MTD for ITSA...some better news at last

MTD for ITSA...some better news at last Treasury statement today

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https://questions-statements.parliament.uk/written-statements/detail/202...

"The government understands businesses and self-employed individuals are currently facing a challenging economic environment, and that the transition to MTD for ITSA represents a significant change for taxpayers, their agents, and for HMRC.

That means it is right to take the time needed to work together to maximise those benefits of MTD for small business by implementing gradually.

The government is therefore announcing more time to prepare, so that all businesses, self-employed individuals, and landlords within scope of MTD for Income Tax, but particularly those with the smallest incomes, can adapt to the new ways of working.

The mandation of MTD for ITSA will now be introduced from April 2026, with businesses, self-employed individuals, and landlords with income over £50,000 mandated to join first.

Those with income over £30,000 will be mandated from April 2027."

 

I might just about be able to retire first!!

Replies (40)

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By User deleted
19th Dec 2022 14:25

Typical political speak and not admitting they can't produce the system!!!

Keep on pushing it back HMRC, it's getting nearer to my retirement date!

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By CJaneH
19th Dec 2022 14:32

Having already decided to retire and in process of transferring clients to new accountants I could have had a couple more years!!!

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Replying to CJaneH:
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By meadowsaw227
20th Dec 2022 10:15

I am in exactly the same position and am going through the massive due diligence exercise seemingly required to transfer a block of fees ! .

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By ireallyshouldknowthisbut
19th Dec 2022 14:40

I think they mean ***might*** be introduced from April 2026.

But probably wont.

And er "what benefits exactly?"

There are no benefits of quarterly reporting other than co-opting benefits of using digital records which are not contingent on quarterly reporting.
Quarterly transactional data is worse than useless to forecast tax payments as it may be actively misleading, it would be better to look at 'what I paid last year' and "is my profit up or down?" as a better rule of thumb.

its good to see they are looking a the sub £30k level, which sounds like they are going to can that entirely which will take millions of the very smallest business who are unlikely to benefit from digital records out of the system, including most landlords. Happy days. Unless you are a software seller.

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Replying to ireallyshouldknowthisbut:
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By User deleted
19th Dec 2022 14:48

Not sure if I heard the wind just now or a collective wail from the bosses of the Emperor's New Clothes cloud software companies

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By ireallyshouldknowthisbut
19th Dec 2022 14:40

What is curious about the announcement, is they don't mention quarterly reporting.

As in, at all. Not s single word on that in the whole statement.

Is it possible they have completely canned quarterly updates and this is now just a 'different tax return' ?

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Replying to ireallyshouldknowthisbut:
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By creamdelacream
19th Dec 2022 15:02

That's what happened with MTD for VAT. A big fuss over nothing. It was just a different API they collected the data through, nothing else changed.

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By Winnie Wiggleroom
19th Dec 2022 14:45

Hilarious - of course it is the businesses that need more time to prepare nothing to do with HMRC who are of course ready to press the big red button

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Replying to Winnie Wiggleroom:
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By David Ex
19th Dec 2022 17:33

Winnie Wiggleroom wrote:

Hilarious - of course it is the businesses that need more time to prepare nothing to do with HMRC who are of course ready to press the big red button

They don’t seem to acknowledge the impossibility of preparing for something for which they haven’t (as far as I have read) absolutely nailed down the necessary details.

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paddle steamer
By DJKL
19th Dec 2022 14:47

I left part time practice in September 2019 (MTD being one of the pushes) so in hindsight could have held on longer , but actually only working three days a week has generally suited me (I do like my four day weekends) so MTD has actually done me a favour nudging me to more spare time and less work.

This now means it will come in just a few weeks before my state pension kicks in at 66yrs and 1 month, circa May 26, whilst I may still do a little work supervising bits and bobs after this date I will certainly not be doing the nuts and bolts accounting by then and anyway we likely will have incorporated the last partnerships before we get to 2026.

Anyway Jeremy, Rishi, whoever,thanks for the early Christmas present, appreciated.

