If you read HMRC's plan to impose the burden of quarterly digital accounting on business with care you rapidly realise it is only going to apply to small businesses. There is no mention of any such obligation being imposed on big businesses, although they are the only ones with the capacity to meet the demands HMRC is creating.
Why is that, I wonder?
Could it be that big business has already got its lobbying in?
Or is it straightforward bias?
It would be great to know.
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I would suggest that the first of those two options is certainly the case, rather than the notion touted on the related thread below (by Niles, I think?) that it is something based on a bureaucratic civil service (ie public, therefore bad) philosophy.
The reason being this is not the only area of Corporate Government policy in which everyone except the large Corporations get piles of poo dropped on them. The Universal Credit was mentioned in one post on the thread below.
Another can be found here:
http://arstechnica.com/tech-policy/2015/12/you-may-soon-need-a-licence-to-take-photos-of-that-classic-designer-chair-you-bought/
Where “Changes to UK copyright law will soon mean that you may need to take out a licence to photograph classic designer objects even if you own them. That’s the result of the Enterprise and Regulatory Reform Act 2013, which extends the copyright of artistic objects like designer chairs from 25 years after they were first marketed to 70 years after the creator’s death. In most cases, that will be well over a hundred years after the object was designed. During that period, taking a photo of the item will often require a licence from the copyright owner regardless of who owns the particular object in question.”
“Photographers, for example, will need to worry about whether any of the objects in a picture they are taking is covered by copyright, in which case it may be necessary to obtain a licence to include them in the photo.”
“Another group likely to be hit by this major copyright extension–publishers of books with pictures of design objects–is also being told to like it or lump it. The Digital Reader spoke with Natalie Kontarsky, associate director for legal and business affairs at the well-known art publisher Thames & Hudson, and she did not mix messages. “The government has actually said ‘you are collateral damage’ in a very sanguine, offhand way. The dark end of the spectrum would be to take books out of circulation and have to pulp. Obviously no one wants to look at that.””
The point being that you can take most any aspect of Government policy and see the same basic line at work.
Pulling out a few points on the specific topic of the HMRC digital tax reporting; it is easy to spot the well known, tried and tested private sector practice of transferring the costs savings being made in the centralisation of HMRC onto the “customer base” in which all the tasks listed in the thread below will incur increased costs for those affected by the changes.
It is also easy to see that, regardless of any “pilots” or “trials”, this is a done deal in terms of eventual implementation. The purpose of a pilot or trial of anything is to check whether the idea will work in the real world. Well, at least that’s the case where any degree of honesty exists. In thirty years of working for a private entity none of us ever saw a pilot that “failed.” Regardless of how stupid and unworkable, once an idea got to the pilot stage it was rolled out regardless on the basis that reality would, should and could be made to bend to breaking point and beyond so as to avoid loss of face.
However, looking at some of the wording and phrasing in order to read between the lines what really needs to be watched here is mission creep. The phrase “at least” quarterly, when read in conjunction with “real time” represents a very real indication of a further incremental step towards real time instantaneous tax reporting.
That may seem a bit far fetched for some. Unfortunately the generic process is already standard practice in other areas and activities. The industry I worked in for many years issued smart phones to field engineers a few years back. They now spend more time inputting what they are doing in real time than they do actually doing the job they are supposed to be doing.
Despite the fact this bias is so blatent that it is beyond any honest doubt there will still be platoons of forelock tugging Uriah Heep’s out there more than willing to defend this against any and all criticism. The rate things are going it cannot be too long before we see the Corporate Parliament overseeing and processing the lives of Corporate Citizens.
Possibly because big incorporated businesses already pay their taxes on a quarterly basis in year, so HMRC have already accelerated the cashflow on all those payments (which I fear is what this is really aimed at). Although it does sound as though this is going to be a more “refined” calculation than the CTSA QIPs estimates – and no indications yet on how precisely the threshold is to be set; if it’s turnover then there are going to be interesting interactions with the PCTCT based QIPs limits.
I’m not convinced HMRC have really thought all of this through yet, and am even more concerned that the proposed timelines (when you compare & contract with eg Universal Credit, CAP Farmers’ payments etc) are realistic – especially given apparent promises to support hardware and software issues for taxpayers, alongside the tax technical aspects of the system.
Agree with al that
Just an attempt to preserve and increase the pace of the concentration of wealth then. The intention is there will only ever be the existing Amazons as their potential competitors are strangled at birth.
“There is no mention of any such obligation being imposed on big businesses, although they are the only ones with the capacity to meet the demands HMRC is creating.
Why is that, I wonder?
Could it be that big business has already got its lobbying in?
Or is it straightforward bias?
It would be great to know.”
I am happy to be able to provide the information you are looking for.
It is not lobbying or bias, it is because those large companies ALREADY in the QIPs regime will not be included in this new regime. Reforms of QIPs are also being planned.
You make it sound like a conspiracy and a mystery but this information is freely and easily available on HMRC’s website for those who wish to become informed before they comment.
Regards
Pardeep.
But the obligations are very different
“But the obligations are very different”
Neither set of obligations has been determined yet!
Obligation:
noun
1.something by which a person is bound or obliged to do certain things, and which arises out of a sense of duty or results from custom, law, etc.
2.something that is done or is to be done for such reasons:
to fulfill one’s obligations.
3.a binding promise, contract, sense of duty, etc.
4.the act of binding or obliging oneself by a promise, contract, etc.
5.Law.
an agreement enforceable by law, originally applied to promises under seal.
a document containing such an agreement.
a bond containing a penalty, with a condition annexed for payment of money, performance of covenants, etc.
6.any bond, note, bill, certificate, or the like, as of a government or a corporation, serving as evidence of indebtedness.
7.an indebtedness or amount of indebtedness.
8.a favor, service, or benefit for which gratitude is due.
9.a debt of gratitude: He felt an obligation to his teacher.
10.the state of being under a debt, as of gratitude, for a favor, service, or benefit.
From page 7 “Making Tax Digital” HMRC:
“By 2020, most businesses, self-employed people and landlords will be required to keep track of their tax affairs digitally and update HMRC at least quarterly via their digital tax account. These changes will be introduced for some businesses from April 2018, and will be phased-in by 2020, giving businesses time to adapt.
These businesses will be required to use digital tools, such as software or apps, to keep records of their income and expenditure.”
That certainly sounds like an obligation from where I’m sitting.
It is an obligation
And a massive imposition
Which ignores that a large number of businesses do not even have an Internet presence
Perhaps the most interesting part of the document is to be found on page 4 where:
“The vision set out here is about much more than simply adding
digital tools to the current system: it is about transforming the UK
tax system into something that feels completely different. HMRC
will collect and process information affecting tax in as close to
real time as possible, stopping tax due or repayments owed from
building up.”
Indicating that quarterly reporting may well be merely a stepping stone, one stage, in the eventual process of real time continuous reporting of any and all transactions “at any time of the day or night, and at any point in the year.”
Having seen many statements like this over the years, along with the resultant responses on the part of those most affected, one is moved to observe good luck with that one. What is likely to happen is that those most impacted will, like all human beings, find the easiest way around the impositions of such delusions. The shadow/black economy will certainly be a growth area as a result – until, of course, the oxygen breathers and their paid politician decide to abolish cash.
I fear tgat this will fuel the shadow economy, considerably
When even Osbourne’s chums at the OBR consider the HMRC digital project as a ‘high risk’ policy, you know that there’s something to worry about – especially at the timescales planned.
http://www.computerweekly.com/news/4500258205/OBR-brands-HMRC-digital-tax-accounts-project-high-risk
The OBR is right