News and events from TaxCalc
HMRC Making Tax Digital Update
It’s been almost two months since we last posted about HMRC’s Making Tax Digital strategy.
Due to matters such as the local elections and the EU Referendum, not an awful lot has happened since then. However, there have been a few matters of note arising.
HMRC had originally planned to begin public consultation after the Budget earlier this year. Since then, there has been the Panama papers incident, local elections and the EU Referendum. HMRC has gone into something called purdah during the latter two, which means they cease any public communications for fear of biasing election outcomes.
What they have said is that they will commence formal public consultation in July.
You can look out for any announcements as to the nature of the consultation and when they will take place by following this link.
Commencement of Quarterly Updates
At Accountex last May, Oliver Fisher, who is HMRC’s Deputy Director of Making Tax Digital (Business) Strategic Design & Policy, gave a talk on Making Tax Digital and, in particular, Quarterly Updates.
During his talk, Mr Fisher mentioned that a taxpayer's obligation to begin filing Quarterly Updates would commence after their usual year end. For many taxpayers, this will be the start of April 2018 but for others, it will be later in the year. To a small extent, this would be helpful in staggering taxpayers throughout the year although it's likely that most taxpayers will be skewed towards the start of the year.
Personal and Business Tax Accounts
Until a recent meeting, I had been under the impression that HMRC would split the functions of the Personal and Business Tax Accounts such that, essentially, any income or tax matter to do with an individual would be handled by the Personal Tax Account and any tax of a business (PAYE, VAT, Corporation Tax etc.) would be handled through the Business Tax Account.
It now looks as though HMRC expect any trading type income to go through the Business Tax Account. This means that self employed, partnership and land/property incomes will be directed towards the Business Tax Account.
What is not known is how these income streams will find their way into the Personal Tax Account nor where tax adjustments will be made to convert an accounting profit or loss into a taxable one. Will they take place in the Business Tax Account and export a tax adjusted profit or be made in the Personal Tax Account?
As a supplier of tax software, we don’t believe that directing these income streams to the Business Tax Account is necessarily the right approach. Self employment, partnership income and so on are taxed on the individual, so in our opinion, should be collected through the Personal Tax Account.
We’ll be following this up with HMRC through our own channels and through the public consultation when it starts. As mentioned above, please keep an eye out for this and add your voice to the consultation.
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abelljms (3 years ago)
It will be just like the rubbish that assumes payrolls are final when they are run etc.. for RTI lalaland