Tax changes

[Dman2]

Sorry if i have missed a thread on this already.
Read in Farmers weekly that we are going to have to submit tax returns quarterly ( providing I understood it right)
Now our accountant sorts all that out, we supply our management accounts each year on quickbooks, and he works his magic and submits them.
Are we going to have to pay the accountant to do this 4 times a year?

 

[S J H]

My thinking is that it won't cost a lot more because it will be a smaller job 4 times per year, hopefully the extra accounts cost will be saved if I can plan tax savings better, and it will hopefully stop any tax surprises.

 

[spin cycle]

gonna be a nightmare i suspect......hopefully it'll be simple like a vat return which would good....but knowing the govt and it's IT...thats a vain hope

 

[Matt]

correct me if I'm wrong, but had heard they not even chosen the software for their end yet...

 

[Pennine Ploughing]

correct me if I'm wrong, but had heard they not even chosen the software for their end yet...

they are going to cut costs, and share the RPA software

 

[Steevo]

gonna be a nightmare i suspect......hopefully it'll be simple like a vat return which would good....but knowing the govt and it's IT...thats a vain hope

I'm hoping exactly the same. Fingers crossed the software will be able to do it automatically like the VAT returns without involving the accountant.

 

[Bruce Almighty]

What about closing creditors / debtors ?

What about valuation uneven cash flow etc,

 

[holwellcourtfarm]

Sorry if i have missed a thread on this already.
Read in Farmers weekly that we are going to have to submit tax returns quarterly ( providing I understood it right)
Now our accountant sorts all that out, we supply our management accounts each year on quickbooks, and he works his magic and submits them.
Are we going to have to pay the accountant to do this 4 times a year?

Quite a bit in this thread https://thefarmingforum.co.uk/index.php?threads/making-tax-digital-beta-trial.153372/

 

[spin cycle]

What about closing creditors / debtors ?

What about valuation uneven cash flow etc,

i'm already pondering how to even out income.....but imagine having to list sfp as a creditor with now idea if you're going to be paid in the 3 month period?

 

[Princess Pooper]

i'm already pondering how to even out income.....but imagine having to list sfp as a creditor with now idea if you're going to be paid in the 3 month period?

Debtor, not creditor. Assuming you are not going to pay them.

 

[spin cycle]

Debtor, not creditor. Assuming you are not going to pay them.

oh bollox....and i thought about it.....bodes well for me

 

[Goweresque]

No one is going to have to 'do 4 sets of accounts per year'. You're going to have to send HMRC pretty much the same data you will be collecting for your quarterly VAT return, except you'll have to use professional software (which as mentioned is not yet even on the market) to send the data to HMRC in the correct format. This data will then be used to create a running tax bill that you will be able to see on your online tax account.

However you will still pay tax on account as you do now (31st Jan and July) and what you pay will still be based on your annual tax return which your accountant will still send to HMRC on or before 31st Jan each year, as now. The whole exercise is aimed not at farmers (or other established businesses that don't have regular monthly income and expenditure patterns), but other small businesses and people who have monthly income from multiple sources (buy to lets plus PAYE income for example), and will allow HMRC to keep tabs on them more easily, and also allow them to voluntarily pay tax on a monthly or quarterly basis (which might be helpful for people whose income is more regular throughout the year). Its a response to the increasing amount of 'self employment' which is really just like paid employment, and also the increasing trend for people to have more than just PAYE income. The new system will be largely pointless for farmers as their business model does not run on monthly regular income/expenditure, and their annual accounts will need considerable additional work to take into account capital expenditures, depreciation, work in progress, profit averaging etc, all of which will still require the accountants attention.

Farmers will not be forced to pay tax on their BPS because it falls in Q1 and then claim some sort of rebate because all their expenses are in Qs 2,3,and 4. You will still have an annual accounting period and pay tax exactly as you do now. All that will change is more data going to HMRC earlier than before, which 'may' result in some reduction in accountancy fees, if this data can then be used by them to draw up the accounts quicker. Obviously if you don't do the quarterly HMRC data report yourself and pay the accountant to do it for you, its going to cost you more.

 

[yellow belly]

Company's do not need to do this for a couple more years