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

[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.

[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

[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.

[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.

[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'

Julian I see where you are trying to come from however I think you missed a valid and clear point regarding the differences. While it may be true self employed appear to be better off, it's because they set the level of income they wish to receive, they are not bound by a fixed wage. 2ndly you can not bar someone from filing negative accounts. It simple doesn't work that way. Plenty of start up businesses will earn a loss in the first 18 months. They does not mean they will not earn a profit at some point. It just means they have had to spend more than they have received in income simply put. Further to this a business can also be in profit but have a loss which has carried forward to offset the tax due.

While self employment may look rosey to you. Let's not forget we also have to pay double the amount of tax you do. (2 half estimates on account Jan and July.)

[nanna58]

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

Where can I find the petition ?

[julian]

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

Monitoring on OysterCards has led to many rejecting their registration. However, on the plus side, the Big Data does allow some control over terrorism, physical and monetary. With fewer police the use of computers is required to fill the void.

[julian]

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

I can't really see why self-employed think they are persecuted. 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, school extras, transport, entertainment and meals in fact the full cost of living. I have seen my self employed siblings ad friends on great money earners having loads money for no apparent personal effort, but canny accountants. I always wondered how solicitors, doctors, taxi drivers, electricians etc living in large houses and ;driving several large full expensed cars could have children studying on full grants and driving large cars whilst PAYE kids have to take up paid work as the have no grant and starve. Jobs in cafes, boarding houses and small shops paid a pittance and the employers were constantly complaining of costs, whilst off for the winter to sunnier climes. That was close to slavery.

At the bottom of the pile self-employed and PAYE are both unenviable. The laws of economics should prohibit self-employment if the returns are negative, unless the enterprise is not based on monetary income.

[SXGuy]

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

Have you got a link to the petition SXGuy?

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

[jadex]

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

we're heading towards a cashless society , that way we're able to be monitored on everything we buy and by using a debit card they know where we are too . Scary !

also EVERY time you meet police ANPR car, your car's whereabouts are stored in police database without your consent (apparently, police has never ever been granted that power)

[jadex]

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

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

unfortunately, that's the way this country is going for the moment (and has been for some time, IMHO)

[alland]

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.

A few years ago our business came under the scrutiny of the inland revenue with an investigation (malicious tip off by by Sons ex wife). The investigation took almost 2 years, they completely dissected the business accounts going back 5 years, same with personal bank accounts, cost us thousands in additional accountancy fees, they did come up with a ridiculous figure they said we owed in back tax and penalty interest but our accountant rubbished most of the claims and we eventually walked away paying them a quarter of what they originally said we owed. It wasn't a pleasent experience and not one I want to go through again, but just in case we now carry insurance to cover investigation accountancy fees on the off chance our name gets flagged up again in the future.

Talking of the Inland Revenue I'm a whole lot less well off than I was at this time yesterday, I reluctantly pressed the "submit payment" button for my tax bill yesterday afternoon....

[Deepie]

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

As I said before. They already know. Nectar cards give them that info already.

Do what? How, exactly?

Same withTesco club card .....they know what you buy every time you use your club card it records all what's on your recipe .....

I'm lucky having a cash business all my shopping and entertainment is paid with cash .

[Pixie]

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

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

Have you got a link to the petition SXGuy?