Blog Article

Surviving the retail apocalypse

By Alan Gregory

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By Alan Gregory

Author

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Updated 24th March 2023 | 5 min read Published 14th March 2018

HMRC have released a new version of their Self-Assessment Exclusions for individuals. These are a list of scenarios that the HMRC system cannot cope with or will not calculate the correct tax liability for and therefore there is an exclusion in place to allow for these returns to be submitted by post instead of online.

HMRC have advised us that all Self-Assessment taxpayers need to file their 2016/17 Tax Return, pay their balance and make their first payment on account for 2017/18 by 31 January 2018.

They have confirmed that a “small number” of taxpayers are affected by the exclusions and therefore unable to file online or get an accurate income tax liability calculation for 2016/17. Their forecasts suggest that the exclusions for 2016/17 will only impact “a very small proportion of SA customers (a fraction of 1%)”.

In these instances taxpayers (or their agents) should:

• File a paper return, along with a completed reasonable excuse claim

• Make a reasonable effort to estimate the income tax liability based on the information they have

• Pay the estimated balance for 2016/17 and make their first payment on account of 2017/18 by 31 January 2018

Should the tax liability calculation for 2016/17 be too low or the deadline of 31 January 2018 be missed because of an exclusion, HMRC will not apply late filing, late payment penalties and/or interest. Automatic issue of these can be cancelled by a reasonable excuse claim.

From February 2018 HMRC will contact “customers” and their agents where they feel that the tax calculation needs to be corrected to confirm their actual income tax liability.

If you are uncertain as to whether or not your client’s circumstances match an HMRC exclusion and IRIS allows you to submit your client’s tax return online you should still file the return online, and pay the tax liability due.

HMRC have stated that they will:

• Identify any cases filed online where the calculation is incorrect

• Make any required correction to the income tax liability

• Inform the customer of the correct liability

• Advise when the revised amounts need to be paid

• Inform the customer that they will not have to pay late payment penalties and/or interest attributable to any additional amount arising from the correction if it is paid before the revised due date

In most cases, if your client’s circumstances fall into one of the HMRC Exclusions the IRIS software will warn you and advise that the Return be sent by post. There are some scenarios, only recently highlighted by HMRC that the software will not warn you about, but the Return will be rejected online with a 6492 error. In these circumstances the return should be sent by post accompanied by a reasonable excuse claim..

Over the last few weeks we have seen many stories of the turbulence retail market. Many high street favourites have fallen on tough times and are making drastic changes. We have already lost Woolworths, BHS and Store Twenty One. Since Christmas both Maplin and Toys R Us have gone into administration leaving thousands of jobs at risk. Last week New Look announced its plans to close 60 stores as part of a rescue deal to help it avoid going into administration, shedding 1,000 jobs in the process. Reports suggest that House of Fraser had turned to its landlords asking for rent reductions.

Foot Locker, the US sports store, recently announced plans to close approximately 110 stores globally this year. This follows the closure of 147 stores in 2017.

"The disruption that has characterized the retail industry recently is not going away," Foot Locker's CEO Richard Johnson said recently. "Consumers want experiences, they want cool products, and they want it all — fast."

While the high street may be suffering, online sales have shown steady growth over the last few years with forecasts suggesting 2018 could be a bumper year.

Tastes may change but what’s clear is the appetite for online transactions. More and more consumers are adopting an ‘online first’ mentality, and businesses need to change accordingly.

This is very much the case for accountants. Being online is not enough. Your website needs to be easily found by potential clients on a range of devices including PCs, laptops and smartphones. Recent changes by Google to their search function means websites that are not optimised for mobiles will automatically drop down the search listings and end up further down the page.

The IRIS WebPortal

IRIS WebPortal customers receive a complete website package, incorporating the practice branding and corporate colours. The service includes hosting, ongoing support and on-page search engine optimisation (SEO).

A wide range of features

Maintaining a good SEO ranking is important in ensuring your website generates traffic from regular visitors. Your IRIS website achieves this by including a range of calculators, calendars and tools for your existing clients providing insight to help run their business more efficiently and collaborate with you online.

A key element of your website is the client portal which integrates your existing KashFlow and IRIS OpenSpace portals. This client portal becomes the main entry point for your clients to access their online bookkeeping app and upload, store and approve documents.

Change is coming

With the retail sector many business have embraced the online opportunities and although store closures are to be regretted the overall business is strong. However those businesses that have failed to build an effective online presence find themselves in a more challenging position.

Change is inevitable and business leaders need to address this important issue. They can embrace the change and seize the opportunity. Alternatively they can resist for as long as possible and eventually succumb to the inevitable.