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By Tom Cross
19th Dec 2022 14:50

Pi55 up, in a brewery, springs to mind!

It's the deceit and underhanded manner, which sticks in my craw. Make it appear that the failure of the system sits elsewhere.

This decision basically portrays the country, at the moment. No direction and falling of a cliff. Fast.

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By Paul Crowley
19th Dec 2022 15:03

Amazed that HMRC admitted failure so early
They really prefer to leave it as late as possible
Could it be that a politician actually took a proper interest?

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VAT
By Jason Croke
19th Dec 2022 15:21

https://www.gov.uk/government/news/government-announces-phased-mandation...

Official news link.

Love it how this news has been written like it was delayed as a result of being fairer to taxpayers, not at all, HMRC just aren't able to deliver this within the timescales they had set.

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Replying to Jason Croke:
RLI
By lionofludesch
19th Dec 2022 16:05

Jason Croke wrote:

https://www.gov.uk/government/news/government-announces-phased-mandation...

Official news link.

Love it how this news has been written like it was delayed as a result of being fairer to taxpayers, not at all, HMRC just aren't able to deliver this within the timescales they had set.

It's called "spin".

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By Tog
19th Dec 2022 15:43

'Income' over £50,000 or 'turnover' over £50,000 ? Or is that still undecided?

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Replying to Tog:
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By raju m
20th Dec 2022 10:44

As per HMRC income means Turnover.?????????????????

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RLI
By lionofludesch
19th Dec 2022 16:04

Mandatory alignment with the fiscal year end is still on, I take it.

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Replying to lionofludesch:
By SteveHa
19th Dec 2022 16:20

Given that most will have already either prepared for, started, done, or ignored that, it probably doesn't matter.

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By David Ex
19th Dec 2022 17:39

This really sums up the shambles. However many years into the “project” they are and only now deciding to look at how it affects a large part of the original target population:

“The government will now review the needs of smaller businesses, and particularly those under the £30,000 threshold. This will look in detail at whether and how the MTD for ITSA service can be shaped to meet the needs of smaller businesses and the best way for them to fulfil their Income Tax obligations.”

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Replying to David Ex:
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By User deleted
20th Dec 2022 13:18

They already fulfil their Income Tax obligations....!

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Replying to User deleted:
RLI
By lionofludesch
20th Dec 2022 13:22

ABC12 wrote:

They already fulfil their Income Tax obligations....!

But not necessarily in the best way.

Whether MTD is better is open to considerable doubt.

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the sea otter
By memyself-eye
19th Dec 2022 18:18

Hurrah and 'Huzza' (been watching 'the Great' on Netflix/Utube/Iplayer etc etc)
abought time too....

This pig was never going to fly.

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By bettybobbymeggie
19th Dec 2022 20:09

Paul D Utherone wrote:
I might just about be able to retire first!!

My thoughts exactly - great news!

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By Matrix
19th Dec 2022 20:43

Most unincorporated businesses with income over £50k would already be using software.

In fact I think I only have one using excel and I used bridging software when he was VAT registered. Anyway he will have retired by 2026.

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By AS44NG
20th Dec 2022 10:17

"That means it is right to take the time needed to work together to maximise those benefits of MTD for small business by implementing gradually."

--

There are no benefits for small businesses. They lose with MTD for ITSA. Every single one of them.

Include accountants in that who have already incurred additional software costs preparing clients for MTD. What a shambles!!!!!!!!!!!!!

Heads need to roll for this.

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David Ross
By davidross
20th Dec 2022 11:17

As a Brexiteer, I know that I would have lost with good grace. So it is now - as so many times before, HMRC has acted like The Wizard of Oz but not followed through, leaving those of us who 'responded to the call' hanging.

The only regret is that the pressure to go digital is now off, but I've thought about it. Except for a few clients such as the 80 year one who's been with me 38 years, I'm going to continue putting the hammer down and convert (in our case, to FreeAgent).

