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Changes to submitting tax returns



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SPCleaning

I received the following from the accountant today,

 

You may well have started to hear this phrase so we thought that a summary of what it is, who it will effect and when it will effect, may be of use.

 

What is Making Tax Digital?

Making Tax Digital will make it a legal requirement for businesses to keep their records digitally.

 

From April 2018 sole traders, partnerships and those with rental income will need to start sending quarterly accounts electronically to HMRC. Limited companies will not need to start until 2020.

Eventually it will be compulsory for businesses and landlords with income over £10,000 but to start it is likely to be compulsory for those with income over the VAT threshold (currently £85,000), but this hasn’t yet been confirmed.

Within a month of quarter end, tax payers will need to submit Profit and Loss numbers to HMRC. 

After the 4 quarters have been submitted, then there is a 5th submission to bring in any annual and tax adjustments so that the 5 added together will be the equivalent of your yearend accounts and tax return.

 

Sounds like great fun....

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laddergarder

It's to stop people running into debt. As it is you pay your tax 9 months after your end. If you haven't made payments on account.

 

With potentially thousands sitting on ballance, business are using it to get by but not making it back in time for the 31st.

 

With the new rules accountants will be able to issue profit warning earlier, hopefully reducing the number of business going out if business.

 

Also allowing small business owner like ourselves to do tax planning a bit better.

 

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Iron Giant

Its good in theory to prevent people burying their heads in the sand and losing their business, But submitting quarterly accounts will mean 3 times more payments to accountant thus putting some business under more strain and raking in the goverment more money from small business owners 

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SPCleaning
9 minutes ago, Iron Giant said:

Its good in theory to prevent people burying their heads in the sand and losing their business, But submitting quarterly accounts will mean 3 times more payments to accountant thus putting some business under more strain and raking in the goverment more money from small business owners 

It is making me consider, no longer using an accountant and getting a suitable computer software that I can fill in daily and submit at the touch of a button every quarter.

 

I no longer feel that my accountant gives value for money, as I keep everything up to date on spreadsheets and put everything in order. It was fine when I was paying £300 a year, but last year it went up to £650 and they did nothing more than any other year. (The company was taken over by a much larger accountancy)

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Hawke

We'll also be required to purchase particular software to submit these quarterly returns, some accountants are offering discounts on the software so it may make as much sense to stick with your accountant and bite the bullet.

 

Either way, completely free accounting will be a thing of the past...

Edited by Hawke
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Hawke

It will be implemented when the changes to SA begin, probably with similar paramaters.

 

IE - VAT reg'd SA first, then those below VAT then all or however HMRC proceeds.

 

However this is already in place for PAYE/RTI so there's no doubt it will come in for SA too as its a big part in their plans to overhaul the online service. 

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adamangler

As sole trader no one needs an accountant. Its not hard to record what you've earn and what you've spent surely

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Hawke

"MTD is not coming into effect until April 2018, and the announcement of the general election on 8 June 2017 provided an opportunity to withdraw these clauses and Schedule from the Finance Bill which will be debated today and likely to be enacted on 27 April. These seminal clauses and Schedule can be reintroduced after the election which will allow more time for proper scrutiny. Pending reintroduction of the provisions after the general election, the government should prioritise addressing the detailed questions that have been raised about how MTD will work in practice. We believe that this is a logical and pragmatic decision which will help ensure the government gets MTD right the first time."

 

Quoted from: https://www.accountancyage.com/2017/04/25/government-removes-making-tax-digital-from-finance-bill-2017/

 

HMRC haven't updated anything online since the bill was voted down in April so the official word is these changes will take effect for those who are VAT registered from April 2018.

 

The details may change and parameters move but these plans have been put into motion when RTI was rolled out about 5 years ago so they are coming to some extent in the near future which is probably why Accountants are contacting their clients to prepare them for it.

 

 

 

I found this article quite interesting too:

 

https://www.accountancyage.com/2017/06/16/making-tax-digital-what-might-hmrcs-penalties-model-look-like/

 

Looks like there is still some wrangling to be sorted out but HMRC often oush ahead and roll out their legislation before everyone is happy with it (and before they've trained their staff too)

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laddergarder

I am fairy fortunate as my accountant is my wife, and haven't had to pay for accountancy services. As I also run a payroll, my bill annually would around £1000.

I know it easy for me to say when I get it for free, but some things are just a cost of doing business you can't be avoided.

Over the years the accountancy advice I have had has saved me big time, and would be dubious about leaving it to a software package to handle. The rules just change so much. An accountancy firm can advise on tolerances on different rules like use of home percentages for similar business. Which vans you can get as a straight expense and which will have to go through as capital assets.

The government really does make it overly compicated. I don't envy large business who have money going in and out everywhere, trying to plan for tax bills.

