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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  • I will be a dissenting (controversial?) voice here.  

    The systems that IT-literate clients use will continue to migrate to the cloud, Xero etc, - that way quarterly reporting will not be an issue - hence Gary Turner disappearing from the Autumn Statement session excitedly - the quarterly reporting from cloud packages will be a convergence of HMRC & client/Practice systems.

    Non-IT-literate clients will have to move to a process where they are hand-held in systems that enable their advisors to collate their data - the IT can be set up and run/supervised by the advisors - Receipt Bank etc is not hard to use - and if the client can only bundle papers into weekly/monthly packets posts - Receipt Bank or the advisors can handle that.  (The hopeless cases will be less likely to lose everything if they know they need to send it off each week rather than wait until the middle of next January).

    As an example, I have this week arranged with a client who wants to keep tabs on her tax bill for her to send us her bank statements each month - we can then use IT (AutoRec and Xero) to generate the figures quarterly.

    The real issues are the period-end adjustments - as Colin described above - stock-taking/ accruing income etc.  Presumably the quarterly reporting would have some form of annual adjustment akin to VAT Annual Accounting?

    I am not down-playing the work involved in developing ways of working that can give quarterly returns but this is the way the world is moving and I think we have to think of ways we can move with the times rather than say "this is the way we have always done it"
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