2018

Why work with Government and industry competition?

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There’s a certain gravitas when meeting in a Government building. Its redolent of standing in the British Library, not only in surroundings, but the ages of opinion which leaves a contemporary mustiness from decades of discussion. Amidst the grandeur, the invitation and opportunity to meet with Finance Secretary to the Treasury, Mel Stride last week provided key insights and thinking from HMRC.

Along with IRIS, the 20-strong meeting included representatives from HMRC, the CBI, DAG, ICEAW, Sage, Intuit, and Xero. The purpose of the meeting was to identify how HRMC can work to ensure businesses maximise the opportunities as we digitise the economy.

The input from the room was passionate and there’s genuine commitment to Making Tax Digital (MTD). This wasn’t just from a tax perspective but the wider context as to how we make the UK businesses digital. We all agreed there is still much work to do, but digital transformation will provide many opportunities for accountancy practices and advisors.

It might seem both surprising and reassuring the software providers want collaboration to solve the problems on this journey; we all work closely with HMRC but to make the UK truly digital, we must collaborate across the industry. And there is appetite, whether from the tax authority or the FSB – the unswerving mission is to make the UK economy more successful.

Industry collaborations will enable businesses of all sizes to adopt the digital journey, and from my understanding, HMRC, software suppliers and industry bodies need to unify to ensure customers, HMRC’s tax payers and agents are fully informed as we lead up to the April 2019 MTD for VAT legislation. Our partnerships allow us to work more closely with influencers and policy makers to help HMRC provide a service that works as intended, enables productivity, facilitates collaboration and provides insight for businesses to connect and serve an increasingly new generation of customers.

However, this journey won’t be without bumps in the road: I was disappointed with HMRC’s perceived lack of empathy for software providers, there was little understanding as to the level of research and development all providers have committed to over the last 12 months and the significance of our impact.

We are also concerned with the MTD slow down and even now, HMRC won’t commit to further legislation until MTD for VAT is successful, which will be post April 2019. The clarion call was to continue legislation as soon as possible. MTD is the centre piece of the digital economy in our industry and it needs to be at the forefront of HMRC’s agenda.

HMRC must also stand loud and proud. There has been good progress to date, and they must continue to clearly communicate to us, not just to highlight business benefits but share strategic and policy direction, such as publishing roadmaps and communicate tactical issues. Continued transparency across the industry will drive progress and help liberate time, talent and energy of UK businesses, enabling them stay one-step-ahead of their competition.

And progress has started. We’ve seen evidence this week with the first quarterly filing submission in the MTD programme - and by an IRIS accountant, Rowleys Chartered Accountants - which is a great proof point for digital transformation and the MTD programme.

The meeting demonstrated there is light at the end of the tunnel. I’m delighted IRIS has a voice to represent accountants and businesses as well as an opportunity to work with Government and other industry stakeholders.

But we also need your views as we progress.

Whoever your provider is, talk to them. Whether it’s a problem with your digital transformation, a new way of working with customers or an idea you think will help the digital journey become more frictionless – we need your opinion, experiences and ideas.

There’s a way for your voice to be heard at the top of the MTD table. Don’t sit back and wait for this to happen, get in the middle of the debate and make your opinion known.

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 clai

There’s a certain gravitas when meeting in a Government building. Its redolent of standing in the British Library, not only in surroundings, but the ages of opinion which leaves a contemporary mustiness from decades of discussion. Amidst the grandeur, the invitation and opportunity to meet with Finance Secretary to the Treasury, Mel Stride last week provided key insights and thinking from HMRC.

Along with IRIS, the 20-strong meeting included representatives from HMRC, the CBI, DAG, ICEAW, Sage, Intuit, and Xero. The purpose of the meeting was to identify how HRMC can work to ensure businesses maximise the opportunities as we digitise the economy.

The input from the room was passionate and there’s genuine commitment to Making Tax Digital (MTD). This wasn’t just from a tax perspective but the wider context as to how we make the UK businesses digital. We all agreed there is still much work to do, but digital transformation will provide many opportunities for accountancy practices and advisors.

It might seem both surprising and reassuring the software providers want collaboration to solve the problems on this journey; we all work closely with HMRC but to make the UK truly digital, we must collaborate across the industry. And there is appetite, whether from the tax authority or the FSB – the unswerving mission is to make the UK economy more successful.

Industry collaborations will enable businesses of all sizes to adopt the digital journey, and from my understanding, HMRC, software suppliers and industry bodies need to unify to ensure customers, HMRC’s tax payers and agents are fully informed as we lead up to the April 2019 MTD for VAT legislation. Our partnerships allow us to work more closely with influencers and policy makers to help HMRC provide a service that works as intended, enables productivity, facilitates collaboration and provides insight for businesses to connect and serve an increasingly new generation of customers.

However, this journey won’t be without bumps in the road: I was disappointed with HMRC’s perceived lack of empathy for software providers, there was little understanding as to the level of research and development all providers have committed to over the last 12 months and the significance of our impact.

We are also concerned with the MTD slow down and even now, HMRC won’t commit to further legislation until MTD for VAT is successful, which will be post April 2019. The clarion call was to continue legislation as soon as possible. MTD is the centre piece of the digital economy in our industry and it needs to be at the forefront of HMRC’s agenda.

HMRC must also stand loud and proud. There has been good progress to date, and they must continue to clearly communicate to us, not just to highlight business benefits but share strategic and policy direction, such as publishing roadmaps and communicate tactical issues. Continued transparency across the industry will drive progress and help liberate time, talent and energy of UK businesses, enabling them stay one-step-ahead of their competition.

And progress has started. We’ve seen evidence this week with the first quarterly filing submission in the MTD programme - and by an IRIS accountant, Rowleys Chartered Accountants - which is a great proof point for digital transformation and the MTD programme.

The meeting demonstrated there is light at the end of the tunnel. I’m delighted IRIS has a voice to represent accountants and businesses as well as an opportunity to work with Government and other industry stakeholders.

But we also need your views as we progress.

Whoever your provider is, talk to them. Whether it’s a problem with your digital transformation, a new way of working with customers or an idea you think will help the digital journey become more frictionless – we need your opinion, experiences and ideas.

There’s a way for your voice to be heard at the top of the MTD table. Don’t sit back and wait for this to happen, get in the middle of the debate and make your opinion known.

Posted by
Sion Lewis
2 March 2018
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