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  • FIRST POST
    • chrismac1
    • By chrismac1 13th Jul 17, 5:21 PM
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    chrismac1
    Making Tax Digital gets death of 1000 cuts
    • #1
    • 13th Jul 17, 5:21 PM
    Making Tax Digital gets death of 1000 cuts 13th Jul 17 at 5:21 PM
    Businesses under the VAT threshold "will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020" per the Paymaster General Mel Stride.

    Said an unnamed HMRC spokesman:

    "We brought in Business Record Checks at massive expense and quietly killed it off because we turned out to be rubbish at doing them. We are now doing the same with Making Tax Diabolical. It is unfortunate that we've spent a few billion pounds on these donkey projects, but at least it has not been tens of billions.

    Having analysed the issues, we have conclued that the primary cuase of these aborted projects lies in the fact that we are a prize bunch of plonkers. This means that we dive headlong into ambitious projects with largely unachievable goals, then close our ears to people offering sensible council.

    We have sought legal advice over whether it is possible to rebrand ourselves Hideous Muddles from Right Charlies so that the general public are better aware of the quality service and timely delivery we are able to offer them in this diffcult time of plonkerism."
    Hideous Muddles from Right Charlies
Page 1
    • Pennywise
    • By Pennywise 13th Jul 17, 7:40 PM
    • 9,428 Posts
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    Pennywise
    • #2
    • 13th Jul 17, 7:40 PM
    • #2
    • 13th Jul 17, 7:40 PM
    Finally some common sense in the corridors of HMRC. Such a shame that this fiasco will have wasted millions and caused undue stress. I don't suppose that the plonkers within HMRC/Treasury who were going headlong into this without the foggiest of ideas about it's reality will get sacked?

    HMRC need to concentrate on the auto-population side of things which is where the real time savings and efficiency will come in. There was never any benefit for HMRC to insist on quarterly reporting by business - if businesses want it, they can already do it without being dictated to. If we believe HMRC/Treasury, they never intended quarterly tax payments, so just what was the point of insisting on businesses making quarterly submissions? Likewise, there was no logic as to why they insisted on businesses using software to submit simple totals under a few headings, when it would be just as good to put the figures into the HMRC website portal, like VAT is done today.

    Thank goodness common sense has prevailed and all those campaigning against the speed and dictatorial nature of the proposals, such as all accountancy bodies, various trade and industry bodies, numerous MPs etc have finally been listened to.

    Yes, I know that MTD and digital reporting will eventually come in, but we now have a more realistic timetable. It was crazy to think the software and systems would be ready by next April when HMRC havn't even finalised their tech spec yet.
    Last edited by Pennywise; 13-07-2017 at 7:42 PM.
    • chrismac1
    • By chrismac1 14th Jul 17, 5:43 AM
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    chrismac1
    • #3
    • 14th Jul 17, 5:43 AM
    • #3
    • 14th Jul 17, 5:43 AM
    Note the commonsense most certainly did not originate from HMRC, which as far as we can tell are still 100mph straight for the iceberg. It is the General Election we have to thank for this, and the politicians.
    Hideous Muddles from Right Charlies
    • Pennywise
    • By Pennywise 14th Jul 17, 5:34 PM
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    Pennywise
    • #4
    • 14th Jul 17, 5:34 PM
    • #4
    • 14th Jul 17, 5:34 PM
    Interesting article on accountingweb:-

    https://www.accountingweb.co.uk/tax/hmrc-policy/mtd-hmrc-is-listening

    Finally, finally, HMRC appear to be listening. Quarterly reporting with a timeframe/deadline of just a month, was never, ever, going to happen. Accountants told HMRC that years ago, but they still went head-long thinking they knew best! If they want quarterly reporting, then they need to allow at least 3 months' for the returns to be submitted if they want meaningful figures.

    So "at least" 2020 before compulsory quarterly filing for anything other than VAT, and even that's vague. Could well be kicked into the long grass forever! Businesses who "want" to do it can do, but HMRC and the software firms need a good few years of trials from willing participants before they should think about making it compulsory - 2025 would probably be a good year for compulsion.
    Last edited by Pennywise; 14-07-2017 at 5:38 PM.
    • chrismac1
    • By chrismac1 14th Jul 17, 6:29 PM
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    chrismac1
    • #5
    • 14th Jul 17, 6:29 PM
    • #5
    • 14th Jul 17, 6:29 PM
    2205 would be better!
    Hideous Muddles from Right Charlies
    • CIS
    • By CIS 14th Jul 17, 6:51 PM
    • 10,123 Posts
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    CIS
    • #6
    • 14th Jul 17, 6:51 PM
    • #6
    • 14th Jul 17, 6:51 PM
    HMRC have slowly managed to get some things working well digitally but the overall balance is still well towards the failure side (just like most government departments).

    Craig
    I no longer work in Council Tax Recovery as I'm now a self employed Council Tax advisor and consultant with my own Council Tax consultancy business. My views are my own reading of the law and you should always check with the local authority in question.
    • Pennywise
    • By Pennywise 14th Jul 17, 8:12 PM
    • 9,428 Posts
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    Pennywise
    • #7
    • 14th Jul 17, 8:12 PM
    • #7
    • 14th Jul 17, 8:12 PM
    HMRC have slowly managed to get some things working well digitally but the overall balance is still well towards the failure side (just like most government departments).

    Craig
    Originally posted by CIS
    They should concentrate on the personal side, with the auto-population from pensions & employers, and then hopefully interest from banks which will hopefully take many millions of people out of self assessment.

