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Any Answers survey: MTD and retirement options

An informal poll to find out how accountants are planning to cope with MTD

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AccountingWEB member Hugo Fair has noted the frequency with which other practitioners vow to sell their practice, trim their client lists or take other extreme measures to avoid the stress and workload imposed on them by Making Tax Digital.

To find out more about the tactics that fellow accounting professionals will be adopting over the next year or two, Hugo posted three separate questions in Any Answers, each representing a different approach.

To register a vote in his survey, click one the three options below to select the appropriate post, and either leave a comment in the usual way or “like” the post by clicking the thumbs-up icon if you want your response to remain anonymous.

Option 1: Accelerate your intention to retire (or wind-down provision of services)

Option 2: Reduce your practice to size your resources can service (despite impact on profits)

Option 3: Keep going and seek growth opportunities (even if how isn't immediately obvious

“This is NOT intended to be yet another post for moaning about the (im)practicalities of MTD,” nor is it a referendum, Hugo wrote. But based on the overall voting pattern and comments posted, he is hoping to clarify the plans of the majority of accountants – “Not just those of us who are already retired or were planning it shortly irrespective of MTD!”

We’re looking forward to seeing the results and hearing more about what Hugo thinks about them.

Replies (30)

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By I'msorryIhaven'taclue
05th Aug 2021 14:40

Given that MTD for IT is set to apply to the first accounting period commencing after 5th April 2023, then switching clients from a 5th April year end to a 31st March year end would surely postpone MTD for a further year.

For example:
sole trader or landlord with y/e 5th April 2023 would fall subject to MTD for IT from 6th April 2023; whereas
sole trader or landlord with y/e 31st March 2023 would fall subject to MTD for IT from 1st April 2024.

On which basis I guess we're voting on our plans for (almost) three years hence.

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Replying to I'msorryIhaven'taclue:
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By Paul Crowley
05th Aug 2021 14:52

Depends on the basis period issue

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Replying to Paul Crowley:
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By I'msorryIhaven'taclue
05th Aug 2021 14:57

Hi Paul,
I guess I'm assuming that self employed & landlord clients may will be advised (or otherwise twig for themselves) that they can give themselves a year's grace by backdating their 5th April year end date to 31st March.

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Replying to I'msorryIhaven'taclue:
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
05th Aug 2021 16:12

I suspect it's never advisable to assume anything when it comes to MTD and tax legislation.

After Wednesday's MTD Bootcamp webinar, Rebecca Cave got increasingly agitated about the imposition of the basis period for 2023/24:
https://event.on24.com/wcc/r/3299815/8ADE16AAA44D5220939ABF8D7996F439

In Rebecca's reading of the legislation, the change is going to remove the delaying tactic many accountants thought would buy them and their clients an extra year.

She's just checking with other interested parties, so keep your eyes on our news pages over the next day or two... (it would be nice if she was wrong, but I wouldn't bet against her)

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Replying to John Stokdyk:
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By Paul Crowley
05th Aug 2021 19:03

I am of the same opinion
MTD ITSA starts for everyone on the same day
If that date is in 2023 there will be mass failure to comply in any meaningful way.
The peasants revolt mark 3
Mark 2 was the poll tax failure to comply

Does anyone in authority or the Institutes really care about the incredible wasted time and resources for zero extra tax or even relevant data?

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Replying to John Stokdyk:
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By I'msorryIhaven'taclue
05th Aug 2021 20:29

Thanks John,

I'm indebted for the steer. I certainly wouldn't bet against the informed, and I must add thoroughly absorbing, dictum of dear Ms. Bennyworth.

I guess it's a racing certainty that the Revenue will create an impasse to close down the backdate to 31st March "loophole". Shifting sands!

Cue a record number of start-up companies? Lord knows what landlords will do to duck and delay this; other than reduce their rents, I suppose.

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Replying to I'msorryIhaven'taclue:
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By Tax Dragon
06th Aug 2021 06:37

.oO Only on Aweb. Technical queries get reduced to votes (people don't like hearing that the law is clear - it's much better if we can make up our own rules); a thread that is supposed to be a vote is immediately turned into a technical discussion.

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Replying to Tax Dragon:
RLI
By lionofludesch
06th Aug 2021 07:44

Tax Dragon wrote:

.oO Only on Aweb. Technical queries get reduced to votes (people don't like hearing that the law is clear - it's much better if we can make up our own rules); a thread that is supposed to be a vote is immediately turned into a technical discussion.

The law isn't clear. It hasn't been made yet.

Things get changed as they pass through Parliament. It happens every year.

