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

[Spent2much]

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

Also being self employed has added stress , there isn't the security of knowing each month a certain set wage is going to be in your bank account , there is no holiday pay so when you take a holiday you close up shop and go or you pay someone to do it for you.

We used pay someone when we took two weeks off but every time it made a loss or broke even simply because they didn't put an effort into it , so last year we just closed the business and went on holiday , that way hubby was relaxed knowing it was closed and we were not having to pay someone for just opening it , we had a better time and it was the best thing we have ever done , we're doing it this year again when we go to Rhodes for a week , holidays are to relax not to sit worrying how a business is going .

Plus there are lots of other things to consider when self employed, you keep all the receipts invoices and file all the costs involved , the yearly tax returns are a pain in the backside for my hubby sometimes he sits there for hours sorting this out , we used to have an accountant but we just can't afford one now .

[SXGuy]

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

Well with the new changes coming between now and 2020, you wont have to worry about a tax return every year, as im afraid HMRC want to do quarterly submissions instead.

Rather than a Self Assessment, it appears what they will want to do, is allow you to either input income and expensives over a certain quarter (like how VAT works now) or further down the line, they are hoping to implement some sort of scan and upload feature, where you littery snap a picuture of the receipt and upload it straight away.

Personally, I see a more logical approach being taken whereby your bank account is linked to your tax account, and as such its automatically calculated. This of course comes with errors such as cash paid jobs, or cash expenditure, which im guessing would require manual intervention.

The idea is to bring everyone in line with making quarterly payments. Someone for example who may pay Corporation Tax as well as VAT, or Tax and NI on PAYE, will be made to pay all tax quarterly, and offset one refund towards a payment for another.

Self Assessment tax, will be changed to paying tax due plus half estimate on account, 4 times in the year instead of twice January and July, January instead will be the deadline for adjustments to be made in order to either reduce liability moving forward, or pay any balance due.

The issue we have with all of the digital movement HMRC are trying to make, is the level of people who are not computer savy. HMRC estimates only around 10% of people still file their tax returns by paper, what they do not comment on, is how much of the 90% that file them online, have accountants who do it for them.

So they are assuming 90% of online filing is done by the individual, it isn't.

While they are trying to simplify the taxation system, I cant help but worry, the un tech savy, will be left with penalties and overpayment of tax base on HMRC estimating it.

It doesn't just stop with the Self Employed though, HMRC are changing the game for many other types of businesses. Ltd Company Directors will no longer see the benefit of taking Dividends over a fixed salary from April 16. Currently the first 32,000 dividends has a 10% tax credit, meaning you pay nothing. From April 16, this is replaced with 5000 tax free, and 7% tax up to 32,000. So People who have been forced to be a LTD company not only pay CT tax on the net profit, but also pay an additional 7% tax on 32000.

[Pixie]

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

Where can I find the petition ?

I think it petition reached over 100,000 because I've just read it was debated in parliament last Monday. Will have to try and find a link to the discussion

Digital tax is also reliant on the people at HMRC pressing the right buttons. They get enough things wrong now so goodness knows what will happen if it's all digital.

[Susie]

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

Away from the filing problems, even if they got access to the bank account and all transactions went through it, yes they could pick up for income and expenditure, but how the hell will they know what items are P&L and what is BS? and will they say that capital allowances are only allowed at the end of the year? its a crazy situation

[SXGuy]

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

Exactly. What if a company earns most it's income in the first quarter? Large tax bill first 3 months then refunds the other 9? Just can't work.

[Never-In-Doubt]

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

This doesn't fall under Common Reporting Standards (CRS) - yea banks etc do but club card / nectar? I'm not convinced myself....

Pointless having DPA if private orgs can just capitulate to pressure from HMRC.

[Never-In-Doubt]

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

I currently have over 12 bank accounts. I don't earn an income. My Mrs pays money into my account each month which pays bills.

Good luck hmrc in tracking my activity. Christ, I struggle myself so feel free to do an investigation - it'd help me out actually

[jadex]

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

Julian, if you subscribe to such a skewed view then what is stopping you to become SE?
C'mon, take a plunge and enjoy your new splendid lifestyle. Seriously, it only takes one phone call to HMRC or click the link to register.
If not, then enjoy your security of getting paid 12 times for 11 months work even if there is no customers / no sales / no ongoing contracts / nothing to do, having 8 paid Bank Holidays, pensions, sickies and being able to get sofa on credit by producing 1-3 recent payslips instead of 3 years audited accounts.

