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Digital record keeping: Vendors react

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18th Mar 2016
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AccountingWEB’s consultant tax editor Rebecca Cave nearly caused an earthquake of anxiety with her recent article “Digital accounting records to be compulsory”.

Cave’s article reported on the revelation that under the auspices of Making Tax Digital, the government expects every business to keep its accounting records in digital form.

“Each business and landlord will have to use some form of accounting software which has a capability to communicate with HMRC’s systems,” wrote Cave. “However, moving to a commercial software package will mean extra costs and data transfer problems for many businesses who have created their own bespoke accounting software, or who rely on Excel spreadsheets.”

The user Ireallyshouldknowthis neatly summed up AccountingWEB members’ reactions: “Mr Gauke has got his head up his backside on this one, no doubt the hard lobbying from the software companies about how great all of this is paying off.”

This comment could be seen as indicative of the scepticism held by our members towards the initiative. But what are software companies saying and thinking about Making Tax Digital? We spoke to a few key players to find out.

Ed Molyneux, founder and CEO of FreeAgent:

“We believe HMRC’s tax digitisation agenda is encouragingly farsighted - it would have been far easier and less controversial to allow the status quo to continue indefinitely. But that’s not on the cards, and anyway it's simply unsustainable for HMRC.

“We must always remember the punishingly disproportionate cost of compliance for small businesses, not just in the obvious areas of fees and software costs but in the time taken to manage ledgers, spreadsheets and bits of paper. Handwritten ledger books, shoeboxes of invoices and home-made spreadsheets are simply not good enough, and should be consigned to the dustbin. And what is the cost in business failure of business owners with no idea about what's happening until their accountant pulls it all together once a year? Why, as an industry supposedly striving to help businesses succeed, do we defend this?

“There’s a once-in-a-generation opportunity for change. A major side-effect of tax digitisation - and yes, mandatory digital records - will be the dramatic improvement of the financial literacy of all of the UK’s smallest businesses, by nudging them finally into the 21st century.

“The cloud software industry already provides hugely automated, easy-to-use tools for the rapidly increasing number of businesses who embrace them. FreeAgent customers tell us every day that we have transformed how they manage their businesses. We - and our very capable competitors - are busy every day making our systems even better for both business owners and accountants. And as tax digitisation is rolled out, we are also planning to ensure free tools will be available for those whose businesses need them.

“It does seem that AccountingWEB is something of a lightning conductor for negativity on MTD! The proportion of rational response to outrage is far lower than in our conversations with the wider practice community.

“I’ve particularly been dismayed by the comments from some accountants on AccountingWEB, who having failed to provide the appropriate leadership, guidance or training to their clients whom they profess to support, on the matter of setting up effective financial systems, prefer instead to rustle up conspiracy theories about a government and a software industry in cahoots.

“The UK’s smallest businesses deserve better from their accountants than that.”

Gary Turner, managing director of Xero UK:

Speaking at Xerocon 2016: “Whether you think this is a two-year, five-year or ten-year project we have no choice as a nation. We’re not going to be running our compliance and engagement with HMRC in 2025 on processes and workflows that were designed on paper. We either do it now, or we delay it ten years. But one way or another, as a nation, we have to embrace tech right across the spectrum.

“As their [HMRC’s] strategy to build a whole new world of web-based services using a very adventurous API strategy, I have to hand it to them. It’s great to see, as a citizen, that our government is so ambitious - not without the challenges of getting there of course.

Since Xerocon, Turner hasn't changed his view significantly: “The execution is not to be underestimated in terms of degree of difficulty, but the objective is sound. We can’t expect to play a role as a leading G8 economy in the 2020s and still operate paper form-based compliance processes.”

Steve Cox, product director of IRIS:

“As with most legislative changes, governing bodies rely on third party vendors such as IRIS to enable UK businesses to comply with new mandates. For IRIS, we already provide both accountants and SME’s with well-established digital solutions to cater for all their business requirements. For us this is just another legislative change but the impact on our accountants and businesses is much bigger. We are here to make this compliance change as simple as possible for them.

“IRIS has been in discussions with HMRC on MTD for some time and understands the direction it’s going in. MTD allows for direct connections to be made with HMRC via its API first strategy. HMRC wants to be able to collect the data in the most efficient and automated method; with a standard format or process. For HMRC, it wants to be able to collect and provide access to taxpayers’ data in the most efficient and automated method.