In 2024 my practice will be 40 years old and I'll be 68. Looks like I'll have a nice easy time of it and, as and when MTD does happen, I'll be sitting pretty to cope with it.

My disgust is not with the idea of digital, it is with our useless Civil Service that can never deliver an IT project.

PS if the Powers that Be at AW read this, why do I get a constant feed of responses when I request a Daily Digest? Are you any better at IT than HMRC?

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Replying to davidross:
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By tracey2412
20th Dec 2022 15:09

@davidross - if you find the magic phrase / argument that persuades the reluctant to be converted, I'd be delighted to know. Happy to have a virtual coffee or pay for an hour of your time for the advice.

I have re-structured my business in the last year towards a huge push to the thousands / millions of tiny self-employed businesses who were going to be mandated under MTD for ITSA & have now lost my entire 2023-2024 plan.
I know the benefits of being digital & can spout them til the cows come home but the scared & clueless & tech-phobic are very difficult to convert, if they will even listen.

Open to any & all advice & tactics.

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Replying to tracey2412:
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By Paul Crowley
20th Dec 2022 18:27

Your plan was in effect to make money from people who do not want the service but were being obliged by HM Gov not just to comply with tax obligations but to serve up nonsense reports that were not being used by HM Gov.

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Replying to tracey2412:
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By JD
20th Dec 2022 21:11

so your business plan is to impose cost and complexity on small businesses, who will see no benefit from digitisation. Try solving the problems that these clients really have rather than profiting from something they do not need.

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Replying to JD:
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By AS44NG
20th Dec 2022 21:26

JD wrote:

so your business plan is to impose cost and complexity on small businesses, who will see no benefit from digitisation.

No, that was HMRC.

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Replying to AS44NG:
RLI
By lionofludesch
20th Dec 2022 21:49

AS44NG wrote:

No, that was HMRC.

"Was" being the operative word.

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Replying to JD:
David Ross
By davidross
21st Dec 2022 17:26

No profiteering - where did I say that I would increase fees? Persuading clients to get a NatWest or Mettle account gets them free software, so everyone wins

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Replying to tracey2412:
David Ross
By davidross
21st Dec 2022 17:37

I wish I did have magic words for the reluctant - so far kindly persuasion has brought in about 70% of the 'Target Audience" among our clients, and they actually love it when they see how much better things are.

There is a cadre of clients for whom it will not be suitable, such as a client of 38 years who is in his 80s. I'll stick with him until one of us drops off the twig - he has been loyal to me and I will be loyal to him.

After January there will be more time, and I will move from 'sign up' to 'education' as much as possible.

Finally there are some A-holes who for many years have held back their figures until the last minute, for whom it will be My Way or The Highway. I don't owe them the loyalty they have not shown to me. If they sign up, problem solved. If they leave, problem solved.

What gets my goat in these online threads is the constant, un-mitigating negativity. "Seeing Opportunity" does not equal exploitation.

Since 1984 I have only ever increased fees by inflation (aforesaid client is an example). Who else on here can say that? But my profit has gone up because all the efficiencies fall on my side of the table.

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By 0098087
20th Dec 2022 11:43

Just got email from HMRC confirming 2026!!!

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By ChrisPoole
20th Dec 2022 13:09

Deleted

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By ChrisPoole
20th Dec 2022 13:09

Deleted

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By ChrisPoole
20th Dec 2022 13:09

Appalling. This was a great opportunity, a real money-spinner, continually being kicked into the long grass.

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Replying to ChrisPoole:
RLI
By lionofludesch
20th Dec 2022 13:12

ChrisPoole wrote:

Appalling. This was a great opportunity, a real money-spinner, continually being kicked into the long grass.

Money spinner for whom? The software companies?

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Replying to ChrisPoole:
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By User deleted
20th Dec 2022 13:20

I prefer to view my clients as people I help with their tax affairs and what's best for them. Sure I make a profit but I don't view them as money making machines.

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Replying to ChrisPoole:
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By Paul Crowley
20th Dec 2022 18:30

Not heard from you since 2015
Glad you are keeping well

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