    Business is complicated and I don't think the people in HMRC have really appreciated the complexities. They've been trying to bring in simplifications such as the cash basis, but even that brings in unforeseen complications, and lenders & buyers of businesses don't want to see cash accounts, they want to see "proper" accounts, so many businesses end up having to prepare accounts on both bases anyway! What a mess!

    They'd be better concentrating on personal tax and leaving businesses alone. I'd rather that they brought in online reporting whenever any company pays a dividend so that the amounts/dates can be pre-populated into the recipient's tax return - that would be far more useful than making businesses submit quarterly accounts for no obvious reason!
    • antrobus
    • By antrobus 14th Jul 17, 9:13 PM
    • 15,299 Posts
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    antrobus
    • #8
    • 14th Jul 17, 9:13 PM
    • #8
    • 14th Jul 17, 9:13 PM
    They should concentrate on the personal side, with the auto-population from pensions & employers, and then hopefully interest from banks which will hopefully take many millions of people out of self assessment....
    Originally posted by Pennywise
    HMRC already get the interest data from banks etc. They already match it with taxpayers.

    I believe that Estonia already pre-populates tax returns. Which is why it apparently only takes five minutes to file your taxes. If the UK got to that stage, then the concept of 'self assessment' would become irrelevant for most people. Everybody would have a digital tax account, and it would simply be a question of whether or not you obliged individuals to confirm its accuracy.
    • badmemory
    • By badmemory 14th Jul 17, 10:13 PM
    • 1,062 Posts
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    badmemory
    • #9
    • 14th Jul 17, 10:13 PM
    • #9
    • 14th Jul 17, 10:13 PM
    Once I realised that MTD did not mean collecting tax quarterly in the way that VAT is I wondered what on earth it's purpose was. I'm still no wiser. Nor can I understand why there isn't a system in place to collect my taxes from me earlier than 9 months after the last payment would normally be due. Don't get me wrong I am quite happy for my tax money to sit in a savings account (with not much interest) for between 9 & 21 months.

    My circumstances are remarkably simple as I am not taking my personal pension yet, although I may do before everything crashes again in 2019. My only income apart from interest is my state pension & they know that before February - before the start of the new tax year. So why not ask me to pay by DD a 12th of the tax due every month?

    Put it another way, sometimes their collection terms do not seem to be fiscally wise.
    • chrismac1
    • By chrismac1 15th Jul 17, 7:38 AM
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    chrismac1
    Badmemory, personally I think that was the hidden agenda of MTD - once everyone starts reporting everything quarterly, it is easy as pie to just shove in a measure to the next Finance Bill to make paying it quarterly.

    In fact quarterly payments are also fine with me as well as most of my clients. If that is what they wanted they could have easily done it at minimal expense with the support of the majority of accountants for the reasons you've stated.

    As above, the vast majority of HMRC staff are utterly clueless when it comes to business, and that comes across in pretty much every post HMRC people put up in these threads on this site. So for that reason, plus the rubbish quality of IT people HMRC have once they have "dealt with IR35 abuse" and driven off all the IT contractors from their operations, MTD was always doomed and I've been saying that in posts for about 2 years so this is not being wise after the event.
    Hideous Muddles from Right Charlies
    • Wayne O Mac
    • By Wayne O Mac 15th Jul 17, 10:45 AM
    • 211 Posts
    • 260 Thanks
    Wayne O Mac
    They'd be better concentrating on personal tax and leaving businesses alone.
    Originally posted by Pennywise
    HMRC compliance yield 2016-17:
    Individuals & small busesses: £4.6bn
    Mid-Sized Businesses: £3.3bn
    Large Businesses: £8bn

    But yes, leave business alone. They can absolutely be trusted to get it right themselves!
    • Pennywise
    • By Pennywise 15th Jul 17, 7:13 PM
    • 9,428 Posts
    • 17,152 Thanks
    Pennywise
    HMRC compliance yield 2016-17:
    Individuals & small busesses: £4.6bn
    Mid-Sized Businesses: £3.3bn
    Large Businesses: £8bn

    But yes, leave business alone. They can absolutely be trusted to get it right themselves!
    Originally posted by Wayne O Mac
    Please explain how forcing businesses to make 6 submissions electronically will tackle tax evasion?

    Those who deliberately evade will continue to evade. MTD wouldn't have made a blind bit of difference to those set on not declaring all their income.
    • chrismac1
    • By chrismac1 15th Jul 17, 7:40 PM
    • 2,469 Posts
    • 1,460 Thanks
    chrismac1
    There are lots of aspects in which, in my view, high level HMRC strategy is fatally flawed. The one I have most experience of is the view that a big chunk of the tax gap comes from the element of the small business sector which files returns on time.

    Anyone from HMRC reading this, this is baloney!!!

    You don't have to take my word for this, HMRC. A few years ago Business Record Checks came in with massive fanfare, HMRC were going to identify the miscreants with their super intelligence, make field visits to them and a massive bounty of underdeclared tax would drop out.

    The result - NADA. That is not because you looked in the wrong place, HMRC, it is because there was NOTHING MUCH TO FIND there.

    Where you need to look is in the small business sector which does not bother with tax returns at all, which operates in every way possible off your radar screen. Often cash in hand or using dubious bank accounts.

    That is where the small business tax gap lives, and my guess is that it probably is at least £10 billion. I personally guarantee you that NOT 1 SINGLE CLIENT of mine forms any part of this, so get lost with the hassle of these honest guys and turn up the heat on the villains.
    Hideous Muddles from Right Charlies
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