to drag their feet in dealing with their record keeping, however many fines and deadlines HMRC dish up.

It would be a dream to have clients that have efficient record keeping systems, but for the small practitioner that is not the real world. Too much time is spent picking the bones out of heaps of paper and for those clients that have "had a go" its often the case that picking the non relevant or errors out of those can take just as long.

I spend far too much time driving the message home to such clients and most hear but don't listen and certainly do not act.

It will be a steep and expensive learning curve for everyone and heaven for the unaccountable "accountant" or agent that works on "creativity".

I expect many one man bands will tire and opt out of business for hassle free PAYE, maybe that is part of the plan, who knows.

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Teignmouth
By Paul Scholes
27th Nov 2015 16:06

@Ammie

Your post reminds me of the posts that are frequently made on discussions about grading clients A-D and removing Ds and improving Cs. 

I am a sole practitioner and for years the vast majority of my clients have been micro businesses.  You talk about the "real world" for our sort of practice but mine is nothing like yours as years ago I made the decision not to deal with clients that brought me rubbish or who couldn't be bothered to listen to me.

So yes, there are probably a huge number of businesses who will not cope with this but it doesn't mean we have to suffer with them.

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By Nemesis
27th Nov 2015 21:45

Detail still to come

Easy to imagine the worst - but look around you and see how digital has transformed other aspects of our lives - about time that tax caught up.

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By Laurence52
30th Nov 2015 11:54

ICAEW Tax Faculty

The ICAEW's Tax Faculty's report on the Autumn Statement:

http://www.ion.icaew.com/TaxFaculty/documents/download/?FsId=707b497c-7d...

From the overview it summarises its views on the proposals for data reporting with:

As John McEnroe said: ‘you cannot be serious’.

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By Nemesis
30th Nov 2015 16:18

Serious? Of course

If you think of digital transformation as simply the digitisation of existing processes then you might be misled into thinking that quarterly reporting means four sets of accounts or four returns. But we will all have had some personal experience of the fact that digital can be more truly transformational than that. 

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