Sunday, 10 April 2011

Time to shrug?

I started a little company way back in January 1996. My wife and I are the sole shareholders and directors. The company was active for the first couple of years during which I was working freelance. It then became more or less dormant for four years when I was working full time elsewhere. Since returning to live in Scotland the company has sprung back to life.

Our company has never needed a bailout. It has never been overdrawn. Its annual return and accounts have always been filed with Companies House well before the deadlines. The P14 and P35 returns have always gone in on time. Those are the ones that cover tax and NI due and paid for the year. Admittedly the first time I did the P14s and P35s online took a wee bit longer than doing them on paper but the Revenue were offering a tax free bonus, so online was a no-brainer.

The corporation tax return is, or rather was, simplicity itself. Perhaps five minutes to fill it in, then photocopy it and take to the post office. Nae problem.

And so we come to this year.

The company's year-end was on Thursday 31st March. On the Saturday morning I reconciled the bank statement, which included the last client cheque for the financial year. That enabled me to work out my gross salary and employer's NI for the month. We've never bothered with dividends, what with all of the IR35 nonsense. I just want a quiet life and if that means paying a wee bit more tax, so be it.

Next, I prepared the profit and loss account and balance sheet for 2010/11. I also filed the P14s and P35 online. So, only five minutes to go for the corporation tax return which incidentally would show a £2 loss and consequently no tax actually due. I don't suppose that ukuncut would understand... One year I made a £2 profit and the Revenue wanted a cheque for 38p. I like to think that they framed a copy of that cheque on the office wall. The cheque did go through the bank. Fair enough, I'd have done the same.

But everything's changed this year. You aren't allowed to file the corporation tax return on paper any more. It must be filed online. But here's the catch: whereas the P14s and P35s are filed directly onto the Revenue's website, the corporation tax return has to be filed using iXBRL format. As you can see from the HMRC link, this requires a bit of thinking. Do I need to buy special software for the former five-minute job? Not necessarily:

HMRC provides a free product, 'Online Tax Return - CT'. This lets you file Company Tax Returns and supplementary pages A, E and J online with Accounts and Computations templates that ensures your return is submitted in the correct manner. HMRC have tested all the features of this service, and will provide support to users through the Online Services Helpdesk. This will be one of the available filing options once you have logged on to our Online Services.
"Tested"? Not quite. Although the Revenue assures me that their software works on an Apple, first one needs to download Adobe Reader. (Apple has its own equivalent). But the current version of the Reader only goes up to OSX 10.6.6 and the latest Apple operating system is 10.6.7. Do I risk a download? By the way, the Revenue's helpdesk was out of order during the busiest week of the tax year! It gets better. Before you download the HMRC software into your Adobe Reader you must first adopt the Revenue's Twelve Step Programme:
Changing settings in Adobe Reader

You’ll be able to enter data into the service but you won’t be able to view, print, add attachments, or submit the return until you have changed settings in your Adobe form. This change will ensure the Company Tax Return and accounts service operates securely.

There are twelve steps you need to take to change the settings in Adobe Reader to make the service secure.

I've used Adobe Reader on other machines before and didn't even know (or need to know) that it had "settings".

So I guess that I've spent around two hours researching the whole damned thing. I may try to use the Adobe Reader on my notebook but the company's accounts are on the Apple. And the accounts have to be filed online along with the tax return.

I used to wonder about those claims that ever increasing red tape was introduced at the request of large established companies so as to do down small potential competitors. To some extent yes, but not always surely. Now I'm not so sure. I see zero evidence that the coalition government likes or understands small business. They probably are trying to kill us off. Time to shrug?

(UPDATE: I spoke about this to a partner in a firm of Chartered Accountants on Monday evening. It's not just me. The whole iXBRL change is chaotic.)

1 comment:

David Farrer said...

Comments made on previous template:

The Revenue are an absolute disgrace. As an accountant working on small businesses I find that a number of my clients are being chased for supposed failure to submit payroll data (P35/P60) data from years ago when in fact they had legitimately filed online nil returns.  
This is basically a near fraudulent scam by HMRC who know that in the area of payroll high fines can be levied (e.g £400 and climbing) for failure to submit data. Many clients struggle with the issus and may pay money just to get HMRC off their backs.  
The Revenue have also got their next "scam" set up. For many years, if you did not submit a personal Tax Return on time but did not owe HMRC money at 31 January any fine would be rescinded. That is changed from year ended 5 April 2011-HMRC will fine you if the return is not sent on time even if you owe no money.  
So the scam will be to send forms to fill to taxpayers who really should not have to fill them in and then fine them for not doing so-up to £10 PER DAY for being more than 3 months late.

2 May 2011, 09:16:56 GMT+01:00
– Like – Reply

Susan Powell
Just be glad, be very glad you are not an accountant full time, Chris has spent weeks and weeks and weeks getting this all sorted out, as he deals mostly with small companies it has been a nightmare to get them all to send in their "numbers".  I think its time we all went to the seaside, at leas the weathers nice.

19 April 2011, 09:15:38 GMT+01:00
– Like – Reply

DF, you deserve the sort of recognition that capitalism draws in many countries. Unfortunately, the Leftist hatred of anything smacking of superiority (from that time - honoured dogmatic Marxist base) requires that private enterprise must fail.  Sadly, there is no remedy for Leftist stupudity.

13 April 2011, 11:16:02 GMT+01:00