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Replying to lionofludesch:
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By Tax Dragon
06th Aug 2021 09:02

Irony upon irony. I was making a general comment. About Aweb. Not a specific point about MTD. I thought one thing all Awebbers understood was generalisations.

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Replying to Tax Dragon:
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By I'msorryIhaven'taclue
06th Aug 2021 08:47

I just wanted to be clear on whether we were voting on our plans for 2023 or 2024.

I'm afraid my OCD rather got the better of me yesterday ;-)

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Replying to I'msorryIhaven'taclue:
rebecca cave
By Rebecca Cave
06th Aug 2021 13:03

Not Ms Benneyworth - but me.
See my latest article: https://www.accountingweb.co.uk/tax/hmrc-policy/mtd-income-tax-big-bang-....
I also received this from the HMRC press office this morning: " our officials just wanted us to make clear that the mandation date for MTD is 2023".

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Replying to Rebecca Cave:
RLI
By lionofludesch
06th Aug 2021 13:17

Rebecca Cave wrote:

Not Ms Benneyworth - but me.
See my latest article: https://www.accountingweb.co.uk/tax/hmrc-policy/mtd-income-tax-big-bang-....
I also received this from the HMRC press office this morning: " our officials just wanted us to make clear that the mandation date for MTD is 2023".

Suddenly it's as clear as mud.

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Replying to Rebecca Cave:
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By I'msorryIhaven'taclue
06th Aug 2021 14:14

My abject apologies, I must have speed-read Rebecca and assumed the rest.

Interesting link -I guess that block was inevitable. If I understand it correctly, then backdating to a February year end (or, come to that, a 30th March year end) isn't going to work either.

I guess there's going to be a glut of incorporations.

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Replying to I'msorryIhaven'taclue:
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By Tax Dragon
06th Aug 2021 14:32

Bring on MTD for CT.

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Replying to Tax Dragon:
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By Winnie Wiggleroom
06th Aug 2021 14:43

Tax Dragon wrote:

Bring on MTD for CT.


That is an interesting point, if I had been implementing this based on my client base I would have gone
1. VAT - on the basis that these were already doing quarterly
2. CT - on the basis that a company is more likely to be using software/an accountant
3. IT
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Replying to Winnie Wiggleroom:
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By lionofludesch
06th Aug 2021 15:12

Winnie Wiggleroom wrote:

2. CT - on the basis that a company is more likely to be using software/an accountant

Happen that's the point.

Folk already using software don't need so much persuading to use software.

In theory (the practice may be different), all you'll have after 2023 is a relatively small number of small companies.

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Replying to Tax Dragon:
RLI
By lionofludesch
06th Aug 2021 15:02

Tax Dragon wrote:

Bring on MTD for CT.

Yeah - I delayed MTDfVAT for most of my clients by switching to annual returns. They were all very happy to have an extra year or more to get ready - indeed, over two years before actually submitting a return in some cases. It's easily reversible, most have now switched back to quarterly, though one likes it so much he's stuck with it.

Incorporating your business ? I don't know if I'd've recommended that for many folk. It's a bit more permanent.

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Replying to Rebecca Cave:
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
06th Aug 2021 14:43

Thanks for this update, Rebecca - your detailed analysis should at least give readers some guidance based on the draft legislation to start planning around. Unless, of course, the ongoing discussions result in changes to the clauses.

But can I also respond to Tax Dragon and apologise for steering what was a simple poll on MTD RETIREMENT PLANS down a basis period rabbit hole.

If you want to debate the implications of the basis period arrangements, could I suggest you please follow the link to Rebecca's article so we can refocus here on Hugh Fair's original poll?

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Replying to John Stokdyk:
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By I'msorryIhaven'taclue
06th Aug 2021 15:25

Hugo's already gone off on a frolic of his own, below, agitating Kensington Tax Office with a BBC camera crew in tow.

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Replying to I'msorryIhaven'taclue:
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By Hugo Fair
06th Aug 2021 15:53

Whoops ... hadn't noticed that I was subverting other people's subversion of John's plan to direct traffic to the survey!
It's what makes these threads simultaneously infuriating and fascinating. :-)

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Replying to Hugo Fair:
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By I'msorryIhaven'taclue
06th Aug 2021 16:24

Not to worry, John has a zap gun in his arsenal.

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Replying to Rebecca Cave:
By ireallyshouldknowthisbut
06th Aug 2021 16:19

Rebecca Cave wrote:

Not Ms Benneyworth - but me.
See my latest article: https://www.accountingweb.co.uk/tax/hmrc-policy/mtd-income-tax-big-bang-....
I also received this from the HMRC press office this morning: " our officials just wanted us to make clear that the mandation date for MTD is 2023".