“By moving to a digital process, accountants and their clients will benefit from automated processing of transactions behind the scenes, allowing them both to focus on their core businesses. Whilst the anticipation is that quarterly reporting to HMRC is going to be an additional burden; using fully automated, digital solutions will reduce the amount of effort required and simplify the review process dramatically.”

What's your opinion on these comments? Tell us below!

Replies (86)

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Replying to tom123:
RLI
By lionofludesch
21st Mar 2016 13:54

Moaning Minnies ?

Glennzy wrote:

I am quite disappointed by the Freeagent guy branding Aweb members (the people who sell and recommend your software) as moaning minnies.

I'd prefer to say realists.

Sure - I can take Aunt Ada's money and sort her filing for her.

But I'd rather have her spend her money on heating than my fees or, indeed, Freeagent software.

There is nothing in this to enhance her "business" beyond extra costs.

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By cheekychappy
21st Mar 2016 13:12

“I’ve particularly been dismayed by the comments from some accountants on AccountingWEB, who having failed to provide the appropriate leadership, guidance or training to their clients whom they profess to support, on the matter of setting up effective financial systems, prefer instead to rustle up conspiracy theories about a government and a software industry in cahoots.

“The UK’s smallest businesses deserve better from their accountants than that.”

A lot of assumptions and digs about accountants he does not know. He has just managed to alienate a small part of his target market. Well done.

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blue sheep
By NH
21st Mar 2016 13:26

Freeagent

On the subject of Freeagent, I really like the software but I was disappointed that my client could get it for half the price I could because he banks with Barclays, when I asked Freeagent they said I could get it for the same price but I would have to commit to at least 10 licences!

Sage seem to have a much better pricing structure for accountants but the software isnt as good.  

I dont know what anyone else thinks but for my small clients a starting price of no more than £5 a month is about right, anymore than that they wouldnt pay (or I could not absorb the cost in my fees).

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By justsotax
21st Mar 2016 14:10

all in then name

of progress...I am sure when they started using calculators at school it was probably called something similar - after all when do people need to add up in their heads.

 

Its not progress - just an easier way for the Revenue to extract maximum information from individuals but without needing to incur the cost - indeed passing that to the 'customer' (is that what you would do for our 'customer'?). 

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By Lingfield
21st Mar 2016 15:12

"U" turn

Hopefully the government will be forced into a "U" turn on this ridiculous proposal, just as they have over reducing PIPs.  

They are proposing a requirement that many taxpayers are incapable of meeting, indeed like many taxpayers I don't possess a smart phone either, have no need of one, and no intention of buying one.  

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By Crouchy
21st Mar 2016 15:47

automated mistakes

just using software alone wont make things better or more accurate

i've always maintained that a client should only use bookkeeping software if they have the time and inclination to do so and do so properly. if they are forced into to using something they don't want to use they'll make a pigs ear of it. they'll leave it to the last minute and just post things willie nilly to get something done, regardless of whether its right or wrong.

automation on software will only help to automate the mistakes that are going to be made

 

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By steve 12321
21st Mar 2016 17:24

Despite my views I have to have respect
For Gary for coming into this forum and entering into a debate on this.
However, it is a terrible and backward
Move
To force this on businesses

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Replying to SXGuy:
RLI
By lionofludesch
21st Mar 2016 17:55

Target

steve 12321 wrote:
Despite my views I have to have respect For Gary for coming into this forum and entering into a debate on this. However, it is a terrible and backward Move To force this on businesses

Indeed - and I hope he's gone away with some understanding of how small small can be.

 

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By steve 12321
21st Mar 2016 17:30

Wake up a giant
When clients hear of this we could mobilse them with us and kick up a fuss. Clients news to be able to be left to earn a living, not be forced to deliver all this information with no benefit with all the extra fees and costs. So business and landlords will despise conservatives soon. Unemployment rises as firms don't hire due to AE. Small businesses struggle with MTD. Look though taxes will be a final nail too. Disaster policies

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By John Skinner
29th Mar 2016 12:10

Digital record keeping

Apologies if this has been mentioned elsewhere already (I don't have time to read all the posts), but how on earth are HMRC going to cope with all this new data?

