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

  • Links to documents published by HMRC on the 14 December,
    www.gov.uk/.../making-tax-digital.pdf which contains a more detailed roadmap of the intended implmentation. Consulation to be published in the spring.

    www.gov.uk/.../Making_tax_digital_-_Discussion_paper_on_simpler_payments.pdf Discussion paper on bringing the tax payment dates closer in line with the reporting dates.
    Consultation with stakeholders in January and February. Why is this consultation being held before the consultation on the proposed implementation? You can draw your own conclusions.
  • 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.

  • As a non-resident with UK income (including rental income) I still cannot - the last time I checked - even file online using HMRC software. As a matter of principle I send paper returns since I do not see why I should have to pay a third party to file my personal tax return. It will be interesting to see what happens with the proposed online tax accounts.
  • Hi Rebecca

    What a nonsense. If HMR&C are worried about self employed or partners of businesses not paying their tax because either they have already spent their profits or worse still have made a loss

    merely ask them to pay quarterly instead of half yearly

    Barry Koten
    KOTEN& CO
  • All business owners will need to attend mandatory accounting and book keeping courses, at their own cost of course, to understand how to deal with what is needed and we 'older generation accountants' can go and hang our hats up!

    I have no problem with change but I do have a big problem that Government does not realise that they are asking too much at present of small and micro business leaders who after all are merely trying to earn a living.
    They are also relying on business to deal with this themselves and reduce costs by no longer needing the qualified person - what a farce, how many times do we see HP capital included in motor expenses, personal expenses in overheads - do I need to go on!

    There will be a large number of people who will refuse point blank to operate computerised accounting systems - yes they will use spreadsheets but that is not the same thing.

    We have had NMW, RTI, a move to do away with zero hours contracts, we now have AE and this latest ask is just one step too far. 

    My gardener client won't have a business if zero hours contracts are banned - when it rains/snows he doesn't earn anything and as it is he doesn't make much more than his 'lad'; he doesn't understand RTI, and can't get his head around the AE process so has had to 'buy in expertise'.
    Another client is having to spend a (relative) fortune to set up a scheme for his one employee who will opt out as she is already a pensioner, on a pension that is several times the size of her salary - it's his wife!  (And no they are not a limited company or a partnership so no cop out is available.)

    Until we get older it is difficult to understand why some one of that generation digs their heels in about change or why they lose the ability to deal with things that 20 years earlier they took in their stride.
    However, like a previous post, I have clients who are young (under 35), very IT literate but run a mile from completing anything online for HMRC.  As one of them said to me recently it might not be so bad if the services provided by HMRC used words ordinary human beings understood not just those for IT geeks or qualified accountants and tax consultants.

    I perceive there will have to be a mandatory year end for sole traders and partnerships to enable real time reporting.

    How will the overlap periods be dealt with or will those that have a 30 April year end have a whole year advantage?

    How will business that operate seasonally be able to cope with the additional pressures of real time reporting when they are at their busiest?

    Bank feeds have their uses but where cheques are still used they do not reflect the actual date of payments and where cheques are banked they do not necessarily reflect the correct date of receipt. 
    The bank feeds we have used are useless where invoices are not paid in full by either the customer or the client.

    Natwest only allows one payment reference per payee unless you take another 5 minutes to change the reference for each payment so that makes allocating payments difficult if relying on the bank feed, at least the other banks allow multiple references for the same payee.

    Government requires its tax earlier to fund a leaking ship so why not make it simpler and have 10 payments in a year, based on the previous year and one balancing payment - a bit like annual VAT accounting, then at least we would be back to annual accounts.