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Email from Toni Clark HMRC's 'Head of Digital Engagement'

Email from Toni Clark HMRC's 'Head of Digital...

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I have received an email today from HMRC, and, if I read it correctly, seems to suggest that as from December 2016, Agents cannot file CT600's using HMRC Software?  Is this correct? If so why the sudden change - I cannot see a good reason for this whatsoever in forcing people to pay for Filing Software. And if this is the case which is the easiest and cheapest software to use? I am a sole Practitioner filing approximately two dozen CT600's a year.

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By Cloudcounter
19th Aug 2015 08:33

Sudden?

A year next December?

Yes it is right.  Ask HMRC why.

Look at Taxfiler, from £10 per month for up to 50 returns.

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By DMGbus
19th Aug 2015 08:39

Taxpayer companies to still retain CT600 filing

Since the intention is that companies themselves will still be able to use HMRC's online filing software that is one option - get the client to obtain a GG ID & PW then add a service CT then sit down and file the CT600 online on behalf of the client using client's GG ID & PW.

 

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By bernard michael
19th Aug 2015 10:27

Commercial software cost less than £500 per annum or as said above Taxfiler is even cheaper. I suggest bite the bullet and increase every client's fees by £50

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By accountright
19th Aug 2015 10:32

Why?

Does any one know why they (HMRC) are doing this?  Seems really odd to take something away that actually works quite well.  Saying that, HMRC are not actually taking the software away as Companies will still be able to access it but their Agents won't.  What numpty thought this ruse up then?

Polly

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By Tim Vane
19th Aug 2015 11:24

Hopefully they are doing it because HMRC have realised that they should be spending their IT budget on sorting out their internal systems and not providing free software to commercial organisations.

Personally, I don't see why they should provide it for companies either, there are plenty of commercial offerings that come in at around £25 and providing free software is not a good use of HMRC's resources.

I suspect the plan was always to ease the entry to FBI/XBRL/RTI etc with free software and then phase it out once the commercial alternatives were available. I suspect BPT will be phased out in due course now that there are free alternatives in the sub 9 employee category.

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Replying to Matrix:
By SteveHa
19th Aug 2015 12:36

Make people pay to pay tax

Tim Vane wrote:

Personally, I don't see why they should provide it for companies either, there are plenty of commercial offerings that come in at around £25 and providing free software is not a good use of HMRC's resources.

I'm amazed that you don't believe that a Government department, tasked with ensuring that every individual and company in the country pays the correct amount of tax should not provide free software, since they insist that interaction is done electronically, otherwise they create a mandatory cost, effectively charging people for the privilege of paying tax.

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By Tim Vane
19th Aug 2015 13:17

Personally, I've always been surprised that people think that HMRC should pay for software. By your argument the government should provide free accounting software for all businesses, free tills etc for retail outlets, access to an accountant for preparing tax returns should be paid by the state etc etc. You are basically saying that compliance costs should be bourne by the state, and I am saying that such an assumption is tosh.

My car requires an annual MOT. The government mandates it. By your argument the government should pay for all MOTs.

Accounting for and dealing with taxes (direct and indirect) are a general cost of doing business like electricity, fuel and salaries, and hiding behind the "they make me pay tax so they should bear the costs" argument is specious.

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Replying to Matrix:
RLI
By lionofludesch
19th Aug 2015 14:04

Extrapolation

Tim Vane wrote:

Personally, I've always been surprised that people think that HMRC should pay for software. By your argument the government should provide free accounting software for all businesses, free tills etc for retail outlets, access to an accountant for preparing tax returns should be paid by the state etc etc. You are basically saying that compliance costs should be bourne by the state, and I am saying that such an assumption is tosh.

My car requires an annual MOT. The government mandates it. By your argument the government should pay for all MOTs.

Accounting for and dealing with taxes (direct and indirect) are a general cost of doing business like electricity, fuel and salaries, and hiding behind the "they make me pay tax so they should bear the costs" argument is specious.

