HMRC adds to self-assessment software supplier list
Welcome to this week's final Daily Insight. Back in March HMRC produced a short list of making tax digital software suppliers. It contained two names, IRIS and Rhino. It added Absolute and Forbes a couple of months later.
This particular list appeared on the gov.uk website under the headings: "Software for sending Income Tax updates ... Find out which software packages support the making tax digital pilot if you're an agent, or are self-employed." The HMRC says it will be adding suppliers to the list soon.
Another part of the website
Now there's another list of software suppliers on another part of the website that appears under the heading: "Self Assessment commercial software suppliers."
It says to accountants: "You or your clients can use software to send Income Tax updates as part of HMRC’s Making Tax Digital pilot." Then it tells you: "The commercial software suppliers can submit one or more elements of the tax return and supplementary pages to HMRC.
"In each case, HMRC will accept valid tax returns, supplementary pages and attachments for the products listed.
Loss, damage, cost or expense
"HMRC cannot recommend or endorse any one product or service over another and will not be responsible for any loss, damage, cost or expense in connection with using this software."
The list of suppliers is a help insofar as it gives you a name of supplier and product and a link to the company website. It also details whether the software is for individuals or agents, or both, and what amendments and schedules it supports.
There are 32 suppliers on it ... some you'll heard of and some not. Here is the list below and here's a link to the HMRC's site, with more details.....
- 123 e-Filing Limited
- 3CPE Limited (Taxforward)
- ABC Self Assessment Ltd
- Ablegatio (Ftax)
- Absolute Topup
- ACCTAX (Online) Ltd
- Acorah Software Products Ltd (TaxCalc)
- Aegia Cloud Systems Ltd (Gbooks)
- Ajaccts Software
- Andica Limited
- Basetax Ltd
- BTCSoftware Limited
- CalCal Ltd
- Capium Ltd
- CCH Software, a Wolters Kluwer Business
- CTT Services Ltd
- DC Software
- Forbes
- FreeAgent Central Ltd
- GoSimpleTax
- IRIS Software Ltd
- Isokon Limited
- Keytime Objective Ltd
- Nomisma Solution Ltd
- PTP Software Ltd
- rfa Ltd
- Quality Management Software Ltd
- Sage (UK) Ltd
- Tax Systems
- Taxshield
- Taxfiler Ltd
- Thomson Reuters
See you next week!
GDPR guide for accountants in practice
A "pragmatic" look at GDPR focuses on the new data law in the context of accountancy practices and looks at how the regulation will impact.
MyFirmsApp, providers of a custom app platform for accountants in practice, has published the handy summary .
The 19-page guide examines key questions such as what personal data a practice typically holds - with helpful advice on the rules for holding children’s personal data.
What is a data breach?
It covers what the law now requires for data retention and addresses questions such as "what is a data controller?", "what is a data processor?" and "what is a data breach?"
Any breach caused by human error or lax security measures threatens the accountant-client relationship. Practices need to ensure they have the processes and technologies in place that will enable them to detect and respond to breaches.
The guide includes a checklist of actions so that practices can implement the necessary systems and processes to meet GDPR requirements. The ‘Preparing Your Practice for GDPR’ guide can be downloaded HERE.
GDPR challenges
“Over the last year, we been working closely with selected global law firms and advisers to find solutions to the GDPR challenges faced by our customers,” says Joel Oliver, CEO, MyFirmsApp.”
“We are confident that having the right practice App will help in the collection and verification of data, in gaining the necessary opt in permissions, in the sharing of privacy policies and also in the storage and management of data. GDPR presents an opportunity to revise existing privacy policies and achieve better organisation, improve data management and strengthen defences against data breaches and cyber risks.”
10 top best practice insights for accountants
Welcome to the first regular article from accountancy speaker and author Martin Bissett. Martin will be focusing on practice insights and giving invaluable advice on how accountants can improve their businesses.
My favourite 10 practice insights...
- To your potential client, it doesn't matter if your marketing is different, it matters that you’re "superior" to the alternative options open to them.
- An advisory firm without the compliance element, is far more marketable than a compliance firm without the advisory element.
- Never mind what your marketing claims, how long does it take you to demonstrate to a buyer how you can improve their business?
- If a prospect is asking for a dramatic climb down in price, either you've not communicated the value sufficiently or they're too stupid to understand it.
- The golden rule of winning new clients in the accounting profession - ALWAYS give the prospect something to look forward to at each stage.
- You've won a new client - congratulations! Now, let's find out WHY they chose you and not any other firm as we can market that feedback in order to win more.
- I know you'd love to remove all human interaction from compliance work but no, you're not an IT firm, you're an advisory firm.
- If we base our marketing on the stories of the improvement we've made to clients lives, attraction increases and fee sensitivity decreases.
- Teach your clients correct business practices then let them govern themselves.
