If you follow the news and our website news/newsletter – you will see an article about the issue of >>quarterly tax returns<<.
The government is floating plans to make most businesses, self-employed people and landlords file tax returns quarterly, this being from 2020. At the moment it is in the ‘will they, won’t they’ stage. As with many government propositions they do not always come to fruition and public pressure can cause a u-turn.
So for us advising you – it is often a case of wait and see. If we got excited over every government proposal we would be even more grey than we currently are.
Saying this it is well to have an eye on the future, so let’s think about this further:
The reason that the government wants these returns could be monetary – their cash flow. But the burden they will be placing on business in the short term could be major.
For the small business – more red tape with a government who professes to make life easier for the small business.
What will quarterly tax returns mean?
If a business is reporting VAT returns quarterly – they should already be staying pretty up to date and so for many businesses it may not be too much more to file tax returns quarterly.
The business will of course need the right software and to increasingly move away from spreadsheets.
There will be an increased move to online accounting software (like Quickbooks) and increasing use and reliance on computers. There will probably be many teething problems implementing this.
The positive point for business is that it keeps well up to date with their tax position – and perhaps the business will pay tax on a quarterly basis thus helping cash flow. For a business to find large tax payments once a year can be problematic.
In practice quarterly returns may be a farce – with many businesses scrabbling to put together a quarterly reflection of business activity which will in reality only make sense once a year.
So in conclusion we still see quarterly tax returns as a ‘will they, won’t they’ scenario – there is plenty of scope for these plans to be scrapped or changed in major ways – which may even preclude the small business from taking part.
But it is worth thinking about these government proposals – they are a little way off (2020) and we foresee that the implementation is likely to be problematic for the government and more importantly for individuals and businesses.
Quay Accounts is well placed to provide advice on any of the above – but in this case we are waiting to see if these plans are made concrete.