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MTD and your Retirement plans - a survey (3)

Option 3: Keep going and seek growth opportunities (even if how isn't immediately obvious)

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This is NOT intended to be yet another post for moaning about the (im)practicalities of MTD, but is posted because I've been surprised by the frequency with which Aweb members are threatening to avoid involvement with MTD by the simple expediency of some combination of ... selling their practice / ceasing to trade or retiring / 'sacking' current clients / or more extreme measures (like emigrating).

The surprise lies not in the angst and stress of those contemplating an uncertain future, but in the apparent belief that this is an affordable personal solution (rather than just a cri de coeur before knuckling down, as so often before, to dealing with the mess imposed by the political classes on your clients - the taxpayer).

So I thought I'd post the same thing 3 times ... with 3 different options:

* Option 1: Accelerate your intention to retire (or wind-down provision of services)

* Option 2: Reduce your practice to size your resources can service (despite impact on profits)

* Option 3: Keep going and seek growth opportunities (even if how isn't immediately obvious)

I'm hoping you can 'register a vote' for one of those 3 options ... either by posting in the usual way but only under the appropriate Option thread, or (if you prefer to preserve anonymity even of your avatar) by selecting 'Like' for the appropriate Option.

It's not a Referendum let alone an Election, but the voting pattern may help to clarify the plans of the majority - not just those of us who are already retired or were planning it shortly irrespective of MTD!

Replies (19)

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By PennyPincher
04th Aug 2021 05:53

One vote for this - I’m 29 so don’t have the option of retirement.

Fully intend to make more money from this opportunity instead.

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By jonharris999
04th Aug 2021 06:46

+1, even though 29 is a while ago...

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By sanone
04th Aug 2021 07:41

I'm in for this, MTD is just another challenge which we all should if willing be able to deal with. It won't be easy (life never is) but we're professionals at dealing with this sort of thing.......................... is it really beyond us????

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By SXGuy
04th Aug 2021 07:46

While I do dread the logistics of it, I do intend to try and use it as a way of increasing fees. I think with all the accountants who are considering retirement, letting go clients or changing their type of service, we may find we pick up quite a bit of new work.

And if the fees justify it, I'll employ a junior to handle all the chasing.

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By bernard michael
04th Aug 2021 09:36

Option 3 but will incorporate a lot of small clients (they don't know yet but will probably do as I tell/advise them)

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Replying to bernard michael:
By ireallyshouldknowthisbut
04th Aug 2021 10:13

@Bernard, I agree it really tips the balance towards incorporation for many sole traders we currently wouldn't do that with as the fees will become inverse - more expensive to be a non-VAT registered sole trader with multiple filing points than a small limited company with an annual contact point. The time to pull that over would be when the fines for non-compliance with the new system kick in.

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Replying to ireallyshouldknowthisbut:
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By Paul Crowley
04th Aug 2021 11:38

Agree same
But I have a lot of tiny jobs where client will not cope and my fees would be seriously increased.
I had thought of incorporation but only worthy on reasonable size clients.
On mine that would be probably 20

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Replying to ireallyshouldknowthisbut:
Kitten
By Hazel Accounts
06th Aug 2021 10:29

Surely MTD for Corporation Tax will follow at some point........

Also corp tax rates are going up - I know it's not for small companies at the moment but who knows how whether the tax bill after incorporation of (presumably) taking low salary/dividends will remain favourable.

Also if a client can't keep records will they distiguish between Company money and their own money? Lots of S455's??

There is no easy answer here.

BTW I'm also a bit too young to retire but I don't have too many sole traders (although quite a few landlords which I need to review rent levels of) and I will be encouraging them to use one of the cloud software packages and/or my book-keeper is going to become a lot busier!

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Replying to bernard michael:
ALISK
By atleastisoundknowledgable...
05th Aug 2021 23:04

Hadn’t really thought of this, but a good idea. We only (purposely) have a handful of sole traders, about 5.

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paddle steamer
By DJKL
04th Aug 2021 10:24

I cannot vote because I have already executed, but one of the main the reasons I packed up my part time practice early in 2019, age 59, was the whole MTD programme that was approaching (in my case I jumped before the vat part)

Now solely working in industry I still have to deal with it, but that is reasonably possible as I have full responsibility for the book keeping of the various entities within our group - my reservations were more concerned with the herding cat implications of persuading clients to timeously conform/produce records that were acceptable.

I wish you all good luck

(And, the secret of being able to retire earlier, should you so choose, start contributing regularly into your pension, as young as possible ,and slowly increase the contribution every year as you never notice the increase (my contributions started at age 25 and went up at 10% pa compound)

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Scooby
By gainsborough
04th Aug 2021 12:07

Option 1 unless the threshold for MTD changes or a cheap and easily workable MTD software option becomes available.

All my clients are sole-traders or landlords so I won't have the time to chase for info 5 times a year. I dread to think what some would file if I left it to them. Retirement still many years away (although 29 a long while ago for me too :)).

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Replying to gainsborough:
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By mumpin
05th Aug 2021 19:14

I don't think you read the instructions.

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FirstTab
By FirstTab
05th Aug 2021 21:25

I am too young to retire. Those who do not adapt die.

I have a good life with my small practice because most of the day to day work is delegated.

Nothing stays still. We have to work with what we have.

See the constant changes in NHS. We have it easy.

"MTD and I will retire" Give up. Fair enough. Please pass your clients to me.

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RLI
By lionofludesch
05th Aug 2021 23:48

I would take this option if I was 20 (or more) years younger.

There's going to be a lot of work out there.

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ghm
By TaxTeddy
06th Aug 2021 06:52

My vote is for this option.

Originally, I was incandescent at the sheer stupidity of the HMRC proposals but over time I have adopted a fatalistic viewpoint. This leaves me with two main avenues of approach -

First, I have no intention of forcing any new software or processes onto the clients. I will help them to make choices and adapt where necessary, but it is absolutely their choice.

Second, and most importantly, I have stopped caring. HMRC get something wrong? ....not to worry I'll put it right. The client can't get the information to me on time? .... no problem, we'll deal with it whenever it arrives.

This should have the result that my stress levels will remain in check and, hopefully we might actually make a little more money as a result of all of HMRC's nonsense.

And yes, MTD is totally pointless, badly thought out and all the things that have been discussed here on this forum. But it's amazing how liberating it can be to give a Gallic shrug and simply not care.

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Replying to TaxTeddy:
RLI
By lionofludesch
06th Aug 2021 07:14

TaxTeddy wrote:

And yes, MTD is totally pointless, badly thought out and all the things that have been discussed here on this forum. But it's amazing how liberating it can be to give a Gallic shrug and simply not care.

This.

And don't forget that, ultimately, it's the taxpayer's problem, not yours.

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By bernard michael
06th Aug 2021 10:45

Just a quick question re MTD for landlords

Is landlord property "income £10000 +" gross rent or net after expenses. I assume it's the latter but with HMRC you can never be certain

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Replying to bernard michael:
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By Latinaid
06th Aug 2021 16:00

I asked HMRC this in relation to sole traders) and was told that the £10k refers to turnover not profit - so presumably it's gross rent.

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By legerman
06th Aug 2021 19:36

Sadistically, I'm looking forward to it. I'll probably have to ditch a couple of last minute clients, but I just see it as an extension of the work I do for VAT registered clients.

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