Making tax digital - quarterly reporting

The announcement in the Blue book about proposals for mandatory quarterly reporting of accounts information by businesses and landlords was a big surprise to me. I knew quite a bit about HMRC's digital agenda and developments, but the idea that it would be mandatory is not something I had heard before the autumn statement.

I am worried about the impact on smaller businesses and the additional costs they will have to bear, but also the fact that many of my clients will have no hope whatsoever of complying, and for some it won't be worth me trying to educate them.

I thought I would ask members' views, and have the following questions for you. It would really help me to understand this issue better if members could take 5 minutes to give their views.

1.  Do you think your clients want to report quarterly to HMRC - it will after all give them much more control over their tax liabilities which will be calculated quarterly?

2.  What proportion of your clients are sufficiently IT aware to make this possible in the short term (the next year or so)? I appreciate that this is quicker than the proposals indicate, but it tells me the current state of IT literacy in your client base.

3.  Do you regard this as an extra burden in terms of time and administrative costs for small businesses?

4. Have you considered, or are you now considering introducing bank feed software for clients to use, and if so do you think your clients are suitable candidates for it? To be suitable they would need to make most of their payments by online banking, as cheques and cash cannot be auto analysed. Accepting cash is OK provided it is banked intact on a regular basis.

5. Have you any other comments?

See Making tax digital for links to HMRC’s proposals issued on 14 December 2015. We are interested to hear your views on the proposals and timings so please add a comment below

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  • The prospect of quarterly accounting is horrendous and surely almost impossible for small businesses if the sort of information is that which we use for annual accounts. Companies with properly staffed accounting departments used to management accounting procedures may well be able to cope, but small sole traders trying to keep basic records up to date are a different matter. Will small shopkeepers have to do quarterly stock-takes? How do we deal with prepayments and accruals? Or are we just talking cash accounting? Most small clients have difficulty providing information once a year. The thought of chasing all small business clients and getting accounts prepared and out to clients and back and into HMRC will make huge demands on practitioners and at costs which small clients will not be able to afford. Being semi-retired, I have very few business clients now but chasing property owning clients four times a year will not be welcomed  by them or me! Will all  businesses be required to have tax year accounting dates. What about clients with long established businesses and 30th April accounting dates. It seems totally unrealistic to think that accurate tax liabilities can be arrived at on a quarterly basis.
    Some of the publicity is saying that the quarterly reporting is to be introduced from April 2016. I trust that that is not the case, surely it cannot be dealt with without a lot more preparation time. As regards computer based records updated by clients, many of them have enough difficulty in assembling even rudimentary manual accounting records and regard computers with suspicion. I cannot see how this is going to work.
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