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Does MTD not just mean quarterly shoe boxes?

If a client brings paperwork in more regularly, do they really need to be more digital?

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Hello

I work for a small bookkeeping practice in rural suffolk. We have many sole traders who are only just getting used to receiving communications by email, let alone using their phones to record their receipts.

I'm embracing the digital and all that comes with MTD, however I know some of my clients won't want to got there at all.

I'm assuming that providing they bring their paperwork in to us more regularly, so that we can complete their quarterly summaries for HMRC in a digitally compliant manner - they'll be fine?  

Many thanks

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RLI
By lionofludesch
06th Feb 2017 10:50

We don't know whether they'll be allowed to submit summaries yet.

The original idea was transaction by transaction on proper software. We don't know how far that will be watered down.

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By ireallyshouldknowthisbut
06th Feb 2017 10:51

Yes is the short answer.

Main issue is timing - you only have a month to do 3 months of work, and all SA clients will want the same Q end - March.

So its a real block on your time, unless you do it monthly which is generally inefficient for small clients. ie 12 times asking for it, 12 times shuffling it to and from etc etc.

On the plus side the data is NOT USED FOR ANYTHING, so you can bung in any load of incomplete cobblers, and pick it up on the 5th filing which is where the tax adjustments are done.

Thanks (5)
Replying to ireallyshouldknowthisbut:
RLI
By lionofludesch
06th Feb 2017 11:02

ireallyshouldknowthisbut wrote:

Yes is the short answer.

Main issue is timing - you only have a month to do 3 months of work.....

Do we know this ?

Do we know anything ?

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Replying to lionofludesch:
By ireallyshouldknowthisbut
06th Feb 2017 11:54

Well, that is what was in the proposals, and they have barely shifted them, only tinkered at the edges.

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By TinaPS
06th Feb 2017 11:07

we'll have digitalised compliant software containing the individual transactions, so that would be okay.

I'm trying to get my ahead around the impact on workflow, because as you say, 1 month to do quarterly accounts for all of our clients would be tricky to say the least.

I did read that they could submit quarterly summaries or even more regularly if they wish... with that in mind I thought there may be scope to set different deadlines, by submitting a few monthlies in order to reschedule their quarterlies?

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Replying to TinaPS:
RLI
By lionofludesch
06th Feb 2017 11:19

If they were allowed to be no more than, say, four months in arrears at any one time, that would help accountants manage their workloads.

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By Duggimon
06th Feb 2017 11:18

There's no point trying to get your head round it just now, just being aware that something is coming and that we need generally to be aware of it is all we can do.

Nobody knows anything for sure about how any of it is going to work and anyone who tells you otherwise is probably either mistaken or trying to sell you magic software that'll take all your worries away.

I suppose if you wanted to spin it another way, having technophobic clients is perhaps a good thing as they're likely to find themselves completely and utterly reliant on you.

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Replying to Duggimon:
paddle steamer
By DJKL
06th Feb 2017 11:46

And we are going to be more dependent upon the software providers including a practice management module, frankly it is bad enough already keeping on top of:

1. Has RTI payroll been run, FPS or EPS submitted?
2.Has CIS return been done?
3. Has vat return been done?
4.Have accounts to Co Hse been done?
5. Has CT600 been done?
6.Has partnership SA return been done?
7.Has SA return been submitted?
8. Does Engagement letter need updated?
9.Do MLR checks need reviewed/screened/ risk evaluation updated?

Now we think, but do not know, that quarterly reporting under MTD will marry in with vat quarters for those already registered, but given not all client vat quarters marry with their existing year ends there is going to be a need for change.

If I wanted to get ahead of the loop I might be arranging to change some return periods to match year ends pre MTD adoption, this is something that can be done now and will likely make life simpler later.

Where there is certainly going to be additional work is helping re quarterly submissions, a fair few clients will have been happy to do a vat return but not a quarterly "accounts" submission, I suspect more will devolve vat and quarterly MTD to accountants as a combined role.

Maybe some judicious shuffling of client year ends would also assist to manage agent workflow, I do not do that many vat returns but note I do have:

Jan/April/July/Oct -3
Feb/May/August/Nov -2
Mar/Jun/Sept/Dec -6

Now what strikes me is that July, being the month I always take a holiday (Wife works in a school) is going to be trickier-it has always been difficult juggling, usually I delay going away until circa 12th and cram the 6 June returns in before I go, with further accounts reporting this is not going to be funny if , say, I was still working a five day week at the day job, there are only so many evenings/ weekends.

So- prep work I would be doing:

Ensuring practice management systems are up to the challenge

Spreading vat quarter distribution/year ends amongst my clients to spread the workload

Thanks (3)
Replying to DJKL:
RLI
By lionofludesch
06th Feb 2017 13:47

DJKL wrote:

Now what strikes me is that July, being the month I always take a holiday (Wife works in a school) is going to be trickier-it has always been difficult juggling, usually I delay going away until circa 12th and cram the 6 June returns in before I go, with further accounts reporting this is not going to be funny if , say, I was still working a five day week at the day job, there are only so many evenings/ weekends.

Or you could emigrate to Berwick - then your wife would still be working in July.

Thanks (0)
Replying to lionofludesch:
paddle steamer
By DJKL
06th Feb 2017 14:56

Has crossed my mind , not for that reason but instead to get myself outwith the reaches of the Scottish tax system.

It also has the bonus of being a shorter drive to The Stadium of Light, ever the optimist we have got tickets for the Man City game in March; well the Chelsea game last season had a miracle so anything is possible!!

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By TinaPS
06th Feb 2017 11:39

Yes - I think it is a benefit that so many of our clients are technophobes... but managing our workflow is going to be crucial & challenging!

