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MTD CT

Will MTD CT clients suffer the same issues as MTD ITSA

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We have seen that MTD ITSA was changed just so late in the day to make sure everyone came in on the same day. And a once off take of significant tax.

MTD VAT not the same as dates are still allowed to be spread

But logically that means that all companies will be required to use a 31st March year end date and catch up with those that use the honourable CT tax year. A Massive once off tax take compared to Income tax. I only have 14 Income tax date spead clients, The companies are 50% not in line, including mine.

The income tax payers all make payments on account if tax over £1,000

None of the companies do as they are too small. That will need to change if taxation is intended to be fair

There is precedent for this

Who remembers Boots taking over a pre 1965 company with the huge tax delay as a result?

(A comment for the old codgers amongst us)

Quarterly advance payments do currently exist for the bigger companies, yet no need for MTD to put that in place.

 

If this does not occur (ie HM GOV not wanting to annoy their friends in business) then why foist MTD on the lower income groups?

 

NOTED

No MTD tag but two Receipt Bank tags

Replies (12)

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Stepurhan
By stepurhan
31st Aug 2021 08:36

Quote:
But logically that means that all companies will be required to use a 31st March year end date and catch up with those that use the honourable CT tax year. A Massive once off tax take compared to Income tax. I only have 14 Income tax date spead clients, The companies are 50% not in line, including mine.
Probably too late to amend the OP, but can you revisit this paragraph in the comments please. I don't understand it at all. What is "the honourable CT tax year"? What do you mean by "I only have 14 Income tax date spead clients"?
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Replying to stepurhan:
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By Paul Crowley
31st Aug 2021 09:44

I mean that my income tax clients, self employed traders all use 31 March to 5th April as the year end, except 14.
Those 14 are being made to change so that they join the big bang of MTD
The companies do not. so a big bang MTD will not happen
The corporation tax year is 31 March. Only 50% of my company clients are in line.
If those clients were required to change their accounts years all to 31 March, the CT year, then there would be a measure of equality of treatment.

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Replying to Paul Crowley:
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By I'msorryIhaven'taclue
31st Aug 2021 11:53

There'd be a measure of inequality of work spread: four times a year you'd be busy as a butcher at Christmas; with eight slack months of twiddling your thumbs.

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Replying to I'msorryIhaven'taclue:
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By Richard Cliff
01st Sep 2021 09:06

I'msorryIhaven'taclue wrote:

There'd be a measure of inequality of work spread: four times a year you'd be busy as a butcher at Christmas; with eight slack months of twiddling your thumbs.


I think you are going to be wrong there, 8 slack months of twiddling your thumbs. I freelance for an accountant who is permanently behind with his work, the only good thing in this is I am not picking clients up now and am looking forward to permanent retirement. When MTD for companies comes in I will be 73 and what clients I have left will go to this other accountant.
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By Duggimon
31st Aug 2021 09:11

No, they won't change the tax year rules for companies, company tax years and accounting years are already aligned.

The issue with self employed is that their accounting periods are entirely separate from the tax year, no such separation exists for companies.

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Replying to Duggimon:
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By Paul Crowley
31st Aug 2021 10:23

Critical point
Corp Tax has a filing dealine of 1 year after accounting year end
Self employed person therefore needs a year for there to be equitable treatment in tax.
PAY DAY
Company, nothing until 9 months after year end
Self employed, Payment on account of half liability 4 months after year end, But the other half is actually before the year end.

Companies get a much better deal than the self employed, paying much later and reporting later as well

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Replying to Paul Crowley:
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By I'msorryIhaven'taclue
31st Aug 2021 11:48

High time someone wrote a paper comparing the pros and cons of limited company versus self employed status. The years' of grace between MTD ITSA and MTD CT should swing it, and with any luck make the decision a no-brainer for the average self employed client.

I'm already warming a few sole trader clients to the idea of incorporating. But of course I'd like it to be their decisions, not because I told them to (in case things go awry on the MTD CT front further down the line).

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Replying to I'msorryIhaven'taclue:
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By Paul Crowley
31st Aug 2021 11:52

Agree on proper businesses

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Replying to Paul Crowley:
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By I'msorryIhaven'taclue
31st Aug 2021 12:05

Rightly or wrongly I decided to warm up and get my act together by practising on a couple of one-man-bands.

But you're right, most of the sole traders I have struggle to keep up with the minimal requirements that entails; were they to incorporate, I'd be in danger of having to run their companies for them. That's not to say they'll fare any better at MTD ITSA, and would still need a lot of hand-holding.

It's very much lose / lose.

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Replying to I'msorryIhaven'taclue:
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By Paul Crowley
31st Aug 2021 13:46

Good description of MTD
Lose/Lose

If it was good people would be doing the records already
No need to put a financial pistol to the head

What idiot considers a threat to be good for UK business
I did not say UK PLC for the obvious reason

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Replying to Paul Crowley:
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By I'msorryIhaven'taclue
31st Aug 2021 14:58

It's time to review and overhaul engagement letters, to guard against bad losers.

(I've been reading your other thread, with the entitled Karen and her barrister trying to drum up a case of negligence for your alleged omission. I foresee lots more of this sort of blame-game behaviour from clients, starting next spring).

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ALISK
By atleastisoundknowledgable...
01st Sep 2021 09:21

Paul Crowley wrote:

NOTED

No MTD tag but two Receipt Bank tags

Sounds about right.

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