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By Ian McTernan CTA
29th Mar 2016 12:17

Lost in space

I don't know who is advising the Govt at the moment, but clearly they have no clue what it's like to run a small/micro business.

Most of them would have neither the time, ability or inclination to learn how to use a digital accounting system just so HMRC can get their hands on information earlier.

Most of the ones that do, need people like us to sort out the mess they then make of the entries.

If they expect landlords to suddenly become experts at software to report their income it's going to be a mess- not to mention when and if to enter an expense.  Is it capital, revenue or a split?  Pretty sure quite a few won't know, won't ask, and will just throw it in there on the last day before pressing the submit button.

There is a good reason a lot of people don't use software for these things- it's because they are good at their business, not good at being accountants- which is where we come in.  They don't want to have to spend hours and hours inputting data when they can throw a bundle at us and tell us to sort it all out- and we then have 9 months+ after the year end to sort it all out, correct things and file a sensible set of accounts.

Under the new system it's going to be a continuous revision of previous figures system, leading to huge increases in costs for smaller businesses.

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By Lordeano
29th Mar 2016 13:01

Free Agent

Wow, Ed Molyneux...   How dare members of an accounting forum comment that they are not convinced that HMRC have the capability to manage this properly, do not have the resource to remotely look at what they are asking business to provide, are talking about removing small businesses ability to manage their affairs in the way that they feel is most suitable and that for all that benefit they have to pay your company or those like it a fee.

Excel databases for small companies are perfectly adequate, and if you convert that annualy into IXBRL accounts, why does HMRC want more unless they are conducting a review/investigation?

For accurate accounts, its my opinion that the software is the least of the worries.  Accurately counting/managing stock, using prepayment and accruals properly, managing fixed assets, intangibles, depreciation and amortisation all have a much greater bearing.

The saving grace here, is that if it goes ahead, then free software will become readily available, severely hampering the likes of Free Agent.

Foisting unnecessary fee producing software on a client when they will see no tangible benefit is not the way I like to support my clients!

I would suggest your time would be better spent convincing accountants that your software is the best of the bunch, and converting people through choice not compulsion.  Your comments have certainly lost you one accountant, and I imagine many more reading this will never use Free Agent.

 

 

 

 

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By User deleted
29th Mar 2016 12:41

Just goes to show ...

... the software houses have no more clue about the real world than the government.

For most of my clients, me putting it together once a year just confirms what they knew already, for the real sole trader a simple spreadsheet or even book is more than sufficient.

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By Pavilionaire
29th Mar 2016 12:51

Accountants aren't the problem, it's HMRC

I believe that accountancy as a profession is used to change and will deal with MTD, however what worries me is that it will send HMRC into meltdown and that will have a knock-on effect for agents and taxpayers alike.

What makes me laugh is the latest Intuit QuickBooks TV ad campaign where the tax man is still portrayed as a bowler-hatted 'Hector' figure.  HMRC withdrew this character from their ad campaigning 15 years ago, but the public perception of HMRC clearly hasn't changed! 

At a time when HMRC are working with software companies to get them to buy into this cutting edge tax collection system those companies still choose the Hector image for HMRC.  That says it all.

 

 

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By North East Accountant
29th Mar 2016 12:54

Professional V Salesman

I personally find it a bit insulting the comments by the CEO of Freeagent where he says accountants have failed their clients. No sir, we have not.

We put our clients interests ahead of our own and don't sell stuff to them that they do not need. Most software companies will flog you anything you express an interest in regardless whether you need it or not.

That is the difference between a professional and a salesman.

 

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Guest speaker, Jonathan Russell
By Jonathan Russell
29th Mar 2016 12:56

Technology can

Like many things in life and business there are things which technology can deliver. But just because technology can do it does not mean that technology should do it. There is information which in any business that the proprietor needs daily/weekly/monthly/quarterly/annually/longer but the important thing is that from a business point of view it needs to be delivered in as cost effective and in an easily understood format when it is needed. The annual accounts are probably the least important information in a business as that is all history and the future may be more important. How do I tell my film maker on a 7 month project in the Amazon Jungle that he needs to be updating his information on-line and reporting quarterly?

