Digital tax returns every quarter?

Digital tax returns every quarter?

9:35 AM, 28th February 2017, About 7 years ago 46

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I have spoken to my accountant in relation to Digital Tax Returns and he has advised me that, Landlords will be required to do Digital Tax Returns every quarter. In other words 3 times over the course of 9 months and then final Annual Self Assessment by 31

He has told me that, 3 Digital Tax Returns which will be done over the course of 3 quarters will require the following:

1) All Receipts to back up Expenditure will need to be attached with Tax Return.
2) Every Property Income and Expenditure will “Need To Be Separate”as currently, you lump all properties Income and Expenditure together and put one figure for each Column (Income & Expenditure) This will No longer be the case as in case if you have 20 properties you will need to fill 20 Boxes for each property.
3) So if HMRC decides to look at your accounts which you submit on quarterly basis then they can simply select the properties they wish.
4) All addresses of properties will also be required.

Although above information are already prepared my accountant which we call it Summary Of Accounts however they are not submitted to HMRC unless there is an enquiry however, regardless if there is enquiry or not such information would need to be submitted which is likely to increase accountants fees.

Any idea, if Digital Taxation is definitely coming next year? If so how well prepared you are? My accountant does all my accounting and bookkeeping, but has already indicated that, he will significantly increase his fees.


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Neil Patterson

9:45 AM, 28th February 2017, About 7 years ago

There was a petition "Scrap plans forcing self employed & small business to do 4 tax returns yearly

George Osborne announced in his Autumn statement the plan for self employed and small businesses to have to file four tax returns a year rather than one as currently is done"

It got 114,504 signatures and was debated in Parliaments with the following response from the Treasury:

"Making Tax Digital will not mean ‘four tax returns a year’. Quarterly updates will largely be a matter of checking data generated from record keeping software or apps and clicking ‘send’.

Read the response in full

These reforms will not mean that businesses have to provide the equivalent of four tax returns every year. Updating HMRC through software or apps will deliver a light-touch process, much less burdensome and time-consuming than it is today.

At the March 2015 Budget the government committed to transform the tax system by introducing simple, secure and personalised digital tax accounts, removing the need for annual tax returns.

At the 2015 Spending Review the government announced it would invest £1.3bn in HMRC to make this vision a reality, transforming HMRC into one of the most digitally advanced tax administrations in the world.

One element of this vision will be asking most businesses, self-employed people and landlords to keep track of their tax affairs digitally and update HMRC at least quarterly via their digital tax account.

Many taxpayers have told HMRC that they want more certainty over their tax bill, and don’t want to wait until the end of the year, or even longer, before knowing where they stand with their taxes.

We also estimate that £6.5bn in tax goes unpaid every year because of mistakes made when filling in tax returns. These reforms will make it easier for taxpayers to maintain accurate and up-to-date tax affairs, reducing the scope for error.

With businesses keeping track of their tax affairs digitally, quarterly updates will be fundamentally different from filling out an annual tax return in a number of crucial respects:

• Quarterly updates will not involve all the complexity of a full tax return. The updates will be generated from existing digital business records. In most cases, little or no further entry of information will be needed. It will be much quicker to complete than the current tax return.
• As part of the process the business owner or individual will receive a developing in-year picture of their tax position, helping people have greater certainty about what they owe, allowing them to plan their finances more effectively. This differs from the current system where many taxpayers are caught out by their tax bill when it finally arrives.
• In-year updates will not be subject to the same sanctions for lateness or inaccuracies as apply now to the year-end position. HMRC will consult during 2016 on what sanctions might be appropriate for a more digital tax administration.

The government has already announced that these measures will not apply to individuals in employment or pensioners, unless they have secondary incomes of more than £10,000 per year from self-employment or property.

The reforms will rely on businesses, self-employed people and landlords using software or apps that can connect securely to their digital tax account. The government will ensure that free products are available. The Gov.UK service will signpost taxpayers to the right product, with clear HMRC guidance about how to choose software.

HMRC will ensure support is available for people to get online if they need it. We will also provide alternatives for those who genuinely cannot use digital tools, like telephone filing. This will build on our Needs Extra Support service, which has gone from strength to strength in helping more vulnerable customers.

We’re introducing these reforms gradually. We’ve been in discussion with stakeholders since March 2015 and will be consulting on the details of the proposals throughout 2016.

We will use volunteers to test the new tools and processes and give us feedback. Quarterly updates will be introduced for some from 2018, and will be phased in fully by 2020, giving taxpayers time to adapt.

