Share this content
0
1167

Making Tax Digital - a disaster in the making?

Sole Practicioner - How is this possible

I have 40 clients, including 4 over the VAT threshold. Most earn under £20000. If I understand correctly all tax payers will be caught in this net by April 2020. From that year I will be working on the previous year's accounts usually doing 4 every month. I am well into reirement with a disability. How on earth I am supposed too be working on the previous year and the current quarter, and believe it or not have 40 clients submitted wiithin 30 days of the end of that first quarter? I charge cliients once per year, so do I have to charge them every quarter. It is hard to get clients to come round once a year at the moment. This will kill my small business.

Have complained to my local MP about this, and it seems that just because some tax payers cannot account properly for their tax, then everyone else that does must pay the price too. This is dictatorship in that it should be subject to parliamentary scrutiny and approval before finalised, not left to HMRC throwing their weight around. I just cannot see this working at all. Why should a hairdressor earning £15000 find this beneficial god only knows. It will put up costs too. Only larger firms will be able to manage this peice of nonsense. Particularly with Brexit going on. Then you know what it is like trying to contact HMRC about problems arising, you can never get through on their lines, and if you do you get brushed off. I see nothing but chaos ahead. Anyone else have this sense of foreboding?

 

 

Replies

Please login or register to join the discussion.

26th Apr 2018 16:14

Eh?

MTD is a dead for sub-VAT companies (well unless you are a software salesman lying through your teeth)

For VAT registered companies, you just have to buy some software, dump your clients totals for the quarter in, press the magic button, and they can carry on as now.

Thanks (0)
to ireallyshouldknowthisbut
27th Apr 2018 11:11

What you dump in to your MTD compatible software at the end of the quarter is not the totals, it's every single individual transaction. Which is slightly more onerous, particularly if they're on paper.

Thanks (0)
26th Apr 2018 16:31

MTD is a godsend for the Government.

Costs them nothing and leads to massive penalty opportunities.

It's win-win.

Thanks (0)
avatar
26th Apr 2018 17:07

I can completely understand where the OP is coming from.

We've got MTD for VAT April 19 on.
MTD for Tax April 20 on.

It's only a matter of time before it incorporates all businesses.

And it's not as simple as dumping figures into software. All needs to be done once a quarter and within 30 days. If client takes two weeks to get the information through that just leaves two weeks to get it done. So four times a year we are expected to do the work in probably a two week time span that in the past we've done in 9/10 months.

Thanks (0)
to Wanderer
26th Apr 2018 17:20

MTD for VAT MIGHT happen from April 2019

it might not. The only requirement is the final yard is in 3rd party software not HMRC. On the ground you can do the same bookkeeping as now, its just the final totals are processed differently.

As for for tax, in the unlikely event they get that working in time, you just chuck some rubbish data at them each quarter and do a proper return as a Q5 by 31st Jan, same as now. Its nonsense to suggest you need to do 4 year ends.

Thanks (0)
avatar
to ireallyshouldknowthisbut
26th Apr 2018 17:27

Appreciate that there are a lot of mights.

BUT if it does come in I think it is naive to suggest that we'll get away with rubbish data x 4 then a proper return. I believe that there will HAVE to be some proper transactional postings 4 times a year.

Thanks (1)
to Wanderer
26th Apr 2018 17:54

You believe away.

HMRC can huff and puff, but they collect taxes not quarterly data.

if they try and start looking at it they will quickly realise its a fools errand to look at raw cashflow data.

Thanks (0)
avatar
By SXGuy
to Wanderer
27th Apr 2018 10:54

Hmrc have already said they will not hold anyone to the quartly figures submitted and can be amended at any point through the year. So in theory it's unlikely for now that it would mean much to submit for example 4 quarters of last years totals and correct adjustments in q5.

On a personal level I can't see it happening. Probably will for vat and maybe even Ltd but for the sole trader lol just think of how logistically impossible that is. Most don't even know about it for a start.

Thanks (0)
to SXGuy
28th Apr 2018 10:00

It's another British Road Services.

Thanks (0)
avatar
By ClareH
26th Apr 2018 17:19

Hi,
This might clarify some details for you Tony.

https://www.gov.uk/government/publications/making-tax-digital-changing-t...

Thanks (0)
26th Apr 2018 17:19

I'm still grimly thinking 'opportunity'. Either clients, like some accountants, will think, 'I can't be doing with this' and pass it over or there will be more demand to fix a mess they have made for themselves.

Come on, it really will be like that. Just as it was for VAT flat rate scheme and RTI.

Thanks (0)
By puzzel
27th Apr 2018 00:12

But is not MTD4VAT the same information that we have done for many a year, just a different portal?

Thanks (0)
to puzzel
27th Apr 2018 08:09

Even if it is, it's a helluva change of portal.

Thanks (0)
to puzzel
27th Apr 2018 09:18

Broadly, yes

the data is not linked in any way to the self assessment tax return or (more likely for VAT) limited company returns.

