MTD? Anyone else not sleeping at night?

So, is anyone

Didn't find your answer?

Just like me i'm sure you all have plenty of clients who wouldn't know where to strart with mtd. so what's the answer? Who has time to show them how to use online software? What are we supposed to do? We still get envelopes of invoices. We couldn't enter everyones information every 3 months oursleves. I see house prices in the Shetlands are much cheaper then the south of England. Sell up, clear the mortgage and buy up there? Is that the answer and retire.

Replies (73)

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By SXGuy
12th Aug 2022 11:23

Well what you do is give a quote as to how much it will cost, they either take it or go elsewhere.

My view is, we'll probably lose clients, and any extra fees will make up those we lose, so ultimately will have more work for the same money.

I hope that doesn't happen, ideally I'd like to be in a position where I can afford to pay a junior to do the chasing, basic stuff and leave me to concentrate on the actual work.

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By bluebaron
12th Aug 2022 11:25

It has concerned me greatly in the past, although not so much now...I hardly have any sole trader clients left, and I'm hoping that MTDfIT will be such a disaster that it doesn't get rolled out to limited companies, or the threshold will be raised a lot. Quite a few of my limited clients use software anyway / already doing MTD for VAT themselves, so are used to quarterly filing. Personally I refuse to get involved in it. I wish I had a crystal ball, and knew if it would definitely go ahead according to HMRC's planned timetable, then I could plan accordingly!

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VAT
By Jason Croke
12th Aug 2022 11:27

Assuming MTD ITSA launches as planned, then the client will simply HAVE to adapt.

The same panic and fear happened when VAT returns first went online and you could no longer file VAT returns using the paper forms. Some deregistered for VAT, others argued they were exempt because they had religious intolerance towards computers or their internet wasn't very good, and the rest just accepted the inevitable and either figured it out themselves or paid an Accountant to sort it for them.

A similar experience when payrolls went to RTI and live reporting of payslips.

Appreciate ITSA is different as it involves individuals, but it is what it is. If a client isn't sending you their data every week, then the returns aren't filed and the client gets penalties. A few hundred pound fines every few months and the client will eventually comply.

See it either as an opportunity to charge a decent fee for this or a threat you can do without, and if a threat, just don't offer it as a service, there will be someone who fills the gap in the marketplace, there always is.

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Replying to Jason Croke:
By ireallyshouldknowthisbut
12th Aug 2022 12:03

The difference on the VAT was that it took years to move from 100% paper to 100% online, and by definition it was much bigger businesses.

The issue is not with VAT registered client, its the tiddlers who might have 10 transactions a year where its bonkers as all their figures are on a couple of documents per annum.

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Replying to ireallyshouldknowthisbut:
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By Hugo Fair
12th Aug 2022 13:23

And the differences with RTI:
1. There was a 4-5 year period pre-dating the introduction of RTI when employers were encouraged (indeed directly bribed), but not mandated, to make PAYE EoY returns 'electronically' (what they used to call 'digitally').
2. This meant that by the time of RTI almost no-one was still trying to process payroll without using software.
3. The software developers weren't dependent on APIs being developed by HMRC (just a well controlled specification), let alone hampered by their insistence that 'agile' is more than a management concept.
4. When RTI arrived (on schedule and after a full one year cycle of a Pilot for employers of every size & complexity), its 'file by or before payment' mantra was therefore only an extra step in the processing schedule - at least in theory.

In practice of course HMRC did their best to screuu it up even then ... introducing unnecessary extra data to be collected, and chopping/changing the spec with an alarming frequency (in response to scenarios about which they'd been informed but had chosen to ignore until those caused problems in their own systems).

Both of those may sound familiar to those involved in MTD ITSA ... and without a full specification or an adequate Pilot, the launch is looking under serious threat!

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Replying to Hugo Fair:
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By Paul Crowley
12th Aug 2022 13:40

For PAYE the five years of bribe was a fair way to get the system functioning before mandation
Most of our relevant clients got the lot

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Replying to Jason Croke:
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By Paul Crowley
12th Aug 2022 13:34

All the prior stuff just changed method of delivery.
There is no point or purpose yet established for quarterly income tax returns with less compliance time for submission
Electronic VAT added 7 days, and as prior was paper, that was more like 2 weeks benefit.
This only has an effect on the tiddlers
The rest are registered for VAT or operating companies

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Replying to Paul Crowley:
By ireallyshouldknowthisbut
12th Aug 2022 14:59

The big RTI bribe was very useful, it enabled us to say to the client as a business case we can switch to this new more expensive system (we had to file 12 returns not one for director only PAYE which was previously only completed annually) and it will pay for itself.