What a weird extrapolation of a very reasonable view.

Personally, I recall the public outcry when HMRC stopped sending prepaid envelopes for tax returns.  Why should people pay 6½p for a stamp to send in their tax return ?

Clearly, HMRC intend to continue to provide free software so where is the saving in making it unavailable to agents ?  Makes no sense at all.

The MOT analogy is clearly flawed.  The MOT test fee isn't a tax.  It's a safety check.  What surprises me is that the MOT disappeared almost 50 years ago, leaving behind its test certificate legacy.

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Replying to Matrix:
By SteveHa
19th Aug 2015 15:51

Not what I said

Tim Vane wrote:

You are basically saying that compliance costs should be bourne by the state, and I am saying that such an assumption is tosh.

No, that's not what I'm saying. Access to an accountant is voluntary. Preparing accounts can still be done in manuscript (though I accept filing must be done electronically), but there is no option to file the Tax Return on paper.

What I am saying is that where the state introduces a mandatory requirement, then they should provide the tools for that requirement to be met rather than expect the taxpayer to incur more costs.

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By bluetone
19th Aug 2015 13:32

Better for HMRC if everyone submitted directly to their software

Am I misunderstanding here but isn't it easier for HMRC if we all type straight into their system. If they made everyone use it there would complete consistency in the layouts etc. Or is that what IXBRL gives them? They could even charge us a fee to enter our annual accounts and tax in the same way as Companies House with their annual return. It would be a lot worse for agents with a large number of returns of course, but when has a government department ever worried about that?

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By accountright
19th Aug 2015 13:43

as I said - why?

the software will still be there - albeit only available to Limited Companies but not their Agents - Why?  They (HMRC) will still incur costs of running and maintaining it regardless
 

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Replying to stepurhan:
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By BananaMan
19th Aug 2015 16:06

It makes perfect sense!

accountright wrote:

the software will still be there - albeit only available to Limited Companies but not their Agents - Why?  They (HMRC) will still incur costs of running and maintaining it regardless
 

 

Because, please tell me if I'm incorrect in this assumption, you are charging people for submission of a CT600. Yet, you are 100% relying on HMRC's [FREE] software. Why not provide your clients a free service in the same manner as the software? Didn't think so.

 

So, I guess your actual question is "Why do they seek to suppress my margins?" That's just purely business

 

And, let's be honest, clients can (and will) do their returns wrong - so they'll probably need the pieces picking up anyway.

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Replying to abelljms:
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By lionofludesch
19th Aug 2015 16:32

You are incorrect in this assumption

BananaMan wrote:

Because, please tell me if I'm incorrect in this assumption, you are charging people for submission of a CT600. Yet, you are 100% relying on HMRC's [FREE] software. Why not provide your clients a free service in the same manner as the software? Didn't think so.

No, I charge for my time in completing the CT600.  Now I'll be charging them for the software and the training time I'll need to learn to use it properly.

So ...... extra costs for hard-pressed small businesses. Saving the Government .... er, well ..... nothing.  Well done HMG.

So when is this red tape cutting for small businesses going to happen ?

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Replying to rememberscarborough:
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By BananaMan
19th Aug 2015 16:45

.

lionofludesch wrote:

BananaMan wrote:

Because, please tell me if I'm incorrect in this assumption, you are charging people for submission of a CT600. Yet, you are 100% relying on HMRC's [FREE] software. Why not provide your clients a free service in the same manner as the software? Didn't think so.

No, I charge for my time in completing the CT600.  Now I'll be charging them for the software and the training time I'll need to learn to use it properly.

So ...... extra costs for hard-pressed small businesses. Saving the Government .... er, well ..... nothing.  Well done HMG.

So when is this red tape cutting for small businesses going to happen ?

 

But, you are making a buck off the back of a freebie provided to you by HMRC whichever way you look at it, are you not?

 

Company directors, where they choose to file themselves, are not making a buck off the back of the software - they are, in fact, saving a buck.

