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Is this the MTD effect?

Flurry of sole trader prospects who were previously DIY filers.

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Other than a few CIS lads who work for a larger client I do not have any sole traders as clients. I did not set out to avoid them it just seems to have happened.

However since the start of the new tax year I have been contacted by 11 prospects who are all sole traders, so quite small but some who are IFA's and a mortgage advisor etc. They were all previously DIY filers. Their reason for contacting me ranged from cannot be bothered to do their own books or worried they were not doing it right, most asked should you be using an app or software for record keeping and could I help them with that..

Is this the MTD effect pushing people into compliance. I had a lot of landlords contact me last year as they did not understand the new interest rules and for what costs to get the returns done they preferred just to pay for the piece of mind.

In NZ and OZ when digital tax came in there 5 years or so ago, it pushed a lot of people towards accounting firms to deal with it, and not hasten the demise of our industry as many doom merchants are predicting.

Just wondered has anyone else started to see people wake up and start to take action.

 

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By Roland195
28th May 2019 12:12

I am always a bit wary of these sort of cases. If they have been happily preparing & filing their own returns for years, why are they suddenly overcome by the need to pay me to do it? My experience has been they have "calculated" a higher liability than normal, perhaps requiring payments on account and now suspect that I may be able to lower that figure as they are obviously getting it wrong however more often than not, by the time I have corrected the various errors - private use adjustments, disallowable costs, WIP etc then they actually owe more. Unless they are the sort that values peace of mind they will not be thrilled by this and if they were that sort, they would likely have engaged an accountant from the outset.

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Jennifer Adams
By Jennifer Adams
28th May 2019 19:03

I blame Quickbooks - their adverts are everywhere and persuade taxpayers that its easy and then they find out that it isnt

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By johnhemming
28th May 2019 19:29

I don't myself think that all the changes due under MTD (for Vat) will happen during the first mandatory stagger. For many taxpayers it is more complicated than they expect and cloud accounting is also not that simple.

I am also expecting quite a bit of churn in the MTD software market.

I am not surprised some people are taking a simple approach of paying away the problem. I would be careful, however, and not assume that everyone who does this today will continue doing it in two years time.

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By Agility
31st May 2019 11:24

This is an interesting point, automation is great but you still need an expert on hand to set it up correctly in the first place.

I wonder if MTD for IT would have similar repercussions....

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