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Sweeping changes are coming to the way tax is reported and collected. The burden is going to fall most heavily on those least-best equipped to cope with the upheaval. Individuals, sole-traders, and small businesses take note. Bigger enterprises, you’re not getting off the hook either.
If you think that government departments have learned their lessons over computerisation, think again. Just when you thought it couldn’t get any more complicated, the long overdue Making Tax Digital initiative is really about to arrive as a not-very-welcome upgrade.
If you’ve ever fired up your computer, only to find it stuck in the blue screen of upgrade Hell, while the inner workings chunter through goodness knows what, only to leave you half an hour behind schedule with what you wanted to do, and everything that you knew how to do and where to do it, hidden behind a fog of new operating systems - then you’ll already be ready for Making Tax Difficult.
You may be asking what the fuss is all about. Isn’t this just filing online with a few bells and whistles, and, anyway Springfords take care of that for me and my business already? Oh, if only that were the case.
In an effort to make life a faustian nightmare of collation and reporting, Making Tax Diabolical will require you to submit a summary of your affairs four times a year - maybe even more often.
“Ah’” you say. “No problem. I keep my books up to date, and I’ll just enter the figures into the HMRC software programme.” Sadly, that’s not how it’s going to work. This might be an HMRC initiative, but the mandarins at the Revenue have confirmed that they will not be providing any uniform bookkeeping or accounting software. In short, you’ll have to make sure that, first you use a compliant proprietary software package, and that both your end and the HMRC end are in sync with each other. Anyone who has ever reached page twenty of a booking form for anything from theatre tickets to bird food - only to be confronted with a message about the incompatibility of your browser or operating system - will know just how deflating an experience that can be.
Deep into the Winter nights, we’ve given this a lot of thought here at Springfords. We’ve worked hard to come up with a statement that fully summed up the implications for businesses small and large. Our considered opinion is that the outcome will be: “A nightmare.”
Now, the proposed deadline may not be until April 2018, and even that might slip, but the smartest thing to do right now is to get prepared. Muddling Tax Dizzily is going to happen, and that’s the only certainty we can predict with confidence.
The list of ramifications and impositions is as long as your arm. We’ve been sifting through them at Springfords, and, among the most invasive are mandatory accounting adjustments, revaluations of closing stock and a host of other baffling issues that HMRC has not even begun to address. Fortunately for our clients, we have. It may seem that the Revenue wants everyone to be accountants - you don’t have to be - we already are.
Far be it from us to point to the somewhat tarnished record of major digital projects in the public sector, but we’re not betting on version 1.1 of this system going live without a bug or two. All we at Springfords can recommend is letting us help get your tax affairs inline, offline, and ready to go online when the time comes.
The issues with Making Tax Digital truly do go beyond the numbers. The only ray of light is that going beyond the numbers is what Springfords is all about.