Small and micro businesses don't need any accounting package, if fact the average accounting package would probably give them less information than they currently have or often in a format they don't understand, plus the chances are they will put the information in wrong. How often do we see Xero users who have allowed the software to auto learn how to treat payments and get them all in the wrong place?

Surely as with VAT and PAYE we need an annual accounting function for the tiny business - we all appreciate that the main driver for this is to accelerate tax collection but a small business could easily cope with a requirement to file within one month of their year end.

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By Lordeano
29th Mar 2016 13:11

Free Agents Terms and conditions:

Direct quote from the Free Agent terms and conditions:

"No guarantees: We make no guarantee that The Service will be suitable for your intended use, neither do we guarantee that it will be error-free, timely, reliable, entirely secure, virus-free or available, especially since we are dependent on the reliability of the Internet and your use of your own computer to access The Service. We will try to keep disruptions to a minimum but we may suspend The Service from time to time to carry out maintenance and support work and to investigate unauthorised use. The Service is not a substitute for a professional accountant and any information presented does not constitute accounting advice. "

 

 

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Replying to Cheshire:
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By The Black Knight
30th Mar 2016 10:16

love it

Lordeano wrote:

Direct quote from the Free Agent terms and conditions:

"No guarantees: We make no guarantee that The Service will be suitable for your intended use, neither do we guarantee that it will be error-free, timely, reliable, entirely secure, virus-free or available, especially since we are dependent on the reliability of the Internet and your use of your own computer to access The Service. We will try to keep disruptions to a minimum but we may suspend The Service from time to time to carry out maintenance and support work and to investigate unauthorised use. The Service is not a substitute for a professional accountant and any information presented does not constitute accounting advice. "

 

 

love it sort of "sort your own mess out its not our problem" attitude

obviously Firm culture?

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By youngloch
29th Mar 2016 13:17

Quality will fall with this

As an accountant I am fussy with my staff and with clients.

Things must go in the right place and we prepare, and reconcile, balance sheets for all self employed clients no matter what their size is.

For every debit there must be a credit. Will the taxpayer be expected to balance debtors/creditors/cash and the bank? Will this just be an income and expenses exercise.

I foresee balance sheets being abandoned for our self employed clients moving forward, I would love to think they will take on doing part of the data entry themselves but, as we all know, clients are not accountants and there WILL be errors made.

Most clients will simply not want to, or not be able to, or not have time to deal with this and then what?

I tell you what it will be late instructions, half baked attempts at doing it themselves and pressure on us to relax the standards we have tried so hard to maintain in the past. It takes longer to prepare accounts for those that try an do it themselves and fail than it would if we just did it properly from scratch.

Also, and correct me if I'm wrong, but for most small businesses with incomplete records (e.g. most of our clients), then a spreadsheet works! Speedy entry and flexibility plus the abiity to undertake quick reviews with all entries easily reviewed helps us spot mistakes/missing data.

Integrated systems are great for the most organised...............

Overall as I say to builder clients quite often, I could try and build a wall and ask them to check it but I'm not a builder and I know that any decent builder would want to demolish it, clear the rubble and start again.

We will be under pressure to let it go even though it's wobbling like crazy!

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By Diana Miller
29th Mar 2016 13:23

Computerised Records

I am COMPLETELY against mandatory digits book-keeping records. I have clients that keep very good manual records but struggle with computers and would probably keep their records less well on computer. For 100's of years we have managed without computers and to force people to be computerised just because they are self employed is wrong. 

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By nicdell
29th Mar 2016 13:57

Digital record keeping

What a wonderfully high standard of debate. It's been a pleasure - and instructive - to read all the comments on this extremely important issue and it clearly demonstrates the value of the Accountingweb community. It is quite clear that where HMRC have gone so very badly wrong is to have failed to consult with the accountancy profession, failed to take account of their concerns and failed to accept that the way to proceed would be other than by way of compulsion and with the possibility for smaller businesses to be outside the quarterly reporting system entirely. They do seem to have chosen the hard way and to want to proceed with unnecessary haste. 

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By cvsmith
29th Mar 2016 13:57

Internet availability
My main concern is that in great parts of the country there is still poor or zero internet. This needs to be addressed first.

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By leon0001
29th Mar 2016 14:15

Reality check.

