Making Tax Digital

[PJ White]

It's All Saints Day tomorrow, and this is the first post here this year. Scary.

Just wondered if anyone had any thoughts about the digital tax scheme. Are people responding to the consultation?

https://www.gov.uk/government/collections/making-tax-digital-consultations

Deadline 7 Nov.

My instinctive response to doing tax returns quarterly is horror. How much extra will I have to pay the accountant? But maybe this gets rid of the accountant. Or not.

Any thoughts?

PJ

[ch...@whealassociates.com]

My gut reaction is it’s a nightmare. HMRC knows that people who do their accounts themselves pay more tax than they should. People who use an accountant pay less tax because they claim all their entitlements (call it avoidance if you like). They are trying to discourage people from using accountants who know the tax rules and allowances.

If they really want to simplify that then they will have to allow us to coincide our existing VAT quarters with our tax. That would mean either everybody's tax years would be different (can’t see how they'd allow that) or every business would have to finish their tax years - and therefore have their VAT quarters - at exactly the same time. The HMRC could not cope with those workload spikes. 

It ain't going to happen is it?

So the first line that opens "The government is committed to reducing burdens for taxpayers” is total crud.

Chris Wheal
t: +44 20 8694 9412
m: +44 7831 268261

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[PJ White]

Thanks Chris, glad you think it's not a goer.

I think they're nudging people to having their trading year as the tax year. Every solution seems to throw up more problems.

PJ

[ch...@whealassociates.com]

I already use online Sage. I invoice from it and my bank account feeds in direct, but I only have my detailed expenses etc put in once a quarter for my VAT returns. If it can all be synced in terms of timing then I’d probably be one of of the least affected. But my accountant only looks once a year and if my tax were being assessed on a quarterly basis I'd want each quarter’s figures looked at by my accountant first. I have no problem with paying tax quarterly, as long as I am not overpaying.

And the real thing about digital tax would be that everyone’s tax was online for everyone else to see. Imagine being able to see how much tax various categories of workers paid, or streets, or neighbourhoods. Why not make everyone’s tax and income public? Companies that paid groups of workers doing the same job different rates would be exposed, it would be fantastic.

Nope. It’s not going to happen like that is?

Chris Wheal
t: +44 20 8694 9412
m: +44 7831 268261

[PJ White]

It's certainly not going to happen for everyone. I read that "1.4 million small businesses have no digital skills whatsoever".

https://www.accountancyage.com/2016/10/26/making-tax-digital-project-must-be-reset-experts-tell-mps/

Could be tricky for them. And a business opportunity for someone else. Perhaps it's all a scheme for creating private sector jobs.

PJ