But it is what it is.

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Iron Giant
As sole trader no one needs an accountant. Its not hard to record what you've earn and what you've spent surely



I used to do my own, But I have found my accountant has saved me more money than he costs.

I was expecting a £6,000 tax bill this coming January and it's come in a lot less.

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Tuffers

I've had the letter come through today. All change in 2020! My accountant charged me £350 last year to do my tax return. I send him all my receipts and earnings and he sends them off. Now I'm thinking will he charge me more because I have to submit 4 times a year, if it's all got to be digital will I have to send him everything digitally? How the feck do I do that? Why does life get more complicated?

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Cleanco

I’ve not had this letter yet but I started using quick books over the last couple of months. It stores everything (all income and expenses)digitally by linking directly to your bank accounts. You can even snap pictures of all paper receipts and invoices to convert them to digital also. It’s hmrc compliant as well so makes life easier when it comes to doing your tax return, it even has a built in SA103F form. Tbh apart from advice on what you can and cannot claim for there’s no need for a sole trader to even have an accountant any more and I’m thinking of sacking mine off as the .gov website is really good now for getting all the info you need on claims etc. 

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Iron Giant
7 hours ago, Tuffers said:

I've had the letter come through today. All change in 2020! My accountant charged me £350 last year to do my tax return. I send him all my receipts and earnings and he sends them off. Now I'm thinking will he charge me more because I have to submit 4 times a year, if it's all got to be digital will I have to send him everything digitally? How the feck do I do that? Why does life get more complicated?


It's a digital tax return and that's it and there is a list of recommended software on the HMRC Website apparently it's to stop you getting a shocker tax bill at the end of the year claims HMRC it's just a big fiddle imho as anyone running their own business should know roughly what their tax bill is going to be, it looks like a simple 10 minute job once set up. 

On this website https://www.absolutetax.co.uk/products/doing-your-own-tax-return there is a video and it looks simple, so no doubt there may be a hike in accountant fees but I can't see them charging 4 times what they charge now otherwise a lot would just jump ship and pay £25 for some software and do it themselves. 

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Cleanco
26 minutes ago, Iron Giant said:


It's a digital tax return and that's it and there is a list of recommended software on the HMRC Website apparently it's to stop you getting a shocker tax bill at the end of the year claims HMRC it's just a big fiddle imho as anyone running their own business should know roughly what their tax bill is going to be, it looks like a simple 10 minute job once set up. 

On this website https://www.absolutetax.co.uk/products/doing-your-own-tax-return there is a video and it looks simple, so no doubt there may be a hike in accountant fees but I can't see them charging 4 times what they charge now otherwise a lot would just jump ship and pay £25 for some software and do it themselves. 

What’s the difference between the absolute tax software and the free one you get through the hmrc site?

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Tuffers
2 hours ago, Iron Giant said:


It's a digital tax return and that's it and there is a list of recommended software on the HMRC Website apparently it's to stop you getting a shocker tax bill at the end of the year claims HMRC it's just a big fiddle imho as anyone running their own business should know roughly what their tax bill is going to be, it looks like a simple 10 minute job once set up. 

On this website https://www.absolutetax.co.uk/products/doing-your-own-tax-return there is a video and it looks simple, so no doubt there may be a hike in accountant fees but I can't see them charging 4 times what they charge now otherwise a lot would just jump ship and pay £25 for some software and do it themselves. 

 

My accountant sends my tax return digitally now. So in theory I'd have to give him my paperwork every 3 months and instead of every 12 months? Utter ballache!

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Incheck

I just rang my accountant on this subject as it is a bit worrying. They have told me that currrntly we can submit our paperwork to them annually as we have been for previous years. The current changes are concerns to those who are VAT registered. Got to say i feel for them. I’m not exactly a tech or digital wizz and commiting 4 days a year to tax returns would just about take the mick, if  changes come our way i may well think about finding a job and becoming an employee again because for all the stresses of being self employed it hardly seems worth it sometimes 🙄

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Tuffers
19 minutes ago, Incheck said:

I just rang my accountant on this subject as it is a bit worrying. They have told me that currrntly we can submit our paperwork to them annually as we have been for previous years. The current changes are concerns to those who are VAT registered. Got to say i feel for them. I’m not exactly a tech or digital wizz and commiting 4 days a year to tax returns would just about take the mick, if  changes come our way i may well think about finding a job and becoming an employee again because for all the stresses of being self employed it hardly seems worth it sometimes 🙄

 

I've just been thinking the exact thing. Go to work and pick up your money, what could be easier? Apart from earning less money!