- Not all feedback is of equal value, some people are informed, some are inconsiderate and some are idiots. Know the difference.
See you next time, Martin.
Join Martin's global community of accountants at www.addviserplus.com
HMRC steps into privacy problems with voice ID scheme
HMRC's voice recognition password technology has proved popular - with 5.1 million taxpayers joining up to access their details on the phone. The only problem is that it appears HMRC did not ask for explicit consent to set up the biometric IDs.
Looking at the issue of HMRC voice ID
The Information Commissioner’s Office has confirmed that it has received a complaint from Big Brother Watch and that it is looking at the issue.
The following questions may need addressing (for starters):
- Have the IDs been shared with other government departments.... or will/can they?
- How are the IDs are stored and used?
- Are they adequately protected?
- What are the implications cyber-security wise?
- Is it possible to delete a voice ID?
- Which legal territory is the data is kept in?
- How much has the scheme cost?
- Is the scheme privacy compliant?
I recently set up my own voice recognition password with HMRC. I was getting particularly frustrated at the amount of time it was taking to access my information. To be honest, I didn't give it a second thought when the automated line said: “I’ll need you to say exactly those words”.
My voice is my password
“It’s important you repeat exactly the same phrase. Please say ‘My voice is my password’.”
The next time you call the helpline, Bob's your uncle. The voice ID technology recognises the sound and rhythm of your voice and takes you through to the next stage of the inquiry process. Clever, but there are concerns.
Big Brother Watch's website says: "The security of voice ID has been disputed. The technology came under fire in 2017 when a BBC reporter tricked HSBC’s voice ID system into allowing access to a bank account."
Silkie Carlo, director of Big Brother Watch, adds: “Taxpayers are being railroaded into a mass ID scheme that is incredibly disturbing."
Data protection principles
"These voice IDs could allow ordinary citizens to be identified by government agencies across other areas of their private lives.”
Pat Walshe, director of Privacy Matters, says:“HMRC’s voiceprint scheme appears to be almost surreptitious, failing to meet basic data protection principles."
A spokesperson for HMRC says: “Our Voice ID system is very popular with customers as it gives a quick and secure route into our systems. The Voice ID data storage meets the highest government and industry standards for security.”
GDPR and the right of access to data
GDPR says it is an individual's right to obtain confirmation about whether data belonging to them is being processed and, if so, where it is being held.
It is also their right to have a copy of that data and other "supplementary information" including: the purpose their data was being stored for; the recipients that their data has been/ will be shared with; information on the source of their personal data; and the period their data is likely to be stored for.
This is the right of access or "subject access". It is important to recognise and become familiar with what falls within the realm of "personal data" as an individual that uses their right of access and makes a request, is permitted to information relating only to them and no other person.
Recognising and dealing with a request can be tricky: a request can be made by an individual in person or in writing, to any part of an organisation (including via social media) and does not have to be concerning a specific member of staff. This means that an individual can make a valid request to any employee (by email or phone) and it is required by law that the request is managed accordingly.
Some organisations have trained staff who are likely to be dealing with individuals on identifying requests. Others use a standard form with information fields for an individual to fill out, making it easier to identify a "subject access request" and to find the individual’s data.
BrightPay will continue to hold free online webinars specifically designed to help you on your GDPR journey.
Upcoming Webinar: Payroll Data & GDPR - What you need to know
Agenda:
What does GDPR mean for your payroll processing?
- Understanding GDPR
- The contract between accountants & clients
- Template Data Processor Agreement
- Proof of compliance
- Securely storing employee data
Payslips & GDPR Compliance
- Employee consent
- Emailing payslips
- Recommended self-service access
Breaching GDPR
- Data breach plan of action
- Non-compliance and penalties
BrightPay & GDPR
- BrightPay Connect - online self-service portal
- Enhanced security measures
BrightPay offers payroll access app
In today’s fast paced environment employees want their payslips at their fingertips. BrightPay’s cloud add-on BrightPay Connect now offers an employee smartphone and tablet app for employees to access their payroll information on the go. The BrightPay Connect app integrates with the BrightPay payroll software application bringing a new level of efficiency and productivity to managers who manage the payroll, leave requests and HR activities. The employee app is available to download for free on any Android or iOS device.
More uncomfortable audit truths for the Big Four
PwC chairman Kevin Ellis's "uncomfortable" email lambasting senior auditor Steve Denison over his "inadequate" work on failed UK store BHS was leaked to the media last week. And, quite rightly, it is causing a stir.
The FRC had at this stage already imposed a £350k fine and 15-year professional ban on Denison.
The note to 1,000-odd PwC partners focused on Denison's shortcomings in overseeing the 2014 audit that was approved only days before Philip Green sold the department chain for £1.
