"Tax returns to be abolished"

[Justin Smith]

Did I hear this right on the radio ?
Surely I`ve got the wrong end of the stick here ! The BBC headline is :


End-of-year paper tax returns will be scrapped in favour of "real-time" online accounts by 2020, Chancellor George Osborne announced

How is that going to work exactly ?
And more to the point, is it just me or are you all sick to the bleedin` back teeth at having to waste your time having to learn new stuff every year (tax wise and PAYE wise etc) ? And when you don`t understand it trying to phone the buggers up (to find out what you`re supposed to do) takes forever to even get through.... And they`re not even paying us to collect all that tax/NI for them ! Let`s remember we`re doing them a bleedin` favour !

 

[Nuno]

Get an accountant.

 

[Tim Coulter]

Get an accountant.

Shouldn't the purpose of an accountant be to add value to a business by offering it greater insight into its financial position?

To suggest that every business must treat their accountant as a compliance cost is not only an injustice to accountants but also an acceptance of the regrettable fact that we pay far more in taxes than the amount indicated by our tax assessment.

 

[Justin Smith]

Are we saying the government keeps changing everything so as to make it harder for people to do their own books so as to "encourage" them to employ an accountant ?
Or am I just being cynical ?

 

[Justin Smith]

Shouldn't the purpose of an accountant be to add value to a business by offering it greater insight into its financial position?

To suggest that every business must treat their accountant as a compliance cost is not only an injustice to accountants but also an acceptance of the regrettable fact that we pay far more in taxes than the amount indicated by our tax assessment.

I do my own books and I find it helps me very much keep a feel on the business, costs and income streams etc.

 

[mbd7]

it's always a budget for accountants, what about if you have more than one savings account and your now paid gross not net, work for accountants etc etc and it goes on and on, always has been

 

[Tim Coulter]

I do my own books and I find it helps me very much keep a feel on the business, costs and income streams etc.

Yes, me too. I'm not denying the value or importance of good accounting support, but I don't think it should be wasted simply on complying with the HMRC's over-complicated and ill-conceived procedures.

I also agree with you that getting support from HMRC is a nightmare.

 

[mbd7]

the correct answer to the above discussion will depend upon the size of business, type of business and turnover in terms of complexity. Also how much your time is worth. If your time is better spent earning the business more money then get an accountant to do it! as the saying go, if you got a dog dont bark

 

[Tim Coulter]

Are we saying the government keeps changing everything so as to make it harder for people to do their own books so as to "encourage" them to employ an accountant ?

I don't think it's deliberate. It's just that the imbeciles at HMRC who design the systems and procedures are so far removed from the reality of running a business that they have no idea of the pain that they inflict when they add even more complexity on top of their existing mess.

 

[mbd7]

Tim that's not their problem, their job is to tax and collect. Vat change costs business to move from 17.5% to 20% - Govt isn't interested, it's our job to collect their money for them, our problems are our problems - as they see it - I wouldn't expect the HMRC to care about your business, the same as regulators won't care about their cost to your business or commercial reality, it's simply not their problem, as they see it, it's yours

 

[Nuno]

Shouldn't the purpose of an accountant be to add value to a business by offering it greater insight into its financial position?

To suggest that every business must treat their accountant as a compliance cost is not only an injustice to accountants but also an acceptance of the regrettable fact that we pay far more in taxes than the amount indicated by our tax assessment.

No. The purpose of an accountant is to offer expert professional accountancy services as needed. This can be done for companies or individuals. The function often will 'add value' but can also advise on legality, timing and the arcana that an ordinary business person won't know.

Accountants are a compliance cost unless you want to spend hours reading up and doing it yourself. Following employment laws are also a compliance cost. There are costs involved with being self employed or running a business. And?

However I support your position that it is an injustice to accountants. I'm sure accountants up and down the country are feeling outraged and oppressed that legislation and circumstance more or less guarantees them a bread and butter income. .~

The thread started (with a very misleading headline) with a moan about not being able to deal with the HMRC system. Millions can, either by themselves or by employing help. There is really a problem here? Different people having different skill sets?

Madre Dios.

 

[Tim Coulter]

Tim that's not their problem, their job is to tax and collect. Vat change costs business to move from 17.5% to 20% - Govt isn't interested, it's our job to collect their money for them, our problems are our problems - as they see it - I wouldn't expect the HMRC to care about your business, the same as regulators won't care about their cost to your business or commercial reality, it's simply not their problem, as they see it, it's yours

All of that is true, but that doesn't make it acceptable. Each of these organisations has their own remit and priorities and I don't expect them to concern themselves with the goals or needs of my business or yours.