@ms Cave, HMRC can mandate what they like, but getting people to do stuff is quite another matter. How many unrepresented tax payers are going to manage this exactly? The level of disengagement when things are too hard is very high.

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David Winch
By David Winch
05th Aug 2021 17:29

I remember very similar comments when self-assessment was being introduced.

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Replying to davidwinch:
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By I'msorryIhaven'taclue
05th Aug 2021 20:42

Me too, except I've long since cleared the rhyme and reason from my memory banks.

My abiding recall is of arriving at the local tax centre at around 11.40pm 31st January to find the night staff had prematurely jammed a wooden wedge into the Revenue's make-believe post box (the way Royal Mail does now and again when it's on strike) to prevent any further paper returns being "posted". And a guy who lived nearby - an accountant, that is - who like the rest of those accumulated (about a dozen of us by then, each sporting a number of last-minute SA returns) rightly thought this an injustice - nipped off home for a jemmy / hammer / chisel and, with a combined effort that is rare to the accounting profession, the wedge was duly removed.

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Replying to I'msorryIhaven'taclue:
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By Winnie Wiggleroom
06th Aug 2021 06:22

Those were the days, the signed paper returns piling up in the office and the satisfaction of taking them over to the local office and handing them all over

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Replying to I'msorryIhaven'taclue:
RLI
By lionofludesch
06th Aug 2021 07:47

The latest I've delivered a return was about 11.30 on January 31st, on the way back from a midweek rugby match.

Of course, at the time, there was no penalty if it was delivered on 1st February.

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Replying to lionofludesch:
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By Hugo Fair
06th Aug 2021 12:57

Ah, happy late nights spent at Charles House in Kensington (now demolished and replaced by acres of expensive flats sold to foreign investors and standing empty - quite appropriate I suppose)!

There were always two easily distinguishable groups in the waiting room:
1. Harassed accountants, trying not to drop/jumble the 30-40 sets of returns they were waiting to 'file' ... including one guy who'd prepared a single page 'schedule' listing all his returns and was happy to accept a 'receipt' stamp on this ("so as to save you the time of stamping each one") - which to my amazement worked without anyone checking for correlation of schedule to physical returns.
2. Unrepresented taxpayers, who had apparently always visited the pub first for 'dutch courage' ... and were now trying to complete the forms on their knees, despite a tendency for pens being dropped (sometimes followed by the taxpayer)!

One year, HMRC staff got fed up with this circus and tried to close the main doors around 23:40 ... but hadn't noticed the BBC crew in the street doing a story on last minute filing - until I pointed out the lockout to the cameraman, whereupon the doors were rapidly re-opened!

I'm not saying paper returns were a boon to efficiency, but it was all a lot more fun in ways that hadn't really changed for centuries (people, chaos, officialdom).

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Replying to davidwinch:
By ireallyshouldknowthisbut
06th Aug 2021 16:12

@David, everyone hates change as it means a huge investment in time to work out how to do what you did before quite easily.

However in this case the issue is not changing to the system as much as the "do it 5 times a year" instead of "do it once". Which flies in the face of every administrative efficiency when dealing with small clients.

For clients we can get to do it well, it will mean SA season can be over by the summer but its a huge investment in time and energy to faff about with complex system which right now consists of "email me a dozen documents" for many small clients, and its all done and dusted computationally in 30 minutes.

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Replying to davidwinch:
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By Jo Nokes
06th Aug 2021 20:25

But the change to self assessment was a clear improvement, and seen as such within a very short time. This coming change is very clearly not going to deliver any more information than the present method, but will take much more work for accountants dealing with small traders. And I do wonder when HMRC is deigning to inform some 3m unrepresented tax payers of their new obligations

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By JD
07th Aug 2021 15:56

On a slight different tact to the replies so far, I am in the wait and see camp. For the small client over the next year or so I suspect (hope) that there will be software developments that will ease some of the pain.

There are currently US based products, such as tillerhq and money in excel, whereby one can set up a bank feeds pushing data directly into excel (not yet available in the UK), and banking apps that are not banks, from Counting Up and the like. Beyond that it will be interesting to see what solutions btc, taxcal and taxfiler come up with.

As for decisions now it's a case of:

(1) Only act for clients who are prepared to work with you, to maintain reasonable records, weeding out those that will not play the game, and
(2) Do not allow ourselves to become hostages of Xero, QBO and the worst of them sage, who have massively overstepped the mark, instead of acting with respect for and in support of the profession.

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