The abolition of Tax Returns...

Pavilionaire · Mar 19, 2015

As an accountant I've just called my professional body about Chancellor Osborne's abolition of Tax Returns announcement in yesterday's Budget. Their response: there was no consultation process about this - the government and HMRC just went ahead and did it, there is only a 9-page HMRC White Paper about it and no other documentation to shed any light re the technicalities, filing or implementation requirements, nobody knows when the nitty-gritty will be published and nobody knows when "early 2016" - the start date - actually is.

The technical advisor I spoke with was candid in his pessimism. My professional body hastily emailed all members immediately after the Budget seeking responses saying "Please send your comments, if possible, by close of business on 19 March", so just 28 hours after the Budget!

Don't get me wrong, I think the aims are laudable but the undue haste of this in the run-up to a General Election is astounding. Interestingly, Labour have made absolutely no comment on the subject, they could have agreed with the aim but disagreed with the implementation / timetable, they're just too lily-livered to be seen to disagree with the populist move of getting rid of Tax Returns.

No one comes out of this with any credit. Utter shambles, a disaster waiting to happen.

GreersElbow · Mar 19, 2015

Surely this also opens up a new way to avoid tax. I want a simpler tax system, but this isn't going to be the way forward.

I personally think we need massive tax reform, simplify and then aggressively enforce it. Currently, it's like Swiss cheese..

seagullsovergrimsby · Mar 19, 2015

The price of austerity ? Reduces the headcount in HMRC and promotes the use of new technology at the same time.

ROSM · Mar 19, 2015

As Robert peston said yesterday 'this from the country that spent billions and took a decade to deliver a single nhs computer platform'

perseus · Mar 19, 2015

Stops writing None all over it, and "Accounts to be Submitted".

knocky1 · Mar 19, 2015

2020 is date of everyone being online so plenty of time to adapt. I have completed self assessment returns online for at least 5 years and am very happy with the service.

Would accountants lose out on some work as individuals and companies would have the calculations done by the HMRC?

8ace · Mar 19, 2015

As someone who hates doing their tax return once a year I'm thrilled at the prospect of having to do it every month :facepalm:

Thanks for f*ck all Gideon.

Gazwag · Mar 19, 2015

perseus said:
Stops writing None all over it, and "Accounts to be Submitted".

That hasn't happened since 1996

perseus · Mar 19, 2015

Gazwag said:
That hasn't happened since 1996

Fair enough. I thought I got my last Return about 2000. Still got to do the VAT every three months though.

Gazwag · Mar 19, 2015

8ace said:
As someone who hates doing their tax return once a year I'm thrilled at the prospect of having to do it every month
Thanks for f*ck all Gideon.

Not only that, it is forcing "everybody" to prepare their accounts using a suitable (costly) software package compatible with HMRC's software when there are thousands of small businesses who still operate "on the back of a fag packet".

All that will happen is the black economy will grow.

The other worrying thing is people will rely on HMRC's calculations more and more which of course are correct :facepalm:

beorhthelm · Mar 19, 2015

GreersElbow said:
Surely this also opens up a new way to avoid tax. I want a simpler tax system, but this isn't going to be the way forward..

how do we know when there's little information about what the replacement will be. in my mind they will abolish the "annual tax return" and replace with a "monthly tax submission", essentially the same process but more regular. that might be a good idea for a lot of people to keep track of everything, or really crap for those with erratic earnings. its an interesting policy to spring out from no where.

perseus · Mar 19, 2015

Gazwag said:
Not only that, it is forcing "everybody" to prepare their accounts using a suitable (costly) software package compatible with HMRC's software when there are thousands of small businesses who still operate "on the back of a fag packet".

All that will happen is the black economy will grow.

The other worrying thing is people will rely on HMRC's calculations more and more which of course are correct

What are the best software options nowadays?

They kept changing the rates so that meant upgrading the software (I used Money Manager). It is quicker at the moment to do it on paper.

8ace · Mar 19, 2015

Gazwag said:
Not only that, it is forcing "everybody" to prepare their accounts using a suitable (costly) software package compatible with HMRC's software when there are thousands of small businesses who still operate "on the back of a fag packet".