It was an easy sell to the client.

It is considerable harder to try and change the clients whole bookkeeping procedure and pay for software, and pay for us to file it, all for no benefit to anyone, HMRC or the client.

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Replying to ireallyshouldknowthisbut:
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By Wanderer
15th Aug 2022 17:44

It wasn't an RTI bribe.

It was (several years of) FBI bribes which predated RTI.

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By K81
12th Aug 2022 11:33

seriously concerned tax department here - we are not involved in VAT in this department. We don't keep spreadsheets & are three women in our fifties who don't even know how to use excel, let alone show clients how to do this!
we have a lot of pensioner clients with rental flats & & they collect the rent in cash each month & write in a little rent book. paper receipts for building work/repairs & insurance are provided. most of these clients don't have smart phones let alone computers. this is life in small seaside resorts!

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By 0098087
12th Aug 2022 11:35

Actually looking at a tie up with Free agent. could be the way to go is to get them to instruct the clients!

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By David Ex
12th Aug 2022 11:41

I think the realities of MTD for many practitioners and clients have been discussed before. It’s when you start thinking what needs to be done that the whole proposal looks unmanageable.

I guess you need to sit down and go through your entire affected client list and categorise. See if any might qualify for the exemption might be a start, although maybe HMRC will resist except in extreme circumstances. Are professional bodies providing any support which could be used to educate clients? As you say, difficult to see how you can carry out 1 to 1 training.

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By cbp99
12th Aug 2022 11:50

One of the key points it seems to me, and unless I've missed it, we still don't know, regards the required level of accuracy of the quarterly returns. (I am not talking about adjustments for accruals/prepayments etc, just completeness of input data.) The feasibility of complying will depend on the degree of latitude that is mandated.

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By 0098087
12th Aug 2022 11:53

I believe the whole things is unworkable, I really do. As has been said, elderly clients with rental properties won't have a clue. Bits of paper being posted etc. I don't really know why it's needed for the level of turnover we are talking about.
How much is the Euromillions tonight? How much can I win on the football pools. Same numbers since 1985, never missed a week and still waiting.

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By ireallyshouldknowthisbut
12th Aug 2022 12:03

I think it will die on its backside before its compulsory. HMRC are only JUST now starting to understand how complex a project this is, and that its utterly pointless too.

Agents are not going to be able to cope, let alone unpresented clients of which there are huge numbers. A lot of small sole traders use bookkeepers and not an accountant in sight.

My tack is to completely ignore the launch (if and when that might be) and see what happens. Under the new penalty regime the first 3 are essentially optional anyhow so that gives 9 months to see where the land lies. Of course clients will need to be informed of their responsibilities, and then they can ask us to file if they want.

In practice it will be a very soft launch no matter how many threats HMRC issue.

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By williams lester accountants
12th Aug 2022 13:13

I just don't get what the issue is, it is the same amount of work, just broken down into smaller pieces at different times of the year. We use Dext & QB/Xero for ALL clients already, so why will it be a massive difference?

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Replying to williams lester accountants:
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By Paul Crowley
12th Aug 2022 13:18

Oddly, I can do a year quicker than 4 quarters and a proper real version 5
You clearly do not take on the small clients that most of us do
How many gardeners do you have with a turnover of £12,000?

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Replying to Paul Crowley:
By williams lester accountants
13th Aug 2022 14:06

Yes, we have small clients, a few dog walkers, gardeners etc who make £10-20k per year.

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Replying to williams lester accountants:
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By Paul Crowley
15th Aug 2022 16:05

But you only accept them if the do the quarterly thing?

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Replying to williams lester accountants:
By ireallyshouldknowthisbut
12th Aug 2022 13:56

Its very much a question of the size of your clients.

I service lot of clients you probably wouldn't take on as they are too small to use Xero/QB, or resent being forced onto it by a firm with your business strategy.