So, digital records and quarterly filing will become mandatory for all small tax return cases in two years and eight days from now.

Is there a precise definition of what comprises digital records? If so, where will I find it?

Can we see a specification of precisely what data is required to be transferred to HMRC's system at quarterly intervals? If not, when will this be published?

Are any software providers able to state, as at today, that their systems are able to comply with HMRC's requirements and have been so approved? If not, when do they expect to receive such approval?

Is there any existing statutory authority for the mandatory digital and quarterly accounting requirements? If not, when will these be published?

Is HMRC able to receive and adequately process such data? If not, when will it guarantee that it will be able to cope?

Is any of this going to be piloted, tested and debugged? If so, when? If not, why not?

Do they really need quarterly digital records for a taxpayer with four rent receipts and thirteen payments per annum? Or for a guy who sells bunches of flowers out of the back of his van?

Sorry to appear a bit negative about this but I simply do not believe that this will be up and running in the mandated timescale.

(Just for the record:

HMRC still has to re-key the data from trust tax returns filed by internet.

HMRC's system for processing self assessment tax returns is still incapable of correctly handling certain circumstances without a "work-around" at their end.

Some taxpayers are still required to file paper returns because the current system is deemed to be insufficiently secure.)

 

 

 

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RLI
By lionofludesch
29th Mar 2016 16:14

Of course not.

HMRC's stock answer to all questions is "it hasn't been decided yet".

Well, hurry up and decide because five or six million taxpayers have plans to make.

Maybe........

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By Dilwyn
29th Mar 2016 17:04

Disaster waiting to happen

 

Most of my clients are farmers,builders, plumbers, OMB type of people,who are very good at what they do. They are not interested in interim management accounts, do not have a software package,do not want one,would not know how to use one. They are busy people trying to make a living doing what they do best, if I have to explain this digital farce to them,I know what they will say ....   The people who are making this decision to go digital ,are not in the real world of OMB type of taxpayers,it should not be forced on them.

Using a tablet or phone to order something from Argos is a long way from entering all of your income and expenditure and uploading it to HMRC.

What about private adjustments,loan interest, Vat adjustments,HP interest,stock adjustments etc!

The vast majority of self employed people do not know this is in the pipeline,if they did there would be much more of uproar about it.

I just cannot see how this is going to work on a practical level.

A disaster waiting to happen

 

 

 

 

 

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By The Black Knight
29th Mar 2016 17:30

compulsion

Compulsion clearly means that there is not a saving at least not for the tax payer.

If it was an advantage and this software was as good as the non-accountant salesman recons then market forces would do this.

To use this software correctly you need more financial knowledge not less.

Accountants fees are likely to increase especially mine as sorting out the muddle requires an expert not someone who went on a software course once or just decided they knew best.

Simples have an accountant or pay a lot more tax and penalties

HMRC are already ignoring the 4 year enquiry limit when they have software records going back years.

Some of the software is not brilliant and limited in various aspects.

The best accounting system that ensures the correct amount of tax and management information is one that the client understands and can explain to his accountant.

In 30 years I have seen one set of records that were close to being 100% correct and the franchised accountancy firm told the poor woman she had messed up because they didn't understand the difference between accruals and cash accounting. and much less that quickbooks had a button for this. She had even understood the difference between realised and unrealised foreign exchange differences.The resulting set of accounts were also probably the worst I'd seen in my career.

Most of the time I am left sorting out a muddle that no one cares whether is right or not.

If the governments aim is misinformation and I suspect it is then that is what it will get.

I expect we will get more compliance work rather than less.

Happy days

Sage seem to have the best setup with their sage drive.

Quick books online is slow and cumbersome

Sage one - well not very useful doesn't even transfer data records.

Zero - just more expensive quickbooks

free agent - no idea probably not free and judging by article all P--- and wind.

Think these software companies are going to have to raise their game to fulfil HMRC requirements so I expect the result will fall somewhat short of the dream as usual.

recent examples - RTI - still can't get paye codes correct - in fact errors getting worse.

self assesment - so much missing tax it's nearly bankrupt the country.

companies house - ministry for disinformation - file any old crap and we don't care

SA302's - no you can't have a mortgage

HMRC combined - stake out, spot half the missing takings and dividends fraud - totally miss the illegals and paye and what about the VAT ?- superb.

