Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

[AAD News Feed]

Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

This is a duplicate of the Blog Entry made on: 31st January 2016 08:35

Have you filed your return by today's deadline? Next time the process will be different as HMRC rolls out new, digital services

Accountants, privacy experts, politicians and charities are voicing growing concerns about HMRC’s ambitions to “fully digitise” the tax return system. They claim that vulnerable groups will be penalised for not wanting to use the internet, that the quantity of data sought by HMRC will hugely increase administrative costs, and that the trend to push everything online will result in far more tax investigations without necessarily raising extra revenue.

- Self-assessment January 2016: people filing at the last minute hit by HSBC's online failures

They also predict that – whatever it says to the contrary – HMRC’s ultimate intention is to obtain highly detailed data “equivalent to the individual entries on a bank statement”. This is likely to result in more frequent and earlier demands for payment. There are two prongs to HMRC’s push to “create the most digitally advanced tax system in the world”. One is the introduction of “personal tax accounts” for all individuals, aimed at the majority of people whose tax affairs are relatively simple and who don’t have accountants. Here, individuals’ online tax accounts will be updated automatically by HMRC with information it has obtained from other sources. You would log on, for instance, and see entries relating to your wages or pension, any taxable benefits you receive, such as the state pension, and any interest earned on your savings in bank or building society accounts......Read more here

[SXGuy]

Re: Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

It goes further than this. What hmrc plan to do is basically either destroy or regulate the accountancy industry to the point where it is destroyed. Accountants are leaving the profession on a daily basis now because of what hmrc wish to do. If a tax payer is late paying his tax on a continuous basis his accountant will be given a strike. To many strikes and he will be blacklisted and cut off from access to client data. It appears we are being punished for something we have no control over. Hmrc are reducing their work force all the time whilst trying to find new ways to generate revenue. Which can only mean more inspections. With the fall of accountants tax payers will end up paying more than what is due in the attempt to keep hmrc off their back. It's a very sad day and I'd advise everyone to please sign the petition to stop what they are trying to do as we will all lose in the end

[Never-In-Doubt]

Re: Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

As my Accountant, I'd be devastated if they messed with you SXGuy.

Its pretty crap. But there's always ways around things - before long someone will invent / create a bypassing system of sorts

[SaltnVinegar]

Re: Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

I think its scary big brother stuff, from an organization whose 'advisors' have been tested, and shown to provide, incorrect advice 25% of the time, not to mention the numerous other times they make mistakes and cock things up.

The arrogant attitude that is then displayed because its almost impossible to make them accountable is cause for concern.

This move will just force more people to return to using cash and doing things 'off the books', and is likely to do nothing to improve tax collection, but instead screw down on the 'little people'.

And once HMRC start collecting that data (seriously individual items on your bank statement!), that is just the thin end of the wedge. Who else will then be given that data down the line?

When you put this in the backdrop of 'big data analytics', its scary what our government organizations, and big corporations, are starting to stick their noses into.

[jadex]

Re: Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

The next step will be to link data from your bank to retailers' databases.
For now you can hide you bought fags, whisky and lager from Tesco - you can always say it was milk, butter and jam.
But when your transaction will be linked to receipt number and then everything on that receipt will be open for investigation?
Scary things. But I AM SURE some not-so-clever folks will jump on and say: if you have nothing to hide then you shouldn't worry.... yeah, sure.
At the moment you even do not know who is watching you on CCTV (as some cities cut their expenses and hired "volunteers" - I'd call them stalkers.)

[SXGuy]

Re: Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

Personally I'm worried big time. Not so much for me but for everyone else who's going to be affected. Hmrc can't even give accurate advice based on their own rules. We was told by hmrc once to register a client with hid own login to the gateway and use that because they couldn't or wouldn't fix an issue with agents being able to add clients to our own login. Now they are telling us if they notice a different I.P address using individual client accounts they will ban us using our own. Thanks hmrc. They cant even get paye rti system running properly {3 years on} with their data being 12 weeks behind our submissions yet they want to log every bank transaction? Sod off. My advice, if you haven't already, get a separate bank account and only use it for business use. Let them link to that and tell them to go to hell with the others. I could go on all day about their proposals and how us accountants have argued it won't work. But it's pointless as they will not listen and once again we will be left sorting out their mess.

