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Making tax digital - beta trial
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<blockquote data-quote="Goweresque" data-source="post: 3502356" data-attributes="member: 818"><p>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.</p><p></p><p>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.</p></blockquote><p></p>
[QUOTE="Goweresque, post: 3502356, member: 818"] 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. [/QUOTE]
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