Numerous failings
The chairman outlined Denison’s numerous failings in overseeing the audit. For instance, “delegating too much work to a junior team member and only recording two hours of work during the completion stage.”
Denison then backdated his opinion, assessing BHS as a going concern, and “made a false statement on the audit file relating to the circumstances of the backdating”.
Ellis's missive added: “This situation should not have happened and we need to face up to the failings and learn the lessons.”
Pretty unsavoury stuff
It's all pretty unsavoury stuff. So, I was interested to read an opinion piece in the FT by EY's former head of global assurance, Christian Mouillon.
He says: "It is time to rethink what auditors do. We should stop expecting the Big Four firms and their smaller competitors to offer complete assurance that a company’s accounts are accurate.
"Instead they should provide insurance to pay out when a client company restates its results and clearly inform the market when parts of the results cannot be insured.
Finesse the facts around standards
"But the current assurance system encourages them to use their insights to finesse the facts around standards. Rather than provide meaningful information to stakeholders, they opt not to vex the companies that pay them and expect a passing grade.
"Some have suggested that splitting up the Big Four would help solve this problem. Let’s change the rules of the game instead. Auditors should stop putting out assurance reports.
"Rather, they should offer an insurance contract against the misstatement risk. This contract would be published in the annual report along with covenants that limit the auditors’ liability for the items they cannot fully insure."
Closing the tax gap.... could it be good for your health?
The latest tax gap stats have been released by HMRC. The difference between what was collected and what should have been paid is £33 billion or 5.7 per cent.
According to the government, if the gap had stayed at 2006 levels, "the UK would have lost £71 billion in revenue destined for public services".
"Keeping the tax gap consistently low is a result of HMRC’s work to help customers get things right from the start, and the department’s sustained efforts to tackle evasion and avoidance."
All the info is online in Measuring Tax Gaps but findings include:
- Small businesses made up the largest proportion of unpaid tax by customer group at £13.7 billion;
- Taxpayer errors made up £9.2 billion of unpaid taxes by behaviour;
- Criminal attacks accounted for £5.4 billion;
- Income tax, national insurance contributions, and capital gains tax made up the largest proportion of the tax gap by tax type at £7.9 billion for 2016-17, equivalent to 16.4% of self assessment liabilities;
- The VAT gap showed fell from 12.5 per cent in 2005 to 2006 to 8.9 per cent in 2016-17.
Lowest for five years
Jon Thompson, HMRC’s chief, says: "The UK is the only country in the world to regularly publish their tax gap in detail and at 5.7 per cent, it remains at its lowest for five years. I am pleased that the downward trend shows HMRC and HM Treasury’s continued hard work to tackle evasion and avoidance is working.
"HMRC is also working hard to help taxpayers get their tax right by offering support and investing in digital services to improve businesses’ record keeping and reduce errors."
Making Tax Digital for businesses is there to reduce the tax gap by helping to prevent error and failure to take reasonable care. Digital record keeping combined with a modern, more automated tax system will help businesses get their affairs right the first time. That's all according to HMRC.
Positive figures .... right tax at the right time
Mel Stride, Treasury financial secretary, says: "These really positive figures show that the tax gap is the lowest in the last five years, which reflects the hard work that HMRC and I have been doing to ensure we support businesses to pay the right tax at the right time and clamp down on tax evasion and avoidance.
"Collecting taxes is essential for funding our vital public services such as the NHS. Indeed, had the tax gap remained at its 2005-06 level the UK would have lost £71 billion in revenue destined for public services. Enough to build 200 hospitals."
And on the NHS, Theresa May, prime minister, has announced a £20 billion funding boost for the health service. Apparently, the "Brexit dividend" will help towards the investment. The rest will be borne by the taxpayer. Taxes will rise "a bit" but in a "fair and balanced" way.
Where's that tax gap cash when you need it?
Accountex 2018 in numbers
Today's Daily Insight is a quick look back at Accountex 2018 now that our resident statisticians have been able to analyse all the data from the show and come up with some significant numbers.
There's some interesting reading here, particularly the number of buying influencers who attended the show a couple of weeks ago at London's ExCeL.
In a nutshell...
- The leading event for accounting and finance attracted 230 leading industry vendors and exhibitors.
- There more than 250 CPD approved seminar sessions across 20 themed theatres.
Visitor knowledge levels...
It would seem that the barriers to advancing technology are well on the way to being broken down, though about one in 10 visitors who responded to our survey would describe themselves as cautious. There is still plenty of work to be done in the accounting technology/software sector, it would seem.
- Tech savvy – 42 per cent.
- Tech curious – 49 per cent.
- Tech Cautious – 10 per cent.
Visitor summary:
- 7,613 visitors in 2018 – 8.5 per cent increase from the year before.
- Visitor breakdown showed that 64 per cent were from practices.
- 36 per cent were from business and industry.
