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)
Please login or register to join the discussion.
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"? 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.
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.
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.
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.
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).
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.
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).