Auto enrolment - just a rip off - admin and bullshitters heaven.

At the end of the day we have our client's best interests at heart and most of us at this end of the market do not rub our hands with glee everytime there's a change and opportunity to raise more fees.

 

 

 

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Replying to Hugo Fair:
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By User deleted
30th Mar 2016 16:45

Freeagent ...

The Black Knight wrote:

Compulsion clearly means that there is not a saving at least not for the tax payer.

If it was an advantage and this software was as good as the non-accountant salesman recons then market forces would do this.

To use this software correctly you need more financial knowledge not less.

Accountants fees are likely to increase especially mine as sorting out the muddle requires an expert not someone who went on a software course once or just decided they knew best.

Simples have an accountant or pay a lot more tax and penalties

HMRC are already ignoring the 4 year enquiry limit when they have software records going back years.

Some of the software is not brilliant and limited in various aspects.

The best accounting system that ensures the correct amount of tax and management information is one that the client understands and can explain to his accountant.

In 30 years I have seen one set of records that were close to being 100% correct and the franchised accountancy firm told the poor woman she had messed up because they didn't understand the difference between accruals and cash accounting. and much less that quickbooks had a button for this. She had even understood the difference between realised and unrealised foreign exchange differences.The resulting set of accounts were also probably the worst I'd seen in my career.

Most of the time I am left sorting out a muddle that no one cares whether is right or not.

If the governments aim is misinformation and I suspect it is then that is what it will get.

I expect we will get more compliance work rather than less.

Happy days

Sage seem to have the best setup with their sage drive.

Quick books online is slow and cumbersome

Sage one - well not very useful doesn't even transfer data records.

Zero - just more expensive quickbooks

free agent - no idea probably not free and judging by article all P--- and wind.

Think these software companies are going to have to raise their game to fulfil HMRC requirements so I expect the result will fall somewhat short of the dream as usual.

recent examples - RTI - still can't get paye codes correct - in fact errors getting worse.

self assesment - so much missing tax it's nearly bankrupt the country.

companies house - ministry for disinformation - file any old crap and we don't care

SA302's - no you can't have a mortgage

HMRC combined - stake out, spot half the missing takings and dividends fraud - totally miss the illegals and paye and what about the VAT ?- superb.

Auto enrolment - just a rip off - admin and bullshitters heaven.

At the end of the day we have our client's best interests at heart and most of us at this end of the market do not rub our hands with glee everytime there's a change and opportunity to raise more fees.

... is good if you have one or two sale invoices and 10 -12 purchase invoices, any more and it struggles a bit.

You missed KashFlow, this is good and getting better, and is very easy to use with an hour or so tuition, however, because it is easy to use it is easy to get things very wrong very quickly!

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By peter morgan
30th Mar 2016 07:14

View of an Aussie exPat

Interesting that there is much resistance to clients having access to up to date real time financial data - probably a British thing kicking back against it because it's being mandated. Quarterly reporting has been in Aus for quite some time and its pretty painless for most. The key point most are missing is that embracing cloud and having real time financial data facilitates much better decision making and business management. Not for all, but for a significant proportion.

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Replying to lionofludesch:
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By The Black Knight
30th Mar 2016 10:22

pro financial data being timely and useful

peter morgan wrote:

Interesting that there is much resistance to clients having access to up to date real time financial data - probably a British thing kicking back against it because it's being mandated. Quarterly reporting has been in Aus for quite some time and its pretty painless for most. The key point most are missing is that embracing cloud and having real time financial data facilitates much better decision making and business management. Not for all, but for a significant proportion.

 

I expect we are all in favour of up to date finacial information where it's

1, Useful ,

2 Reliable

3, Cost effective

and

4, not compelled by an overbearing state of nitwits

In England we have a culture of standing up to the bully!

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Replying to lionofludesch:
blue sheep
By NH
30th Mar 2016 10:28

who do you speak for?

peter morgan wrote:

Interesting that there is much resistance to clients having access to up to date real time financial data - probably a British thing kicking back against it because it's being mandated. Quarterly reporting has been in Aus for quite some time and its pretty painless for most. The key point most are missing is that embracing cloud and having real time financial data facilitates much better decision making and business management. Not for all, but for a significant proportion.