- 91 per cent of visitors in practice had on average of one to six partners.
- 38 per cent of visitors who were accountants in industry have between one and 10 employees.
- 33 per cent have 11-100 employees.
- 29 per cent have over 100 employees.
- 81 per cent of visitors authorised or influence buying decisions.
- 94 per cent of visitors came to find new products and suppliers.
- 50 per cent of visitors had never attended the show before.
Tomorrow I'm going to share with you some of the Accountex feedback we've had from our new exhibitors.
Clarity Project aims to be more than a token gesture
I was browsing the Bloomberg Tax website and came across an interesting "hush-hush development". Apparently the UK government is exploring the issue of taxation of cryptocurrencies like Bitcoin, Ripple, and Ethereum.
Bloomberg writer Ben Stupples reckons: "Officials have met with tax practitioners to discuss the UK’s treatment of cryptocurrencies."
His source has asked not to be identified as the information is private. But the individual says the government is looking at the taxation of how businesses raise capital.
What's the big secret?
I'm not really sure why there should be a big secret here. But this whole thing about cryptocurrencies and Blockchain technology is fascinating, not least because of its slightly mysterious air.
Cryptocurrencies like Bitcoin have risen in value from about one cent in 2010 to $16,000 per bitcoin last year. It's easy to see why authorities are taking a closer look at the area.
Coincidentally, and relevant because of its "cutting edgeness", entrepreneur/accountants Aynsley Damery and Steve Briginshaw delivered a fascinating session at Accountex 2018 on how blockchain technology is going to affect accountants.
Maximising potential
I was chatting by email to Steve the other day about the Clarity Project, which he and Aynsley have set up to help businesses maximise their potential by utilising data, and to do some good into the bargain.
The project has produced an excellent white paper here. It sets out the mission and explains an ingenious financing push ... a token sale. Steve kindly provided me with a few bullet points that explain what's happening:
- Clarity will be a one-stop shop for small business owners worldwide, giving them complete access to and control over their data.
- It is an all-encompassing platform that not only stores data, providing analytics, benchmarking, file sharing, third party verification and easy access funding but keeps business information such as insurance, finance, human resources and standard operating procedures all in one place using blockchain technology.
- Business owners will use the Clarity software and AI driven dashboards to keep track of their business performance and will have access to early-stage funding or investment that was previously only available to larger businesses.
- Low due diligence fees will appeal to potential institutional investors who have the opportunity to integrate into the platform from the start and see which businesses are performing the best.
- The platform will use Clarity tokens as the basis for its currency and tokens will be used to purchase services.
- The Token Sale starts on 20 July 2018.
Accountants to play MTD teaching role
Today's Daily Insight focuses on some insighful industry Making Tax Digital statistics. MTD is the No.1 problem for VAT-registered small business owners as they undergo technological transition. The education role for accountants is clear.
Research by online accounting software provider Intuit QuickBooks finds that 76 cent say understanding digital is a chief concern, followed by finding the tools to help them comply (70), finding time (66), managing additional work (64) and choosing the right cloud-based software (63).
MTD is part of HMRC’s plans to become a digitally advanced tax administration. The aim is to implement digital record keeping and introduce quarterly updating for all but the smallest businesses.
Digital record of transactions
It encompasses the self-employed and landlords who pay income tax on their profits. VAT-registered groups have to keep a digital record of their VAT transactions and submit their returns using MTD-compliant software.
That 41 per cent of small business owners are still unaware of MTD, and 22 per cent are aware of what it is but plan to file taxes digitally only if they were to incur financial penalties, reinforces the need for learning somewhat.
Accountants say client education is a top concern for them in the lead up to MTD (29 per cent), as well as adapting their own practice to comply with MTD (27 per cent), and training clients on online software (27 per cent).
Prime opportunity for accountants
“Making Tax Digital is a prime opportunity for accountants to harness the power of cloud technology and assume an advisory role with their clients, especially considering three-quarters of small business owners struggle to grasp the legislation and its implications,” said Nick Williams, QB's head of business development, accountants.
“Embracing the forthcoming legislation as an opportunity to educate and empower clients is an excellent way for accountants to reinforce their value. Change is never easy, but the time to initiate these conversations is now.”
Educating clients
Though educating clients on MTD is a priority for accountants, the research reveals that many still need to expand their own knowledge of the new regulation. While nearly half (44 per cent) feel they know a lot or everything about MTD, just under a third (30 per cent) feel they know little or nothing.
It is in accountants’ interest to move their clients to MTD-ready software, with two in three recognising that it will contribute to less stress on year-end tax (64 per cent), provide an opportunity to grow their practice (62 per cent), enable streamlined processes (61 per cent)) and allow for a more consultative approach to servicing clients (59 per cent)).
QuickBooks has successfully submitted MTD for VAT filings to HMRC as part of its beta programme.