 

My accountant rang me earlier and basically if you're a sole trader not VAT registered then you have just under 2 years submissions before you go digital as you can submit your return in March 2020 ahead of the deadline. He is giving out 'Quickbooks' free to his customers and he said his prices won't be going up although it is going to be time consuming for him. I'm going for a meeting with him next month and he's going to go through everything with me. I like the idea of the vehicle tracker on the app as I do about 500 miles a week some would think I was stretching the truth slightly with my mileage. I use 'George' and I'm a bit unsure how I'll get that information onto the app. Would it mean I would have to input all my work into the app?

 

I hope I win the lottery within 2 years and the I can feck it all off.

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Incheck
Posted (edited)
1 hour ago, Tuffers said:

 

I've just been thinking the exact thing. Go to work and pick up your money, what could be easier? Apart from earning less money!

 

My accountant rang me earlier and basically if you're a sole trader not VAT registered then you have just under 2 years submissions before you go digital as you can submit your return in March 2020 ahead of the deadline. He is giving out 'Quickbooks' free to his customers and he said his prices won't be going up although it is going to be time consuming for him. I'm going for a meeting with him next month and he's going to go through everything with me. I like the idea of the vehicle tracker on the app as I do about 500 miles a week some would think I was stretching the truth slightly with my mileage. I use 'George' and I'm a bit unsure how I'll get that information onto the app. Would it mean I would have to input all my work into the app?

 

I hope I win the lottery within 2 years and the I can feck it all off.

Yeah man it’s depressing. I don’t want my accounts digitalized. My latops 5 years old and on the blink, its only just about good enough for printing the odd receipt or letters for annual price rises, i don’t have a computer. i just have my mobile phone and i’m constantly on it as it is between emails, texting and phone calls. It’s like our entire lives are going to have to live through the screen of a smart device. 

Everything i’ve ever done has been on paper. What if the laptop crashes, phone gets lost, data gets wiped or otherwise?. Utterly ridiculous. It’s forcing peoples hands and i don’t like that. it’s no wonder so many british people emmigrate, governments a sham, no-ones worth voting for, they’ve always got some new nightmare on the horizon we have to contend with & they can’t keep anything the same. Suicide rates are sky high as well it’s not hard to see why, red tape & regulation everywhere & nothings simple anymore 🙄

accountants are the most at threat from digitilization, i really feel sorry for them they do an excellent job for us and to feel it may be a bygone trade in a decades time is awful. All those good people who are highly qualified, gone. It will be the same for other indistries i fear.

 

Edited by Incheck

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THL4KEL
Posted (edited)

I think its basically the same the world over in developed countries, our leaders want every penny/cent tracked and recorded.

 

Probably sooner than we think we will be in cashless society where every transaction is analyzed/monitored by high tech software... 

 

 

 

 

Edited by THL4KEL
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Leeds
3 hours ago, Incheck said:

Yeah man it’s depressing. I don’t want my accounts digitalized. My latops 5 years old and on the blink, its only just about good enough for printing the odd receipt or letters for annual price rises, i don’t have a computer. i just have my mobile phone and i’m constantly on it as it is between emails, texting and phone calls. It’s like our entire lives are going to have to live through the screen of a smart device. 

Everything i’ve ever done has been on paper. What if the laptop crashes, phone gets lost, data gets wiped or otherwise?. Utterly ridiculous. It’s forcing peoples hands and i don’t like that. it’s no wonder so many british people emmigrate, governments a sham, no-ones worth voting for, they’ve always got some new nightmare on the horizon we have to contend with & they can’t keep anything the same. Suicide rates are sky high as well it’s not hard to see why, red tape & regulation everywhere & nothings simple anymore 🙄

accountants are the most at threat from digitilization, i really feel sorry for them they do an excellent job for us and to feel it may be a bygone trade in a decades time is awful. All those good people who are highly qualified, gone. It will be the same for other indistries i fear.

 

book keepers will be threatened, A good accountant is a good business adviser too, now that trade won't be going out any time soon.

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THL4KEL

Accountants do lots of other jobs, i.e Project Managers, Project Controls monitoring all aspects of  a business. They will always have a job the good ones.

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Iron Giant
Posted (edited)
20 hours ago, Tuffers said:

 

My accountant sends my tax return digitally now. So in theory I'd have to give him my paperwork every 3 months and instead of every 12 months? Utter ballache!


Personally, I don't see any issue with this at least not for me my accountant is in the same town I work in so dropping off paperwork at the reception will take me 5 minutes and I keep all my accountants up to date all the time. 

Also, on the whole, I see no issue with going digital I did years ago by using Aworka and now Cleaner Planner every single transaction is recorded, it's the pen and paper lads and the cash in hand boys who are going to feel hard done by more so the cash in hand boys as I can see HMRC wanting more detailed accounts in the future. 

Edited by Iron Giant

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