[Enforcer]

Re: Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

I always draw out cash from the Bank, then pay for everyday stuff in cash, learned this from tribunal investigation when forensic chartered accountant from Ministry of Injustice went through Bank statements. Told them where I had been shopping, filled up with petrol, in fact they knew everything about me. Not any more, draw out and pay in cash.

[SXGuy]

Re: Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

That's good. But people's downfall is using things like club cards and nectar points. They think it's a great concept till people like hmrc tell you how much you spend in sainsburys each week.

[SXGuy]

Re: Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

Don't get me wrong. If you are paid in cash and you spend cash no digital age will ever capture this. But at some point cash will be replaced with credit. So it won't always be the easy way out.

[SXGuy]

Re: Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

I always draw out cash from the Bank, then pay for everyday stuff in cash, learned this from tribunal investigation when forensic chartered accountant from Ministry of Injustice went through Bank statements. Told them where I had been shopping, filled up with petrol, in fact they knew everything about me. Not any more, draw out and pay in cash.

We once had a client investigation where they asked him what he spent his money on. He said oh I love to drink and go on long holidays all the time. Inspector was loving it writing it all down ready to pounce on him. Until our client explained his gf was a flight attendant and got cheap holidays and the drinking was orange juice as he was a fitness fanatic. Lol should have seen the guys face drop. Needless to say case was closed and he walked away with his tail between his legs.

[Spent2much]

Re: Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

we use our personal bank account because of the high charges just for having a business account which does the same thing, although business banking at the TSB never used to be real time banking , you could put a few hundred quid in and it would take three days to clear on the account and that is cash. We closed our account for this reason as we needed to use our debit card at wholesalers but if the cash hadn't cleared we couldn't use it and that's ridiculous .

It's like we're being punished for being self employed .

[SaltnVinegar]

Re: Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

We once had a client investigation where they asked him what he spent his money on. He said oh I love to drink and go on long holidays all the time. Inspector was loving it writing it all down ready to pounce on him. Until our client explained his gf was a flight attendant and got cheap holidays and the drinking was orange juice as he was a fitness fanatic. Lol should have seen the guys face drop. Needless to say case was closed and he walked away with his tail between his legs.

And this is what I get really annoyed about

The cost of micro-examination of finances during these investigations is frequently completely disproportionate to (and in some cases probably exceeds) the sums of money they are investigating.

I bet that Google wasn't subject to the same level of examination when they got away with paying a fraction of the tax that they should have done over the last 10 years.

[Spent2much]

Re: Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

And this is what I get really annoyed about

The cost of micro-examination of finances during these investigations is frequently completely disproportionate to (and in some cases probably exceeds) the sums of money they are investigating.

I bet that Google wasn't subject to the same level of examination when they got away with paying a fraction of the tax that they should have done over the last 10 years.

That's true , but also Star Bucks don't they make a loss or nil profit ?

[SXGuy]

Re: Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

we use our personal bank account because of the high charges just for having a business account which does the same thing, although business banking at the TSB never used to be real time banking , you could put a few hundred quid in and it would take three days to clear on the account and that is cash. We closed our account for this reason as we needed to use our debit card at wholesalers but if the cash hadn't cleared we couldn't use it and that's ridiculous .

It's like we're being punished for being self employed .

It's exactly that I'm afraid. Government doesn't like self employed people. They would prefer we was all under paye as tax is taken on a monthly or quarterly basis. But that will change too as well. Tax on self assessment will eventually be taken every 3 months on account and adjusted at the end of the year. Cash flow problems looming

[SXGuy]

Re: Digital tax: 'HMRC wants a direct link to everyone's bank accounts'

And this is what I get really annoyed about

The cost of micro-examination of finances during these investigations is frequently completely disproportionate to (and in some cases probably exceeds) the sums of money they are investigating.

I bet that Google wasn't subject to the same level of examination when they got away with paying a fraction of the tax that they should have done over the last 10 years.

The issue with Google is a simple one. They did nothing wrong. They used the law to effectively reduce their tax bill. The amount they have agreed to repaid was more of a good will gesture. Hmrc said look please pay something and Google said ok we will pay this. They didn't have to. They didn't evade tax, they avoided it legally. If government dont like it. Change the system. It was more of a pr exercise than anything so based on that no they wouldn't have been treated with the same level of scrutiny as you or i