 

Perhaps the point isn't to penalise the client - but, rather make them learn and take responsibility for their own returns, should they choose to file it themselves? Where they don't file it themselves and they contract a professional to do so - maybe they rightly have to bear the cost of that?

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Replying to memyself-eye:
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By lionofludesch
19th Aug 2015 16:59

Never heard such nonsense

BananaMan wrote:

But, you are making a buck off the back of a freebie provided to you by HMRC whichever way you look at it, are you not?

So, when we filed on paper, we were all making a buck of the back of HMRC's printing costs ?

We've had some crazy posts today.........

Quote:

Company directors, where they choose to file themselves, are not making a buck off the back of the software - they are, in fact, saving a buck.

Perhaps the point isn't to penalise the client - but, rather make them learn and take responsibility for their own returns, should they choose to file it themselves? Where they don't file it themselves and they contract a professional to do so - maybe they rightly have to bear the cost of that?

Maybe the point is to get the client to complete his own return then charge him penalties for getting it wrong ...  we'll just never know, will we ?

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RLI
By lionofludesch
19th Aug 2015 17:11

The Old Days

BananaMan wrote:

lionofludesch wrote:

So, when we filed on paper, we were all making a buck of the back of HMRC's printing costs ?

Not when you print them yourself!.. 

You must be a young person.

You may be surprised to know that there haven't always been computers.

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By Michael C Feltham
19th Aug 2015 13:51

Suggestion:

The cheapest - sensible - route for CT600 filing is I believe, FTax.

Then use Brankin Software to tag with the iXBRL taxonomy @£12 a pop.

Bit clunky as they use an Excel-based templated accounts solution which takes a bit of understanding and is, understandably, a "One Size Fits All" solution.

Which is now well outside the requirements of the latest Micro-Enterprise reporting requirements.

We are this year shifting to VT Accounts since this integrates nicely with FTax.

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By DMGbus
19th Aug 2015 13:51

iXBRL = reason for HMRC to provide software

In my experience XBRL computer language is alien to / never used by small businesses.

It is a computer reporting language of multi-nationals.

HMRC were probably advised by a multi-national company to implement XBRL.

It follows that HMRC should provide the  appropriate software.

 

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By Michael C Feltham
19th Aug 2015 14:09

Actually.............

XBRL (Extensible Business Reporting Language) is a global standard. And applies to ALL business whatever their size.

HMRC of course had to be different: and insist upon iXBRL................

Since Microsoft supports XBRL http://www.microsoft.com/en-us/download/details.aspx?id=8872  ........

Oh how much easier it would have been to use say Excel produced tagged taxonomies.

What's the difference?

http://www.datatracks.co.uk/ixbrl-blog/what-is-ixbrl/

 

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By accountright
19th Aug 2015 16:21

nit picking now!

Nothing to do with suppressing margins.  We will pass the cost on to the client anyway.  As far as I can see there is no benefit to HMRC removing this service for Agents and that is my argument.

Polly

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Replying to gerrysims:
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By BananaMan
19th Aug 2015 16:26

.

accountright wrote:

Nothing to do with suppressing margins.  We will pass the cost on to the client anyway.  As far as I can see there is no benefit to HMRC removing this service for Agents and that is my argument.

Polly

 

So if they'd said "agents now have to subscribe at £20/mth" that would be acceptable to you? Because, well, you are going to pass on the cost anyway

 

Or would it just be another thing they did that upset you?

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Replying to AccountancyManager:
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By lionofludesch
19th Aug 2015 16:38

Costs

BananaMan wrote:

So if they'd said "agents now have to subscribe at £20/mth" that would be acceptable to you? Because, well, you are going to pass on the cost anyway

In your sarcasm, you've hit on the point.

It's another pointless cost to the small business, not to we accountants.

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By accountright
19th Aug 2015 16:37

upset! me?