Good Luck, Mate

I am SE and I charge my customers set amount per hour (time spent in car/bus/whatever is on me) - nobody will pay me more for my services as there is a lot of competition. To make more, I can only increase my hours but it is simpler said than done cos you need those customers in the first instance willing to hire you. Really, grass in not such green for SE folks.

[Spent2much]

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

Julian, if you subscribe to such a skewed view then what is stopping you to become SE?
C'mon, take a plunge and enjoy your new splendid lifestyle. Seriously, it only takes one phone call to HMRC or click the link to register.
If not, then enjoy your security of getting paid 12 times for 11 months work even if there is no customers / no sales / no ongoing contracts / nothing to do, having 8 paid Bank Holidays, pensions, sickies and being able to get sofa on credit by producing 1-3 recent payslips instead of 3 years audited accounts.

Good Luck, Mate

I am SE and I charge my customers set amount per hour (time spent in car/bus/whatever is on me) - nobody will pay me more for my services as there is a lot of competition. To make more, I can only increase my hours but it is simpler said than done cos you need those customers in the first instance willing to hire you. Really, grass in not such green for SE folks.

My husband gets people saying to him. You're loaded being self employed , we wish

[alland]

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

I've been SE for best part of 40 yrs. It's given me a lifestyle I could only dream about as a youngster, at other times it put me in absolute despair and massive debt just to keep the business afloat through not one but two recessions in recent years.

Would I change anything ? maybe I would make a few different decisions along the way, but work for anyone else ?....Not a chance in hell, I wouldn't last a day....

[Never-In-Doubt]

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

The laws of economics should prohibit self-employment if the returns are negative, unless the enterprise is not based on monetary income.

Nooo - most of the successful businessmen failed before becoming household names..... Richard Branson, Alan Sugar & Fat Twat in USA all went broke before making their mi££ions.....

See what I did there

[nanna58]

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

My OH was always a SE builders ,yes some good times and when they were good they were good , but the bad times were indescribable .Plus building is a 6 mth job can't lay bricks on the winter, then recessions then no building work.But he wouldn't have worked for an one else.xxxxxx

[Enforcer]

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

January, over £5000 paid out than came in, nearly £13,000 owed to us, waiting for it come in. Yes, overall we manage to make a reasonable living but there have been times when I have had to get paid employment to see us through. Finishing at 5pm, grab something to eat, then doing data input and overnight backup at local factory 6pm till 10pm. Back to own work at 8am. However by working hard, self employment is best. Was once told when I went for a paid job, that because I had worked for myself for so long, I was unemployable! Didn't get the job and yet at that time I was desperate for work. Believe in your vision and have a go, or be a Julian a wage slave. Your choice really.

[Deepie]

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

A few years ago our business came under the scrutiny of the inland revenue with an investigation

Same here the only person to make any money out of mine was my accountant .....

As a long term PAYE sufferer, because self-employment was never an option, it has pained me to have to pay for my tax and NI at source,.

As a long term self employed person (30 years) tax and NI payer ......with having no holidays some years ....working 10 hours a day and 6 sometimes 7 days a week

I've been SE for best part of 40 yrs. It's given me a lifestyle I could only dream about as a youngster, at other times it put me in absolute despair and massive debt just to keep the business afloat through not one but two recessions in recent years.

Would I change anything ? maybe I would make a few different decisions along the way, but work for anyone else ?....Not a chance in hell, I wouldn't last a day....

Would I change anything ??? NOOOOOOO My 30 years of hard work are now paying off .....

January, over £5000 paid out than came in, nearly £13,000 owed to us, waiting for it come in. Yes, overall we manage to make a reasonable living but there have been times when I have had to get paid employment to see us through. Finishing at 5pm, grab something to eat, then doing data input and overnight backup at local factory 6pm till 10pm. Back to own work at 8am. However by working hard, self employment is best. Was once told when I went for a paid job, that because I had worked for myself for so long, I was unemployable! Didn't get the job and yet at that time I was desperate for work. Believe in your vision and have a go, or be a Julian a wage slave. Your choice really.

Hard work is the key .......If you want it you'll go out and get it

[Enforcer]

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

Thankfully I was insured for the VAT inspection we went through last year, still believe that this was because of son's ex. They went through everything and found one small mistake of under £200 when VAT rates changed quarter 06/11. Would have cost vat inspectors more than they recovered, just the time & stress that gets you!