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By feelingthestrain
06th Feb 2017 12:39

They did indeed propose that updates should be "at least quarterly" and I read that as thinking, fine I want our clients to instruct us every other month.

But reading some small print in the last consultation I read that the quarterly filing window would open 10 days before the quarter end which suggests that the quarter end is a rigid date e.g. you can't submit at month 2, 5, 7, 9, 12

My suggestion which I would love to get picked up and grow wings (and I put it into my consultation responses but alas.....) was that you would have a quarter to submit the quarters records. That would allow us a proper period of time to prepare/file proper submissions to the benefit of every single stakeholder in the process.

That would apply to any business outside of the audit thresholds.

With a 10 month window to file the annual year end declaration then what would the problem be - unless HMRC only want penalties.

Unfortunately the above idea is only mine and not HMRC's so let the grey clouds return.........

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Replying to feelingthestrain:
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By TinaPS
06th Feb 2017 13:33

sounds like a great idea to me!

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By GW
06th Feb 2017 13:35

Who knows what it will mean in practice, we don't actually know what records are required to be kept electronically as this is to be defined in the regulations that we haven't seen.
Also we know it will only apply to clients with turnover over an unknown amount that is at least £10,000
Presumably for smaller clients it is not going to change the current one a year workload, but who knows what HMRC and the software companies are discussing between themselves.

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By bernard michael
06th Feb 2017 14:15

I can see a situation developing where there are a large number of clients who just ignore the filing requirements and pay the fines. Have the fine levels been announced yet?

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Replying to bernard michael:
RLI
By lionofludesch
06th Feb 2017 14:24

I'm sure that's the plan.

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Replying to Tommy Evans:
RLI
By lionofludesch
06th Feb 2017 16:34

Tommy Evans wrote:

The obvious "cosy" relationship between HMRC and selected software suppliers seems rather corrupt to me. I can accept that they need the information in a certain format, but it is totally wrong that HMRC can demand that taxpayers must buy specific software to be able to comply with MTD.

It seems to me that there should be free HMRC software available for taxpayers who cannot afford, or simply don't want to hand money over to some software company.

It also seems to me that logic demands that the threshold for MTD should be the same as that for VAT (when taxpayers usually have to move to "proper" bookkeeping anyway).

Why should a pensioner with a couple of rental properties, a turnover of £12k and a profit of £2k be forced to layout £200 on software, £400 on a laptop, and have to pay £20 for internet access and pay us to teach them how to use it, just to comply with a pointless attempt by HMRC to monitor their finances?

Whoa! Whilst agreeing with the general thrust of your post, they're claiming that there will be free software available.

The quality will no doubt be poor but the price will be right.

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Replying to Tommy Evans:
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By TinaPS
07th Feb 2017 11:24

Yes, we have a number of people that fall into that exact category - pension income and rental properties. But I'm assuming that so long as they give us any paperwork quarterly - we can take care of it quite easily...

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Replying to Tommy Evans:
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By TinaPS
09th Feb 2017 11:19

I'm not sure it is going to equate to 4 times the work.. the majority of our bill is made up from bookkeeping - and there is going to be the same number of annual transactions. Our bills also increase when we are chasing missing paperwork and trying to answer questions that people have long forgotten because it was so long ago.... So long as there is a straightforward and simple quarterly submission with just 3 lines, the only additional time will be the client contact time 4 times a year instead of one... and as transaction will be fresher in people's mind we're hoping we'll save time trying to find answers for old transactions... and save time by encouraging a more proactive approach to their business... no doubt I am missing something though!!

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By bernard michael
07th Feb 2017 11:32

Tina - Yes but they won't and that's going to be the problem

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Replying to bernard michael:
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By TinaPS
09th Feb 2017 11:22

agreed - this will be our challenge... we struggle getting everyone's paperwork by January! We do have a growing number moving over to monthly/quarterly though. We may make that a compulsory aspect of using our service - with a regular direct debit set up - otherwise we're just going to be dealing with everyone's penalties!!

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Replying to TinaPS:
RLI
By lionofludesch
09th Feb 2017 11:38

Work scheduling for me.

I can either get folk to bring their stuff monthly or I might end up with quarterly peaks in my workload.

But ...... we don't know the detail yet, do we ?

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By SXGuy
10th Feb 2017 15:01

There is something which I hadn't thought of till now that could potentionally be the answer. Currently with RTI the requirement is to file an fps on or before payment due date. And as such you can in theory file future fps's early providing the first is prior to the first payment date of the year. So if MTD submissions were allowed in the same way we could take the first 3 months of info and file 4 submissions based on those figures leaving the final 5th to adjust previous figures at year end. I live in hope anyway.

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Replying to Tommy Evans:
By Ruddles
10th Feb 2017 18:44

Or Frankie

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Replying to Tommy Evans:
By Ruddles
13th Feb 2017 09:30

:)

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Replying to Tommy Evans:
By Ruddles
13th Feb 2017 15:02

:)

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Replying to Tommy Evans:
By Ruddles
10th Feb 2017 18:44

.

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By aimsmarkellis
10th Feb 2017 15:36

not knowing what the penalties might be, why not just file £1 each quarter then sort figures as usual for the 5the submission?

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By North East Accountant
13th Feb 2017 08:56

Client with accounts year end of 31/03 who also has a couple of buy to lets.

Acs - quarterly filing for 30/06, 30/09 etc
BTL - quarterly filing for 05/07,05/10 etc

That will be fun with 10 filings per annum.

Where no BTL I suspect a lot of sole traders will change their year end from 5th April to 31st March delaying start of MTD from 6th April 2018 to 1st April 2019.

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Replying to North East Accountant:
RLI
By lionofludesch
13th Feb 2017 11:06

31 March might not be good enough. We don't know the legislation yet. February should be grand though.

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