I'm definitely not upset Mr BananaMan, but I think you have missed my point.  If it aint broke - don't fix it.  Why would HMRC want to let Companies use this software and not Agents?  it's there, it works, what do they hope to gain by excluding Agents?

 

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By mrme89
19th Aug 2015 16:39

I disagree with Tim’s

I disagree with Tim’s analysis.

 

If the government insisted on MOT certificates being filed by the owner of the vehicle in an obscure electronic format that you needed commercial software for, there would be outrage across the country.

If they want to receive the data in a set format, there should be assistant to provide it in that format.

 

However, I don’t think people holding themselves out to the public as accountants should be using the awful HMRC software. There are much better alternatives at a low price such as Tax Filer. Do the same people still use excel for bookkeeping and accounts production?

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RLI
By lionofludesch
19th Aug 2015 16:41

A smarter move

What would be a smarter move would be to make a punitive charge to companies filing their own CT600, judging from the queries we get on this forum.

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Replying to Ivor Windybottom:
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By BananaMan
19th Aug 2015 16:46

.

lionofludesch wrote:

What would be a smarter move would be to make a punitive charge to companies filing their own CT600, judging from the queries we get on this forum.

 

They will - they're called penalties and there will be a whole raft of them!! (I can't do a crying with laughter face on here)

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By adam.arca
19th Aug 2015 23:10

Well, I actually agree with Tim and BananaMan
Nor do I see what's wrong with Tim's argument or his analogy.

At the end of the day, HMG is in the business of telling us mere mortals what it wants; it isn't (or shouldn't be) in the business of providing the means to do that as, in a free market, that is what the market determines and that is what middlemen (accountants in this case) are for.

It does seem a bit odd to retain the CT software for punters but not for agents but that is probably the political imperative these days not to be seen to be nasty to the downtrodden masses, regardless of the myriad unseen ways that they are very nasty indeed, plus I would agree with Tim that this will get phased out down the line anyway.

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Replying to pausten:
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By Michael C Feltham
20th Aug 2015 14:07

A Given?

adam.arca wrote:
I would agree with Tim that this will get phased out down the line anyway.

Since Osborne announced (Summer Budget Statement) his intention to dispense with tax returns, shortly, I feel this is someting of a given.......

 

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Replying to Pukka:
RLI
By lionofludesch
20th Aug 2015 14:24

Windscale Approach

Michael C Feltham wrote:

adam.arca wrote:
I would agree with Tim that this will get phased out down the line anyway.

Since Osborne announced (Summer Budget Statement) his intention to dispense with tax returns, shortly, I feel this is someting of a given.......

I thought we agreed that we were just going to call them something else.

I'd be interested to see how they'll prepopulate Corporation Tax records from Companies House records that don't even have a P+L account.

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Replying to DJKL:
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By Michael C Feltham
21st Aug 2015 14:26

An Interesting Thought!

quote=lionofludesch]

Michael C Feltham wrote:

adam.arca wrote:
I would agree with Tim that this will get phased out down the line anyway.

Since Osborne announced (Summer Budget Statement) his intention to dispense with tax returns, shortly, I feel this is someting of a given.......

Quote:
I thought we agreed that we were just going to call them something else.

I'd be interested to see how they'll prepopulate Corporation Tax records from Companies House records that don't even have a P+L account.

Since a majority of close companies are Micro-Enterprises......

Quote:

"• In 2014, there were 5.2 million businesses in the UK.
• Over 99% of businesses are Small or Medium Sized businesses – employing 0-249 people
• 5.0 million (96%) businesses were micro-businesses – employing 0-9 people. Micro-businesses accounted for 33% of employment and 19% of turnover."

Source: www.parliament.uk/briefing-papers/sn06152.pdf

I fail to see how HMRC can demand more information than must be carried under the new regime of GAAP, under FRSSE

Now that's an interesting thought!

 

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By davehome
21st Aug 2015 10:48

no work to do?
Obviously a quiet time of the year if you have time to waste on all this.

