x
By using this website, you agree to our use of cookies to enhance your experience.
icon
John Jones
2189  Profile Views

About Me

my expertise in the industry

John's Recent Activity

John Jones
Remember that this is the government that helped corporate interests in the residential lettings sector by stopping ordinary folks running a small rentals business from setting their finance costs against tax. So it's reasonable to ask who's really benefitting from forcing small-scale landlords to report to HMRC five times a year rather than the current once? I think there are two obvious beneficiaries. One is the providers of accounting software who are going to make a lot of money out of small landlords being obliged by law to use third-party products to deal with HMRC. Let's just say it would be interesting to know about the personal and financial ties between Tory MPs and companies like SAGE who will be profiting mightily from this legal requirement for millions of taxpayers to purchase a commercial product. The other likely beneficiary is the government itself. After all, if you believe the requirement to submit four quarterly reports plus a final statement each year won't also quickly lead on to a requirement to pay advance tax on account to HMRC every three months then I have a bridge I want to sell you. For small landlords this is going to be very tough because big-ticket expenditures in particular (eg. new boiler, repairs to roof) are "lumpy" and having had to hand over accumulated profits several times in-year could easily leave insufficient cash in the bank to fund them. So I predict growing business problems for small operators while the state sits on their money which it has forced them to hand over as a downpayment on the eventual tax liability. Incidentally I also foresee imposing much more frequent digital reporting on millions of sole traders and small landlords leading to administrative chaos. If you seriously believe HMRC, which cannot cope adequately with the inquiries and glitches generated by a single reporting and payment point each year, is going to be able to handle the massive increase in interactions with taxpayers who are suddenly forced to deal with the tax authorities five times a year, then I have a splendid second bridge available too.

From: John Jones 11 January 2022 12:12 PM

John Jones
Oh come on. This is poor journalism and inaccurate to boot. First, HMRC, whose discussion documents I have actually read, are proposing to apply this onerous quarterly digital reporting burden to anyone with a GROSS INCOME or TURNOVER of £10,000 a year, not just to the "business income" of £10,000 stated here. The actual financial threshold is therefore much lower than this article says, and will ensnare far more people, because it takes revenue, or in the case of landlords total rentals, rather than actual profit or net income after all costs and deductions have been included. Put that way the scope of this dragnet becomes clear. It is designed to capture almost all self-employed workers (how many plumbers or gardeners will have turnovers of less than £10,000 a year, implying perhaps only £5,000-7,000 net income from their work after costs?). It will also capture even the landlord who has moved away with work and receives gross rent of £850 per month on his house. In other words, these proposals are very far from being a boon to the little guy but are a direct assult on him (the concession on cash-basis accounting is trivial and just a crude attempt to sweeten a very bitter pill). Second, maintaining digital accounts will become a legal obligation for all these people, as will checking them in with HMRC every 12 weeks. This is therefore going to place a huge new burden on your average local tradesman or small-time accidental landlord who in many cases won't hitherto have ever used accounting software. Gone will be the days when a simple spreadsheet or notebook was sufficient: HMRC are going to impose a requirement to buy and use sophisticated accounting software on large numbers of people who don't own companies, have no accounting or book-keeping expertise and who have never before needed to worry about such things because their operations are at such a low level. This is actually an attempt to use IT and the law in combination to force lots of the "little people" to maintain a much closer and tighter relationship with HMRC and so shake down even more tax out of them, all of this, of course, while governments continue to allow major multi-national corporates who game the tax system to get away with it.

From: John Jones 18 August 2016 17:57 PM

MovePal MovePal MovePal