All that will happen is the black economy will grow.

The other worrying thing is people will rely on HMRC's calculations more and more which of course are correct

I'm very much of "on the back of a fag packet" variety, I'm not cheating anyone (in fact maybe I could get away with paying less) yet now I have to do 12 times a year instead of once except I'll have a bit less adding and x12 to do.
I have no desire to waste any more time on this tedious shite than I have to.

Pavilionaire · Mar 19, 2015

Yes, the annual Tax Return was not popular but be careful what you wish for.

The government and HMRC want Real Time Information that presently applies to all employees and pensioners to extend to the self-employed and directors so they can try and achieve the twin aims of getting the tax in faster AND paying the right amount of universal credits. Yet the prospect of all directors, sole traders, partnerships and those with rental income filing monthly so 12 times a year is a nightmare prospect for all involved.

I wonder if Labour are quiet on this because if they should lose the GE then this could be a HUGE stick to beat the Tories and Lib Dems with in the next parliament (assuming they both supported it as is).

East Preston Gull · Mar 19, 2015

knocky1 said:
2020 is date of everyone being online so plenty of time to adapt. I have completed self assessment returns online for at least 5 years and am very happy with the service.

Would accountants lose out on some work as individuals and companies would have the calculations done by the HMRC?

This, I get my tax return done by mid April, file it using ftax, and usually get a rebate by 10th may. The online gateway runs perfectly.

Official Old Man · Mar 19, 2015

I run a medium business taking around £175K per year employing 5 staff. Life for me gets easier every year. I run the fixed rate VAT system meaning every three months I add up my takings and send the VATman a simple percentage. 5 minutes and job done with no separate VAT books to keep or calculations to make. But I estimate it saves me £30K a year in payments. Staff wages done weekly with electronic returns again takes minutes. I use 12pay.co.uk free wages software and a home made spreadsheet for books transfering to the well known 'D' account book. My accountant charges £130 to check my books once a year, make adjustments, add claims for car etc and fill in my tax return electronically for me.

Pavilionaire · Mar 19, 2015

I remember the good times said:
I run a medium business taking around £175K per year employing 5 staff. Life for me gets easier every year. I run the fixed rate VAT system meaning every three months I add up my takings and send the VATman a simple percentage. 5 minutes and job done with no separate VAT books to keep or calculations to make. But I estimate it saves me £30K a year in payments. Staff wages done weekly with electronic returns again takes minutes. I use 12pay.co.uk free wages software and a home made spreadsheet for books transfering to the well known 'D' account book. My accountant charges £130 to check my books once a year, make adjustments, add claims for car etc and fill in my tax return electronically for me.

How can you be saving £30K in VAT payments? The very lowest Flat Rate Percentage is 4% of gross, so for you that would mean c. £7K of VAT paid. Even if all of your supplies were standard-rated the VAT content in £175K is only £29,167, so a gain of only £22,167. And 4% is for input-VAT intensive business like retailing food, confectionery and tobacco. You might want to take a look at that. At £130 a year I doubt whether it's even crossed your accountant's mind.

Herr Tubthumper · Mar 19, 2015

Pavilionaire said:
How can you be saving £30K in VAT payments? The very lowest Flat Rate Percentage is 4% of gross, so for you that would mean c. £7K of VAT paid. Even if all of your supplies were standard-rated the VAT content in £175K is only £29,167, so a gain of only £22,167. And 4% is for input-VAT intensive business like retailing food, confectionery and tobacco. You might want to take a look at that. At £130 a year I doubt whether it's even crossed your accountant's mind.

Maybe he has the same advisors as Starbucks?

BN9 BHA · Mar 19, 2015

8ace said:
As someone who hates doing their tax return once a year I'm thrilled at the prospect of having to do it every month
Thanks for f*ck all Gideon.

I will look forward to a top rant from you on Twitter every month :angry:

8ace · Mar 19, 2015

bn9 bha said:
I will look forward to a top rant from you on Twitter every month

I need to get a PAYE job :moo:

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