We have picked up a lot of work from a firm down the road who did exactly that. The client said 'no' and jumped, I am sure some of yours left when you imposed your regime.

We also have a lot of landlords who's records are literally 3 or 4 bits of paper a year. Lettings statement, mortgage statement and a couple of random invoices. I can charge them £300-400 for a return, its very profitable when it all goes right, so we do a lot of 'em.

The issue is at the sub-software level. So under (say) 100 transactions per annum. Once you get down to sub 25 transactions its utterly absurd using software.

For those on software its no big deal, they probably already file VAT anyhow.

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Replying to ireallyshouldknowthisbut:
By williams lester accountants
13th Aug 2022 14:07

We have no limits on smallest sized clients, are not losing anyone and just don't get what everyone is finding so difficult.

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Replying to williams lester accountants:
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By 0098087
13th Aug 2022 14:11

You tell
Them they’ll have to pay a monthly fee for software that’s when the fun begins

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Replying to 0098087:
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By legerman
15th Aug 2022 22:13

0098087 wrote:

You tell
Them they’ll have to pay a monthly fee for software that’s when the fun begins

Why the need for software? Excel plus a bridging solution for the simple accounts

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Replying to legerman:
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By 0098087
15th Aug 2022 22:24

Sorry to say they’d have no clue with excel
And who’s going to pay for excel for them.
I know I keep repeating myself but hmrc just don’t see the problems

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Replying to williams lester accountants:
By petersaxton
15th Aug 2022 10:44

Exactly.
Xero have just brought out Xero Go and this would be idea for small clients without many transactions.

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Replying to petersaxton:
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By 0098087
15th Aug 2022 17:47

And the ones who don’t use computers?

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Replying to 0098087:
By petersaxton
16th Aug 2022 08:30

Xero Go is for mobile phones

Cue: "And the one's who dont use mobile phones?"

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Replying to petersaxton:
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By 0098087
16th Aug 2022 08:42

I take your point but we do have a few who may be able to use the phone but not an app

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Replying to petersaxton:
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By 0098087
16th Aug 2022 08:42

I take your point but we do have a few who may be able to use the phone but not an app

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Replying to 0098087:
By petersaxton
16th Aug 2022 09:42

What is wrong with these people?
Apes at the zoo can use apps.

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Replying to petersaxton:
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By 0098087
16th Aug 2022 09:52

Sorry but some people don't want the technology. And all this scan receipts business. I get them emailed and they are a mess. Some people don't have time for it

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Replying to 0098087:
By petersaxton
16th Aug 2022 10:09

I'm sure when they introduced income tax people said "this is too difficult"

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Replying to williams lester accountants:
By petersaxton
15th Aug 2022 10:45

Exactly.
Xero have just brought out Xero Go and this would be idea for small clients without many transactions.

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Replying to williams lester accountants:
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By SXGuy
13th Aug 2022 19:29

Here's a scenario maybe you haven't figured or thought about.

Currently 99% of my client base is yearly clients, I see them once or twice a year. Those 99% tend to spread their appointments across a 6 month period.

10% are last minute type clients.

So, given the above, its quite easy to allocate time for each client to prepare their accounts. I can space the appointments out across those months to suit.

Now let's bring in mtd. 99% of those clients will now need to provide info at least every 3 months with a short window for filing.

My 6 month period is now condensed in to 1 month out of every 3 to get every single clients data.

Now I appreciate we have open banking, however unless the banks catch up you've got the 90 day re authorisation process to do on top of everything else.

Plus I can see someone who turns over a little more than 10k with a handful of receipts having open banking set up is abit over kill. So what else? Spreadsheet and bridging software? OK great, now more time is taken up manually inputting receipts and invoices.

I could go on and on.

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Replying to SXGuy:
By petersaxton
15th Aug 2022 12:14

If the clients provide information every month then only one month of data is needed before the deadline.

