Making tax digital - beta trial

Exfarmer

Member
Location
Bury St Edmunds
How are they going to cope with instances such as trading with people who do not bill you?
I am in this situation 2 years running.
I know of a business locally who had not received an invoice from beet haulier for 5-6 years!
 

Robw54

Member
Location
derbyshire
I can't see anything about tax being paid just reporting. They have this on vat returns to a large extent already.

It looks also like landlords from 2018 will be required to do this as well with t/o 10k.

Can only assume they intended to bring the tax payment dates forward at some point :(

Seem to be paying more cost, more tax and more red tape every year at the moment.
 

Robw54

Member
Location
derbyshire
I already do monthly vat returns, using software, so perhaps this will be an easy wave for me to ride shall it come to fruition

And it includes a box for income and expenses, except labour and other costs. Why not just enchance that.

I would have thought it would make tax planning easier than getting a nasty shock 9 months down the line.

Quartly accounting periods however would be a nightmare for those with lumpy income, which is most farmers.
 

Goweresque

Member
Location
North Wilts
Why are they doing this? How does it help them?

I think they are getting worried about the number of 'ordinary' people who are starting to have income from multiple sources and need to be on self-assessment. Historically people were either PAYE or self employed, and few had mixed incomes. Now people are increasingly buying Buy to Let houses and other income generating assets prior to retirement or have significant savings income while still in employment, and thus are falling into the SA system. This is more aimed at those people than true business owners who have always been used to dealing with HMRC. The aim being to get such people a simpler system than SA to calculate their tax bills - hence why the examples they give on the HMRC website are as much about people with mixed income sources than just business income.
 
Location
East Mids
I think they are getting worried about the number of 'ordinary' people who are starting to have income from multiple sources and need to be on self-assessment. Historically people were either PAYE or self employed, and few had mixed incomes. Now people are increasingly buying Buy to Let houses and other income generating assets prior to retirement or have significant savings income while still in employment, and thus are falling into the SA system. This is more aimed at those people than true business owners who have always been used to dealing with HMRC. The aim being to get such people a simpler system than SA to calculate their tax bills - hence why the examples they give on the HMRC website are as much about people with mixed income sources than just business income.
My total income is such that I only pay basic rate tax.
That comes from

PAYE - 3 different jobs (one nearly full time 2 very casual)
Sole trader consultancy
Member of LLP (wind turbine) - so partnership
Savings (not taxable now as less than £1k interest)
Dividends


so a pretty good example!
 

rob1

Member
Location
wiltshire
My total income is such that I only pay basic rate tax.
That comes from

PAYE - 3 different jobs (one nearly full time 2 very casual)
Sole trader consultancy
Member of LLP (wind turbine) - so partnership
Savings (not taxable now as less than £1k interest)
Dividends


so a pretty good example!
when are they thinking about rolling this out, I do my accounts on my own spreadsheet but my old computer is playing up but dont want to spend money on a system if they are going to force us to use commercial software
 

Goweresque

Member
Location
North Wilts
when are they thinking about rolling this out, I do my accounts on my own spreadsheet but my old computer is playing up but dont want to spend money on a system if they are going to force us to use commercial software

Allegedly April 2018 it starts, but one has to think that given the Civil Service's record with large IT projects that the start date may get pushed back.
 

Goweresque

Member
Location
North Wilts
yes, but (for example) was that additional £15k spent last month on capital or on profit and loss item? You can't tell from a VAT return. And what about stocks at the end of each reporting period?

I really don't think this is aimed at 'proper' businesses, with accounting systems, capital allowances, stock levels, depreciation etc etc. Its a system that will allow Joe Public who works in an office, but has a buy to let and some savings income, to input his income and expenditure on a quarterly level, from employment and elsewhere and arrive at a tax computation that will be pretty close to what he should be paying. It isn't going to produce a taxable income figure for a business like farming, where as you say there could be an expenditure of £10K that could be a) a new bit of machinery that is not a cost of sales, but still reduces taxable income, b) part of the cost of growing a crop, c) Purchase of new cattle, d) an allowable expense such as machinery repair, or e) a new shed, which has to come out of taxed income. The tax computations the system will produce will be completely wrong for many businesses, particularly farmers. People who are effectively selling their labour only (ie tradesmen) may find it useful, as their taxable income will largely be their income minus a few expenses. Even they will still need to adjust the figures for capital allowances, if buying a new van for example.