However, at the macro level, it's one of the responsibilities of government to create a favourable environment for business to flourish, and that includes reigning in it's various departments that add unnecessary overhead. This is especially important, given that small business increasingly represents the growth opportunities of the future.

 

[Nuno]

Is the overhead unnecessary? Or how much of it is?

And is the economy dependent on small business? The figures are slightly old but this suggests that a mere 7% of companies give half the growth, even though 90% of companies are small.

BTW it is 'rein in' as in horses, not 'reign in' as in queens.

 

[Tim Coulter]

Is the overhead unnecessary? Or how much of it is?

Sure, it's a very difficult issue to quantify, but it certainly feels as if we're increasingly weighed down by overhead that we previously managed to live without.

7% of companies give half the growth, even though 90% of companies are small.

OK, but that that's a classic example of the Pareto principle at work. If I understand your stats correctly, it's still possible for the contribution of the 7% to be disproportionately made by smaller companies. Larger companies have more predictable growth, whereas smaller companies represent a much wider spectrum of growth levels. The tiny minority that achieves meteoric growth more than compensates for the ho-hum performance of the majority.

BTW it is 'rein in' as in horses, not 'reign in' as in queens.

Thanks

 

[Nuno]

Pareto? Nice try. Grasping a tad.

 

[e-vulture]

Isn't this a non-announcement ? They are simply doing away with paper returns as far as I understand it. The new-fangled "digital real-time tax account" will just be the existing SA gateway, maybe with a few prettier buttons and a few wrong figures added in from some randomly selected sources...

 

[Paul Norman]

Isn't this a non-announcement ? They are simply doing away with paper returns as far as I understand it. The new-fangled "digital real-time tax account" will just be the existing SA gateway, maybe with a few prettier buttons and a few wrong figures added in from some randomly selected sources...

You are correct. It is this. Like most of what came out of the Chancellors face yesterday, it was wind.

 

[Bob]

Look at page 5. HMRC want you to link your accounting software to your digital tax account

 

[Newchodge]

This has been done purely to save HMRC some work at the end of March/beginning of April, and spread it through the year. Also to get some cash flow through the year for the government, rather than all self employed tax being paid at the same time.

It is not an attempt to help small businesses, however the Chancellor may dress it up. Or lie about it as I prefer to put it.

 

[mtools]

This has been done purely to save HMRC some work at the end of March/beginning of April, and spread it through the year. Also to get some cash flow through the year for the government, rather than all self employed tax being paid at the same time.

It is not an attempt to help small businesses, however the Chancellor may dress it up. Or lie about it as I prefer to put it.

is there that much coming in end of march / april? i mean in comparison to VAT that is coming in 12 months a year (depending on what quarters your VAT returns are filed on and if there is any predisposition to particular quarters)?

 

[Newchodge]

is there that much coming in end of march / april? i mean in comparison to VAT that is coming in 12 months a year (depending on what quarters your VAT returns are filed on and if there is any predisposition to particular quarters)?

It actually comes in end January, and it would be a huge amount, involving half all non-PAYE personal tax. VAT is a separate issue. March/April is probably the wrong period, however with all self assessment tax years ending at the same time, and all tax returns due at the same time there is a peak work period for HMRC (and for accountants), which this may prevent.

 

[Justin Smith]

All of that is true, but that doesn't make it acceptable. Each of these organisations has their own remit and priorities and I don't expect them to concern themselves with the goals or needs of my business or yours.

However, at the macro level, it's one of the responsibilities of government to create a favourable environment for business to flourish, and that includes reigning in it's various departments that add unnecessary overhead. This is especially important, given that small business increasingly represents the growth opportunities of the future.

To put it more simply, why don`t they just stop effing changing things all the bleedin` time..... I`ve got better things to do with my time than constantly having to relearn stuff, though Microsoft etc are probably as much to blame in that respect as anyone else !
I`d be quiet happy if a multi party coalition got in at the next election and basically couldn`t do anything for 5 years. I can`t help think that, so long as we all knew that they wouldn`t actually do anything for 5 years, it`d be the best government this country has ever had !

 

[Nuno]

Yes lets ignore anyone in need or how those needs change.
Lets do nothing.
Lets forget about international companies not paying tax.
Lets do nothing.
Lets not licence any new drugs for use in the NHS just because they save lives.
Lets do nothing.
Lets leave our borders open to radicalized, returning jihadists.
Lets do nothing.
Lets let the fittest, healthiest and most violent decide what they want and lets let them take it.
Lets do nothing.
Lets have the Government do nothing for 5 years.
Lets pray that works, shall we?.