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Replying to petersaxton:
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By Paul Crowley
15th Aug 2022 17:26

Good for you
But the issue remains, whether looking for one month or three, filing needed 7 days quicker than the VAT peeps
Your rent people send stuff 12 times a year? Mine choose not to

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Replying to Paul Crowley:
By petersaxton
15th Aug 2022 19:40

Paul Crowley wrote:

Good for you
But the issue remains, whether looking for one month or three, filing needed 7 days quicker than the VAT peeps
Your rent people send stuff 12 times a year? Mine choose not to

Taxpayers may choose to use rent people who choose to send monthly statements rather than risk penalties.

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Replying to petersaxton:
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By 0098087
15th Aug 2022 21:39

And you think they’ll
Provide it every month? You clearly havr different clients to me. I
Am currently having to continually postpone a visit to a pub who’s vat is due this month because his paperwork is not up to date. Should be ready on Monday.

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Replying to 0098087:
By petersaxton
15th Aug 2022 21:48

If they dont give me enough time they will have to pay the penalties.

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Replying to williams lester accountants:
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By 0098087
15th Aug 2022 16:12

Not all clients will want to send info every quarter. sorry, i just don't see the point of all this

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Replying to 0098087:
By petersaxton
15th Aug 2022 17:35

0098087 wrote:

Not all clients will want to send info every quarter. sorry, i just don't see the point of all this

They will when the penalties start to mount up.

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By Paul Crowley
12th Aug 2022 13:13

There is no best solution
I mention the issue to clients that I see
I will deal with the problem when the problem is properly defined, just like so many software sellers
Even IRIS is not yet approved
How can you teach people to operate non-existent software?

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John Toon
By John Toon
12th Aug 2022 13:54

Can't say it's giving me sleepless nights but then none of my clients are affected by it. But I am overseeing the roll out for my peers who have clients affected by MTD for ITSA and again it's not overly worrysome.

We're communicating the impact to clients, we know what technology and processes are required to be in place and we know what our pricing strategy, along with anticipated resource requirement, is going to be.

As for managing the clients who won't come along the journey that's fine they can deal with the penalties if they don't listen to our advice. The ones that don't listen and come back to us late after the party will pay a premium over those that listen and are organised. I'm not worried about the bag and box jobs - I haven't manually entered an invoice or bank statement for over 10 years and frankly if one of our team was doing so I'd bloody kill them for wasting theirs and the firm's time...

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Replying to johnt27:
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By 0098087
16th Aug 2022 09:54

Okay so when you say you haven't manually entered a bank statement for 10 years how are you doing that? Are clients sending them as CSV files or are you using other software to scan them and convert? Most of our clients wouldn't have a clue how to do wither.

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Glenn Martin
By Glenn Martin
12th Aug 2022 14:27

We only have a few sole trade and landlord clients so it won't be a big thing for us, but I also see how using something like Coconut will make it deliverable.

If you take the average Joe caught by this say a taxi driver it is possible to deliver the service at a price that the market will stand.

You will just have to your rules and they will need to be adhered to.

I accept the point about the business making £12k per year and the guy who only puts his paperwork in a bag once a year but they will have to change or move back into employment which I suspect is the main driver for this.

As an accountant you will also have to change if you have loads of sole traders you deal with from carrier bags you will need to change them or they will become a mill stone around your neck.

I gave up worrying about stuff like this a long time ago, ultimately we are paid to fix peoples head aches and HMRC constantly produce head aches for people so we will be around for a while yet.

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Replying to Glennzy:
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By lh3f9764bg1g
19th Aug 2022 12:10

Coconut don't cater for all the banks that we would need them to cover.

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By WhichTyler
12th Aug 2022 14:37

The heating bills in the Shetlands will be significant...

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Replying to WhichTyler:
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By 0098087
12th Aug 2022 14:46

I believe they are self sufficient using the wind

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By bernard michael
13th Aug 2022 10:50

I intend to adopt the following approach
Prepare a draft schedule for the MTD return
The client completes it quarterly and send it to me for transmission to HMRC, which I will do
WITHOUT CHECKING IT.(the client in full cognisance of this)
I will of course do the usual full work on the annual return

Can anyone see anything wrong with this methodology ???

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Replying to bernard michael:
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By Paul Crowley
15th Aug 2022 17:33

Year one I will not even bother with that
Pure guesses will do and fix it later on submission 5
Reason, zero confidence that ANYTHING will be checked cos there will be so many refusniks ad cannotdoniks, even before we look at unrepresented clients

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