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Making Tax Digital, very confusing.

Making Tax Digital, very confusing.

Dear all, 

I begin to receive promotion calls from those softwares which provide cloud accounting as you know, MTD (making tax digital) is around the corner. Like you, I am a practitioner and I prefer to use desktop accounting software, which is truly designed for professional accountants in practise although I use cloud accounting softwares for some certain clients, But I do think they are slow and designed for non-accountant users. 

Having done some researches regarding this MTD, I think HMRC is: getting rid of their old system (you know how bad and slow it is) and probabaly some staff who know nothing about taxes, trying to collect more tax revenue and more quickly of course rather than once a yeark, and eventually tighten the tax laws to eliminate more tax avoidance ways that professional accountants and tax advisers know. 

On one hand, I fully agree that this country needs to collect more tax revenue and the tax system at the moment is too slow and stupid. On the other hand, I am quite confused and worried about the MTD outcome. For example, with the MTD function, individuals can upload their revenue and expenses and communicate with HMRC, then tax will be calcuated and shown on real time basis for them. This may imply, professional accountants will lose clients. Another example is: MTD declares that you do not need to wait until the end of the year to do tax return, and this may apply to corporation tax eventually. How on earth that corporation tax can be accurately calcuated on quartlery basis, they are only esitamates, there will be lots of adjustments through the year. Let me give you a third example, MTD will only apply to quarterly/monthly VAT return first. I am sure all the bookkeepings have already done by softwares than you submit through software or in your HMRC account online. If there is a VAT audit, they ask you to provide breakdown, but under MTD, they do not accept spreadsheets. Then you can only give them cloud accounting access, is this possilbe and reasonable? 

So far, I have no idea what the MTD will look like and how it will affect us. Please share your opinions here and apologise for being picky. It is however my sincere wish that HMRC can collect more tax from everyone to benifit this country. 

Thank you

Betty

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25th Oct 2017 13:08

HMRC have no idea what MTD will look like either, so you're in good company.

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By Tornado
25th Oct 2017 13:29

At the moment, MTD is about as advanced as our Trade Deal with the EU after Brexit ........ Correction, MTD is nowhere near as advanced as our Trade Deal with the EU after Brexit.

You could search through the hundreds of posts and articles on AWEB to get a better idea of what MTD is about but much of that is now out of date.

I suggest you wait until the Budget on 22nd November 2017 which should contain more information about MTD. I suspect we will only see enabling legislation proposals giving the Government the ability to format the fine detail as they wish, but I think this will be the point at which we will get a better idea of what is actually going to happen in April 2019 and onwards.

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25th Oct 2017 14:34

I wouldn't (and don't!) worry about it at the moment. Concentrate on the 31 December and 31 January deadlines and leave taking a look until next Feb/March.

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25th Oct 2017 14:57

MTD is essentially dead as far as quarterly reporting goes.

Even a chicken runs around for a bit after you chop its head off.

But eventually, it lies down dead in the corner.

It is going to end up by iXBRL, Completely and utterly ignored HMRC end so long as you shove some data down the tube.

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By CJaneH
25th Oct 2017 17:08

I bothered to respond to one of the firms providing cloud book keeping for MTD that could be used by either client or accountant. I was given an on line demo. First problem that they have decided to change the accepted terminology. Expenses meant purchases and would be every thing from credit purchases( ie purchases ledger items) to petty cash. Also Demo by person who had had no book keeping experience so I think thought it would al magically come out in the right places. I gave up!

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By LJCASE
25th Oct 2017 17:35
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26th Oct 2017 09:25

Here is a complete and concise list of everything you need to know about MTD at this time:

1. MTD stands for Making Tax Digital.

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to Tim Vane
26th Oct 2017 10:27

Still?

SA started out as Simplified Assessment, but they changed it when they realised it wasn't simplified.

I still have high hopes that "Digital" will be replaced by "Difficult", or even better, "Dodgy".

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to SteLacca
26th Oct 2017 11:02

SteLacca wrote:

SA started out as Simplified Assessment, but they changed it when they realised it wasn't simplified.


Really? I don't remember that at all. And I still have some of those IR guides from 1995 (the 'Hector the Inspector' ones) that refer to Self Assessment.
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to Wanderer
26th Oct 2017 15:51

Wanderer wrote:

SteLacca wrote:

SA started out as Simplified Assessment, but they changed it when they realised it wasn't simplified.

Really? I don't remember that at all. And I still have some of those IR guides from 1995 (the 'Hector the Inspector' ones) that refer to Self Assessment.

I don't remember it either.

There was summat on the telly recently - Panorama, or summat - where they were saying that self employed folk self assessed their tax and just paid as much as they liked. The implication - to which I took offence - was that they wouldn't pay what they owed.

Well, if HMRC don't like it, they're free to go back to the old system anytime they want to sign on a few thousand more staff.

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26th Oct 2017 16:01

You can relax a bit. With it being in your consciousness at all you are ahead of the game. Just be prepared to pounce if/when the government gives HMRC and all interested parties insufficient time to put something in place. That something is, as yet, indefineable, so there is little to be done until it is clearer.

Just a general appreciation of what is going on in the marketplace will hold you in good stead.

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