We want to work with all stakeholders to ensure these changes work for them. For more information about the proposed reforms please search for ‘Making Tax Digital’ on Gov.UK or use the following link:


Steve Wood

10:35 AM, 28th February 2017, About 7 years ago

its 4 returns plus a final one for year end adjustments / corrections. With threat of penalties if late. 30 days to file 1/4ly return. Protest everyone to your MP and the Chancellor. It is not a good move and will cause havoc. It is a disaster in the making

Mike W

10:58 AM, 28th February 2017, About 7 years ago

So each time I go to B&Q to buy a £1.50 bag of screws I will have to apportion it to various properties and then copy the apportioned receipt? Seriously?
Will the hackers of the world save us from these lunatics?
I can do my tax bill quite easily already. I do not need hmrc's help.
Over the last two years I have had to correct 2 HMRC errors.
They made basic mistakes in the paper system when it was first introduced.
I still use paper because I don't trust the web.
Do you trust HMRCs calculations? Do you check them? I do.


11:15 AM, 28th February 2017, About 7 years ago

Never mind George Osborne, George flippin' Orwell more like!
Trouble is we can vote at the next GE with our feet but labour are will be even worse so that doesn't really leave much room for manoeuvre ...UKIP anyone?

Steve Wood

11:32 AM, 28th February 2017, About 7 years ago

UKIP have a massive opportunity

Simon Hall

11:33 AM, 28th February 2017, About 7 years ago

Reply to the comment left by "Mike W" at "28/02/2017 - 10:58":

I asked the similar question from my accountant and the answer is "YES". Although the Revenue seems to claim that, the purpose of being digital is to streamline the current system. The real reason behind introducing the new system is, to spot anomalies in your Tax Return which will assist them to accurately select certain Tax payers for enquiries, who knowingly under declare the Income and Over-State Expenditure.

As I stated above, the HMRC will be asking to declare for each and every property Income and Expenditure separately which will assist them to Cross-Reference information they may already hold, particularly if there is pattern of certain Income and Claim.

If your Income and Expenditure enormously differ from quarter to quarter you might be ideal candidate for an enquiry. However this would not make any difference to me as all my claims are backed up by receipts however, my accountant fees is going up by flipping £900!

Dylan Morris

12:07 PM, 28th February 2017, About 7 years ago

So the lunatics have well and truly taken over the asylum. Here are a few of the issues with this nonsense:

1) I receive an annual tax certificate from my lenders detailing the mortgage interest I have paid over the tax year. I will now have to obtain one every quarter.

2) I am looking to go away on holiday for 3 months tour of Australia and New Zealand. why should I have to complete my quarterly digital return when I am overseas on holiday ?

3) So if landlords have no internet they can phone HMRC. How many more staff will HMRC have to take on to deal with these reoccurring phone calls every 3 months ?

Any potential new landlord will look at all this and say it's not worth it. How will that help the rental market ?

I love the way they try and spin it, saying that the self employed have actually asked for this. Completely bonkers !!

Kathy Evans

12:07 PM, 28th February 2017, About 7 years ago

Yep. Making Tax Diabolical (sorry Digital) mostly untested and just there so they can fine you if you are late. You can do the quarterly figures based on last year and then put them right on the annual return. All pointless to start with as tax is still annual so far. It's worth joining (free) just to read al the rants from accountants about this.

So far there are no free products and developers say they don't have enough information about how it will work to make any - and why should they provide free stuff? HMRC have not even started (AFAIK) on their own and with the changes in Public sector IR35 (S24 for freelancers, in effect) they'll have no developers to write it.

Steve Wood

12:13 PM, 28th February 2017, About 7 years ago

Reply to the comment left by "Dylan Morris" at "28/02/2017 - 12:07":

if the the people uprise this can be stopped. It will do HMRC a favour as the tax system will collapse anyway with this nonsense for no benefit and massive cost. Conservatives will lose 90% of the self-employed and landlord vote following this

Tobias Nightingale

12:42 PM, 28th February 2017, About 7 years ago

Sadly as with almost all bad policies, this has gone under the radar since first announced so will be a shock to most LL and self employed alike.

Given this change I think will require parliamentary approval I would think surely the tory backbenches will not be having it (or surely enough of them as the tory majority is small).

For what its worth. Dominic Raab said it should only kick in at £83k in an article a few weeks back and the head of the treasury select committee stated there is no case for it to be any lower than the vat threshold

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