Thanks (0)
27th Apr 2018 09:47

Some practitioners will cope with the changes. Some won't. The former will prosper. The latter will whither and die.

I can't see that whinging about it does anything other than plant you firmly in the latter category.

Thanks (2)
avatar
27th Apr 2018 09:57

Don't forget it's the client's responsibility to provide the information in time for us to submit under MTD. It is they that will be penalised not us. Is there not too much angst about the poor clients

Thanks (0)
27th Apr 2018 13:04

Have you been asleep for the last 18 months there are dozens of posts making the same point!
MTD is happening without doubt and eventually it will include the quarterly accounts that HMRC originally wanted. No widespread publicity about MTD yet which is telling but not surprising given the delicate political position at present - we may not like it many clients may not like it but it has to happen given how much HMRC have spent on this otherwise somebody is going to get a huge wrap across the knuckles for wasting public money.

Thanks (0)
avatar
to paulgrca.net
27th Apr 2018 13:29

Yes, and when have HMRC, M O D and other agencies ever worried about wasting public money on projects which got cancelled.

Thanks (0)
avatar
to paulgrca.net
27th Apr 2018 13:29

Yes, and when have HMRC, M O D and other agencies ever worried about wasting public money on projects which got cancelled.

Thanks (0)
avatar
to paulgrca.net
27th Apr 2018 13:29

Yes, and when have HMRC, M O D and other agencies ever worried about wasting public money on projects which got cancelled.

Thanks (0)
By Tornado
27th Apr 2018 13:25

From the Link provided by ClareH -

"Transitional costs may be lower for businesses already using digital tools. For those businesses that have limited existing digital capability and/or need to purchase hardware, costs may be higher. HMRC anticipates that a significant majority of businesses with a turnover in excess of the VAT threshold will already have the necessary digital tools to operate Making Tax Digital. The estimated transitional cost to the mandated population of 1.2m businesses is £131m with these costs potentially eligible for full tax relief."

Total transitional cost = £109.16 per business ?

It is this sort of nonsense that makes HMRC look like idiots, but we should not forget the tax relief on this cost which will be worth the effort of course.

Thanks (0)
27th Apr 2018 13:25

You are looking after the client group that will be the potential problem group for mTD.

You either need to get better clients or work out a way you can service the ones you have without passing on massive costs, or they will go to someone who can.

This has been around now for a while so is nothing new.

If you have simple clients you deal with once a year its not rocket science to come up with a system that will work on a 4 times a year basis. Whether it be a simple spreadsheet template you convert into something that will file with MTD or something similar.

Complaining to your MP is simply wasting time as with wars, Brexit and other things they are not interested in the problems this might bring.

Have you thought of selling your fees?

Thanks (1)
27th Apr 2018 13:49

MTD - can't wait - bring it on!!!

Thanks (0)
avatar
By ABS2
to Kent accountant
27th Apr 2018 22:42

Are you into self-flagellation too?

Thanks (0)
to ABS2
28th Apr 2018 10:18

Kent's well known for taking every opportunity to fleece his clients.

Thanks (0)
to lionofludesch
28th Apr 2018 12:57

That’s a tad harsh and out of order.

Seeking opportunity out of the madness that is MtD should be the focus on everyone’s mind

Grumbling about it because you to change your business to suit will get you the square route of [***] all.

Thanks (0)
to Glennzy
28th Apr 2018 17:31

You're entitled to your view, Glenn, but there we have a fundamental philosophical disagreement. I'm not here to screw every last penny out of my clients. Much of this MTD work is pointless.

Thanks (1)
to lionofludesch
28th Apr 2018 15:43

Who is looking to screw every penny out of their clients?

I have set up my practice aware that MTD was on the horizon so it won’t be a big deal when it happens

I don’t see it as a gravy train I don’t think I will have to pass on more than a marginal increase onto clients to deal with the extra work

The opportunity is taking work from other accountants who are not on top of the process, don’t have systems to deal with it and have not embraced technology to keep pace yet charge large fees as they are charging hourly rates.

Too me these are the people who have been fleecing clients for years but are now about to be found out

Thanks (0)
to Glennzy
28th Apr 2018 17:34

Interesting views.

Thanks (0)
to lionofludesch
23rd May 2018 19:50

Yep, probably explains the glowing testimonials on my website and LinkedIn profile.

Then again that might be due to excellent customer service.

I could always change and be a stick in the mud accountant using 1990’s practices.

#modern accountant

Thanks (1)
By DJKL
to Kent accountant
23rd May 2018 20:00

1980s if you don't mind and likely there are a few others on here with 1970s or maybe even the odd 1960s

Thanks (1)
to Kent accountant
23rd May 2018 20:11

Kent accountant wrote:

Yep, probably explains the glowing testimonials on my website and LinkedIn profile.

Then again that might be due to excellent customer service.

I could always change and be a stick in the mud accountant using 1990’s practices.

#modern accountant

I take it your interweb's been down for the last month.

Thanks (0)
Share this content