Peter - how many UK small businesses do you speak for?

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Replying to lionofludesch:
RLI
By lionofludesch
30th Mar 2016 12:42

Aunt Ada

peter morgan wrote:

Interesting that there is much resistance to clients having access to up to date real time financial data - probably a British thing kicking back against it because it's being mandated. Quarterly reporting has been in Aus for quite some time and its pretty painless for most. The key point most are missing is that embracing cloud and having real time financial data facilitates much better decision making and business management. Not for all, but for a significant proportion.

"Better decision making and financial management" for Aunt Ada with her monthly cheque from the estate agent ?

What exactly is in it for her ?

There are a lot of people in the UK who have no real interest in becoming multinational conglomerates.  They just want to make a big enough wedge to pay the bills.  Unambitious they may be, but digital accounting holds nothing for them except extra costs.

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Replying to lionofludesch:
RLI
By lionofludesch
30th Mar 2016 15:22

What and When ?

peter morgan wrote:

Quarterly reporting has been in Aus for quite some time and its pretty painless for most. 

I'd be interested in knowing what the Aussies report - particularly down at the pico end of the scale - and over what time scales.

How do they convert quarterly reporting into proper annual accruals accounts ?

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By youngloch
30th Mar 2016 14:01

My opening salvo to clients

Tax Return reminder letters for 2016 are about to go out.

This year I am giving clients a heads up as to what is ahead in terms of digital submissions.

I am trying to get them to instruct by 30 June (that will give them a 3 month window) - how many will abide by that?

I am also suggesting that any clients who currently do not do any part of the bookkeeping process should contact us if they would like to and that we will then guide them towards the best suited software for them to use.

Am I expecting a flood of enquiries - absolutely not! I am however open to the prospect and hopeful that of 300 clients that perhaps 10% may show some interest!?

I am also realistic that most will probably not even read the letter..................

Overall my opinion is that those of us at the sharp end with the smallest clients are being very honest as to what we know will happen but we also know that HMRC will not listen and therefore are preparing to once again carry the burden of responsibility to somehow (not quite sure how yet!) make it work.

It's not as simple as refusing to act for clients who are not prepared/able to go digital on their own unfortunately................

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By elpedro1977
30th Mar 2016 15:33

What if?

We refer to productivity of cloud accounting and all that it offers, even to those that don't need it. I would be an advocate were it to be considered on the facts of the case, namely the 12-invoice a year consultant not requiring it. One question that bothers me is, if there happens to be a UK-wide internet outage, somewhat similar to what happened with BT not so long ago. What contingency provisions are in place to deal with that and possible limited internet access? @ Xero @Freeagent @potential holidays for accountants/bookkeepers??

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By steve 12321
31st Mar 2016 13:08

Write/call/visit MPs
I am telling everyone they need to lobby their MP and write to 10 Downing Street to object. Will start writing to clients now informing of the changes and that I don't actually know what they will be and how much it will cost (I mean save them their share of £400m) them.

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By trecar
31st Mar 2016 13:47

The logic behind it

So far I have been unable to find any research into the likely impacts of this proposal. But it does seem to me to that the proposal is very much directed to reducing the time lags before taxes flow into government coffers. If government consulted with the software companies then it would be a biased consultation as the possibility of increased business would be a driver to laud the positive aspects whilst playing down the negative aspects. The impacts on business do not seem to have been properly considered nor does the impact on the quality of delivery.

Currently there are calls for public companies to stop quarterly reporting as it is distorting management behaviour. So has anyone asked what, if any, changes in business behaviour will take place as a result of this proposal? For it to work to any extent I imagine it would have to be based on the cash flows of business as to do otherwise could place the survival of a business in jeopardy. The VAT fraud perpetrated through cross border trading conjures up myriad examples of how the system can be gamed so the risks must be phenomenal. The history of government when it comes to IT is pathetic so I am very wary of any claims that are made by civil servants or their masters. All in all it looks as though it is a disaster waiting to happen and to head for it with only a two year preparation period is total folly.

PS. I find it very depressing that there seem to be so few software companies supplying good quality systems at a reasonable price, and also the part the Revenue play in unnecessarily complicating the processes. Something for the competition authorities to examine?

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