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Replying to matthew pennifold:
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By keithas
21st Aug 2015 13:05

Irony

davehome wrote:
Obviously a quiet time of the year if you have time to waste on all this.

I love irony.

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By pauljohnston
21st Aug 2015 11:33

My view

For what it is worth HMRC should not provide any filing software because in the end we the taxpayers have to pay for it and HMRC are notorious for overspending on IT.

SElf-Assessment soft ware can be bought for around £35 plus Vat.  My solution would be to allow anyone with taxable income of less than £20,000 an extra deduction on filing of £40 (ie reduce the tax bill) to cover the cost.

A similar situation should work for CT Returns.

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By Tim Vane
21st Aug 2015 11:49

How does a deduction of £40

How does a deduction of £40 cover the cost of £35 software? If the taxable income is less than £20,000 then the deduction of £40 would only cover the cost of software of about £8.

EDIT - sorry on re-reading your post it seems you mean a tax reduction of £40, so this would be like a tax credit then? Fair enough.

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David Ross
By davidross
21st Aug 2015 12:20

Getting a proper answer on this

I have sent the following email to [email protected]
 

"CATO (Company Accounts and Tax Online)

I have had a disturbing email from your Toni Clark, in which she says that “Agents will not be able to use this service on behalf of their clients”. I have spoken to Toni who suggested I write this email. 

I have become used to filing Company Accounts and CT600s using the existing pdf based service and have invested considerable time and effort in making my systems supply me with the information required by it. My experience of commercial software is that it is clunky by comparison (and of course, costly). The cheaper the service I was to choose, the more I would have to get involved in creating ixbrl documents and that seems an unreasonable imposition. Why should I be made to learn to use a complex computer language that is familiar only to software developers in the corporate world? I should appreciate an insight into why this decision has been made - is it driven by practicality or is it just a whim? If there is no good reason for leaving CATO out of the Agent Portal, please reconsider (many accountants posting on AccountingWeb will clearly support my request)" 
  Perhaps other AccountingWeb members might email the same address with their support for my request?

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By cheekychappy
21st Aug 2015 12:22

Hahahahahaha

Commercial software is clunky, and HMRC is better?

 

What are you smoking?

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By ming_the_reasonable
21st Aug 2015 13:00

Wrong argument
I really don't think saying commercial software is clunky will wash since I expect that considerably more CT returns are filed using it than without. I see more threads on here about what software to use, few recommend HMRC and every firm I've worked for since 1997, small and big, has used something. So I wouldn't be surprised if it was a really high percentage.

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By wrilliams
21st Aug 2015 16:37

Tax Returns

Ah - remember the old days.  HMRC used to send out paper Tax Returns.  The taxpayer would pass it to the accountant who would fill it in and get the client to sign it.  It would then be sent back to HMRC by post.  HMRC would hire an army of staff to process the details manually onto their system with the potential for making transcription mistakes.  Would you believe it, some bright spark said "I know, we can get the taxpayer to do this job for us and get rid of lots of our clerical staff at the same time".  Only one problem, how do they get the taxpaying public to co-operate?  Well better give them the means to do this so they don't kick up a fuss about having to pay for the "service" they used to receive from HMRC.  How about free filing software?

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RLI
By lionofludesch
22nd Aug 2015 09:54

CT600

The return form hasn't changed much.  Still looks pretty much the same as it did 20 years ago.

What's changed is the need to submit accounts in iXBRL format instead of on a dozen sheets of A4.

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By Gone Sailing
23rd Aug 2015 15:56

iXBRL Accounts

On a parallel thread, someone suggested that ME Accounts could be filed with Taxfiler, but I don't see it on the website.

So which are the cheapest and unclunkiest software that will replace the CT600.pdf in one go and online for sole practitioners?

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By Tim Vane
23rd Aug 2015 16:03

Taxfiler only supports the FRSSE in the current release. An update for ME accounts is expected shortly.

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