HMRC’s “FETCH”

Fetch - HMRC error

Fetch – HMRC error

 

For the last few weeks we have been using HMRC’s “Fetch” system.  This operates through the commercial tax software we use, and obtains salary and tax details which is already held by HMRC.  The tax software contacts HMRC via an authorisation process, and gets the figures which we would previously have obtained from our client’s P60 certificate.

 

 

It’s a mixed bag so far:

  • Sometimes the system fails completely (prompting this blog);
  • Sometimes it obtains nothing – but we’re holding the client’s P60 so we know it should have found something;
  • Sometimes it works perfectly.

Well, we can’t rely on it yet, but it points the way that HMRC is going.

At some time in the future HMRC will pre-populate a taxpayer’s (sorry -”customer’s“) tax record with the data obtained from other sources – savings interest, salary, pension – but some data is more complex like business profits, needing a different process.

It’s all part of the plan…

This process is “Making Tax Digital”.  HMRC has lowered its initial aspirations, so instead of applying to businesses with a gross income over £10,000 and taking effect from April 2018, Making Tax Digital is now due to start in April 2019 and (broadly) is for businesses with a turnover exceeding the VAT threshold, currently £85,000, who will be compelled to file quarterly returns direct from accounting software.

So if you were in the Treasury, you too would see this as a good business move – get taxpayers (sorry, customers) to file quarterly returns under Making Tax Digital, then when that’s been working for some years, get taxpayers to pay their tax quarterly too.  After a few years more, since customers are now filing quarterly returns all done by software, why not get these taxpayers to file monthly returns.  Give that a few years to bed in, then we’ll ask customers for monthly tax payments. Cashflow sorted!

This is not a bad thing – many taxpayers find it hard to put funds aside for their future tax bill, and then find it even harder to pay the tax when it becomes due.  It’s human nature to put things off, so smaller, more frequent tax payments will be better for taxpayers too.

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