 

[Justin Smith]

I thought the Tories in particular believe that less government is better government ? So why are they changing even more stuff than the last lot did.....

 

[Nuno]

When did "change" start meaning either "more" or "less"?

 

[Tim Coulter]

I can`t help think that, so long as we all knew that they wouldn`t actually do anything for 5 years, it`d be the best government this country has ever had !

As economist Milton Friedman famously said "The government solution to a problem is usually as bad as the problem".

 

[Justin Smith]

When did "change" start meaning either "more" or "less"?

If they`re changing more stuff they`re obviously doing more governing......
We want less change and less governing so we can concentrate on running our businesses (and our lives come to that). All these governments get in and change stuff and it makes hardly any difference in the long term anyway. Have we all noticed that all the Western democracies (at the same latitude : UK, Germany, France, Benelux, Scandinavia etc etc) are more or less as wealthy as each other and have been for decades ? Despite the fact they`ve all had different governments at different times doing different things.
There a lesson in there somewhere.

 

[OldWelshGuy]

Nuno you are wrong about the international companies not paying tax thing. as of Monday it is all change. they will now not be able to do what they have done.

As for the new accounts. personally I think it is a fantastic idea, look at how well it works with CIS, this is along the same lines. and will make life a LOT easier for those who simply can't handle paying tax once a year.

 

[Nuno]

But Government activity is shrinking as a % of GDP not growing:

It would seem that your idea that change means growth is wrong in this case.

 

[Bob]

But do you really want your accounting software linked in to HMRC ?

 

[Nuno]

As economist Milton Friedman famously said "The government solution to a problem is usually as bad as the problem".

Yes, all those people in need of a safety net from the welfare state would be so much better off if we just left them alone to solve the problems of feeding and clothing their children.

 

[Nuno]

Nuno you are wrong about the international companies not paying tax thing. as of Monday it is all change. they will now not be able to do what they have done.

No, that was precisely my point: I was arguing against a poster who seemed against all change and I gave examples why change could be good. The sardonic tone of my post had a clue at the end:
"Lets pray that works..."

BTW: I only heard a report of that change, on the BBC, which was incomplete. But I don't see how it can be done without changing EU legislation, which is unlikely to happen, hence the move to Brexit. Brexit however won't happen in the next parliament, so I'm assuming this is an empty boast by Osborne to entice low information voters.

 

[Justin Smith]

I think the thing which annoys me most about all the tax and PAYE changes they keep introducing is that those of us who do our own books and wages only do the end of year stuff once a year. Now I don`t know about everyone else but there`s no way I can remember one year later how to do it so I keep print outs / photocopies of what I did last year and just change the figures to suit. The problem is that they seem to be changing everything every bleedin` year so I can no longer do that. So something which should only take me half an hour (without having to fight to get through to HMRC....) takes me an age and several calls to HMRC. And whilst I`m on the subject am I the only one who is totally p****d off with the HMRC repeatedly advising you "you can use their website" as you hold in a queue. Talk about stating the bleedin` obvious. We know that, we don`t need the HMRC hinting they`re not actually interested in talking to us because it`d be cheaper for them if we just used their website......

 

[Justin Smith]

No, that was precisely my point: I was arguing against a poster who seemed against all change and I gave examples why change could be good. The sardonic tone of my post had a clue at the end:
"Lets pray that works..."

BTW: I only heard a report of that change, on the BBC, which was incomplete. But I don't see how it can be done without changing EU legislation, which is unlikely to happen, hence the move to Brexit. Brexit however won't happen in the next parliament, so I'm assuming this is an empty boast by Osborne to entice low information voters.

Obviously I was exaggerating for the sake of effect when I said I didn`t want the government to be able to do anything. I`d prefer it if they really couldn`t change very much. But the point is a change in tax law which I`d have thought would have cross party support and which affects a relatively small number of companies trying to move their profits offshore isn`t really going to affect the vast majority of people or businesses in the UK (other than the fact they might see their tax bill drop by a small amount). Businesses or the great British public aren`t going to have to change their systems or relearn how to do stuff or whatever.

 

[Nuno]

I agree with most of that Justin, and personally think it probable that increasing the staffing of HMRC would be more than covered by the increased, on-time tax paid, as well as decreasing the pissoff levels of HMRC's "customers" or "stakeholders" or whatever their dipstick consultants call us now.

As was covered in another thread about a month ago, the core problem is the vast complexity of the tax laws. Radically simplify those, ignoring the bleats of various one issue pressure groups and we would have a world beating system, which would help existing businesses and encourage new ones.
(No I haven't been taking drugs. It could, maybe, sometime, nearly, happen!)