The best farmers can hope for from this is that it reduces our accountants bills because we're doing more of their work for them, by putting all the data into an electronic format that will be easier for them to then knock into a taxable income figure rather than sending off a pile of invoices and bank statements.
 
Location
East Mids
I really don't think this is aimed at 'proper' businesses, with accounting systems, capital allowances, stock levels, depreciation etc etc. Its a system that will allow Joe Public who works in an office, but has a buy to let and some savings income, to input his income and expenditure on a quarterly level, from employment and elsewhere and arrive at a tax computation that will be pretty close to what he should be paying. It isn't going to produce a taxable income figure for a business like farming, where as you say there could be an expenditure of £10K that could be a) a new bit of machinery that is not a cost of sales, but still reduces taxable income, b) part of the cost of growing a crop, c) Purchase of new cattle, d) an allowable expense such as machinery repair, or e) a new shed, which has to come out of taxed income. The tax computations the system will produce will be completely wrong for many businesses, particularly farmers. People who are effectively selling their labour only (ie tradesmen) may find it useful, as their taxable income will largely be their income minus a few expenses. Even they will still need to adjust the figures for capital allowances, if buying a new van for example.

The best farmers can hope for from this is that it reduces our accountants bills because we're doing more of their work for them, by putting all the data into an electronic format that will be easier for them to then knock into a taxable income figure rather than sending off a pile of invoices and bank statements.
It might not be 'aimed at us' but every business with a turnover in excess of £10k will have to do it!!! I agree there will be no accuracy for the figures submitted for tax comp purposes which is why I wanted to take part in the trial to let them see how inaccurate it is for some business sectors.
 

Robw54

Member
Location
derbyshire
It might not be 'aimed at us' but every business with a turnover in excess of £10k will have to do it!!! I agree there will be no accuracy for the figures submitted for tax comp purposes which is why I wanted to take part in the trial to let them see how inaccurate it is for some business sectors.

I can see us paying quarterly on BTL then having to claim back if a loss/adjustment over the yt if expenses hit one quarter. Going to be cash flow implications here.
 

Nearly

Member
Location
North of York
Spring born store calf sales - October / November income
Arable crop sales - November / December income
SFP payment - December 1st hopefully

Fooking great tax bill for quarter ending December / Jan or Feb.
Overdraft required to see me through to next October, while the Govt give my money to other buggers.

That's my little business fooked and paying any profit to the bank to borrow money to replace what the govt has forcibly borrowed from me.

I might as well rent the lot out until I'm old enough to retire / cash to lot in and draw the rent on a monthly basis.

twits!
 

holwellcourtfarm

Member
Livestock Farmer
Spring born store calf sales - October / November income
Arable crop sales - November / December income
SFP payment - December 1st hopefully

Fooking great tax bill for quarter ending December / Jan or Feb.
Overdraft required to see me through to next October, while the Govt give my money to other buggers.

That's my little business fooked and paying any profit to the bank to borrow money to replace what the govt has forcibly borrowed from me.

I might as well rent the lot out until I'm old enough to retire / cash to lot in and draw the rent on a monthly basis.

twits!
It'll end up with folk having to restructure their business to move income into a different quarter to maintain cashflow just because of HMRC :banghead::mad:
 

DrDunc

Member
Livestock Farmer
Location
Dunsyre
It'll end up with folk having to restructure their business to move income into a different quarter to maintain cashflow just because of HMRC :banghead::mad:
All that's required is to forward credit a creditors invoice against profit to smooth out the tax payments.

It's what the big companies already do, often to boost profits for a stock price fiddle.
 

SFI - What % were you taking out of production?

  • 0 %

    Votes: 79 42.9%
  • Up to 25%

    Votes: 63 34.2%
  • 25-50%

    Votes: 30 16.3%
  • 50-75%

    Votes: 3 1.6%
  • 75-100%

    Votes: 3 1.6%
  • 100% I’ve had enough of farming!

    Votes: 6 3.3%

Red Tractor drops launch of green farming scheme amid anger from farmers

  • 1,287
  • 1
As reported in Independent


quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

read the TFF thread here: https://thefarmingforum.co.uk/index.php?threads/gfc-was-to-go-ahead-now-not-going-ahead.405234/
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