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MTD for other taxes potentially pushed back again

HMRC notice is vague but 2020 seems like a pipe dream

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Per ICAS, HMRC issued a notice saying they're stretched too thin delivering current projects and that MTD for IT and CT will be pushed back.

https://www.icas.com/technical-resources/making-tax-digital-important-up...

No real indication of what this means, but it's encouraging and seems to reflect what a lot of us thought, MTD for VAT will be the only mandatory MTD for a few years at least. I would be astonished if they came back now with a 2020 or even 2021 date for compulsory MTC for CT or IT.

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RLI
By lionofludesch
14th Dec 2018 08:50

Beginning to realise just how hard it is ?

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Replying to lionofludesch:
By Duggimon
14th Dec 2018 09:07

Who'd have thought it would be complicated?

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Replying to Duggimon:
RLI
By lionofludesch
14th Dec 2018 09:19

What's complicated about getting the systems working and only then making it compulsory ?

Meanwhile, they've been making Income Tax so complex that they can't write an algorithm to calculate it and we're having to go back to filling in paper forms.

We'll be chiselling VAT returns on slabs of stone this time next year, mark my words. #flintstones

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By ireallyshouldknowthisbut
14th Dec 2018 09:19

it will be pushed back and back and back until it disappears over the horizon.

VAT is the only one that will happen, and I am going to be shocked if its not still a pilot in 12 months time.

The stated purposes - raising revenue - simply isn't true, and its just got into the sort of place big IT project get - pushing on through regardless and losing momentum as it goes and people internally depart the sinking ship, not wanting to have their careers associated with project failure.

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Replying to ireallyshouldknowthisbut:
RLI
By lionofludesch
14th Dec 2018 09:20

Could be a revenue loser. I can see folk submitting returns they know to be wrong just because they can't work out how to alter them.

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Replying to lionofludesch:
By ireallyshouldknowthisbut
14th Dec 2018 09:46

We do a lot of back taxes work for rental properties, and a common theme is "I know i needed to declare it, but didnt know how, so I didn't get round to it".

This then becomes normal, and its undeclared.

By making it harder to get on the system, less people will put themselves forward.

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Replying to ireallyshouldknowthisbut:
RLI
By lionofludesch
14th Dec 2018 09:53

Bright side for HMRC is the possibility of penalties.

Still - anyone who can order a book on Amazon can fill in their tax return online, can't they ?

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Replying to ireallyshouldknowthisbut:
By SteLacca
14th Dec 2018 11:06

ireallyshouldknowthisbut wrote:

The stated purposes - raising revenue - simply isn't true, and its just got into the sort of place big IT project get - pushing on through regardless and losing momentum as it goes and people internally depart the sinking ship, not wanting to have their careers associated with project failure.

But don't forget that HMRC got £1.4bn to implement this. They have to show something for the money.

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Tornado
By Tornado
14th Dec 2018 12:37

I am still 100% convinced that MTD for VAT will not be mandatory from April 2019.

HMRC as a body are either numpties that believe anything they tell themselves or liars. A bit of honesty from our Government would be nice.

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Replying to Tornado:
RLI
By lionofludesch
14th Dec 2018 10:53

I think it'll be mandatory but compliance will be shocking.

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By Manchester_man
14th Dec 2018 12:28

Well done Tornado, you managed to fit the words 'honesty' and 'government' into a single sentence, without it looking odd.

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Replying to Tornado:
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By david.bransbury
14th Dec 2018 14:11

I was 99% sure it was going ahead. This notice proves that even with the Brexit fiasco they are so ready, I now say 100%.

There are now over 50 different software companies doing live filings.

Yes, there is loads to complain about the publicity regarding MTD but the IT systems will not stop this happening.

PS There is nothing on the HMRC website about this. Where is ICAS getting this info from?

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Replying to david.bransbury:
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By johnhemming
15th Dec 2018 10:44

david.bransbury wrote:

PS There is nothing on the HMRC website about this. Where is ICAS getting this info from?


As a developer I had an Email from HMRC which said almost exactly the same thing (or at least operatively the same). I could copy it into this forum if you wish, but it wouldn't add anything.
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By atleastisoundknowledgable...
14th Dec 2018 15:50

On tonight’s episode of “News Headlines That Shocked The World” ... not this.

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Replying to atleastisoundknowledgable...:
By Glenn Martin
14th Dec 2018 16:05

I suspect MTD wont get beyond MTD for vat, They will build it out so includes individual transactions but cannot see it getting beyond that.

If they are worried about people making mistakes that should fix that problem.

This 4 submissions plus an adjusting submission will sink the system and it will not work.

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Tornado
By Tornado
14th Dec 2018 16:49

It seems to me that businesses seriously using commercial accounting software such as Xero and Quickbooks, are in the minority and there are possibly many more people who use some form of spreadsheet accounting system.

(When I say seriously, I do not mean those, like a number of my clients, who have Sage or Quickbooks licences but never use the software or only use one module, I mean people who fully understand accounting software and use it as it is meant to be used).

There may be a good range of bridging software coming onto the market, but this only picks up nine figures from the spreadsheet and transmits those nine figures to HMRC.

This is a million miles away from the original concept of MTD and has cost us as taxpayers 1,200 million pounds to arrive at this breathtaking state of the art situation.

The problem still exists that each Excel spreadsheet has a unique format so it will be virtually impossible to create any software that can pick out the more advanced relevant information required when HMRC finally decide to implement MTD in full.

Why then promote bridging software and spreadsheets as a solution when they are never going to comply with MTD requirements.

The numpties at HMRC need to think again and create a PROPER project plan for MTD and then they may have a better chance of success.

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By johnhemming
14th Dec 2018 17:57

I would expect that there will be no precision on when other taxes may be made mandatory until there is certainty on Brexit and how much work is needed on that. Hence HMRC will be vague.

I don't expect any work on submitting transactions for MTD for VAT for some time (if at all). The priority will be to get digital links in for other taxes.

Linking up spreadsheets and MTD is really easy. One I did today involved partially exempt VAT and links to back office systems not just spreadsheets. HMRC may cite this firm as a case study about how easy MTD is to do and how little money it costs. Probably in the new year though.

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Tornado
By Tornado
14th Dec 2018 20:11

"Linking up spreadsheets and MTD is really easy"

But it is not MTD is it?

"HMRC may cite this firm as a case study about how easy MTD is to do and how little money it costs. Probably in the new year though."

Easy if you are a firm of Accountants but not so easy if you have no experience of accounting software or how to use Excel. Expensive if you have to pay others to do it for you.

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Replying to Tornado:
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By johnhemming
14th Dec 2018 21:12

Tornado wrote:

But it is not MTD is it?


I am not sure what you mean by this. Using software to link between HMRC and Excel is MTD.

I accept the point that if someone is not using any electronic data systems that there is more of a learning curve and there may be exemptions here as a result of age.

However, my company is not a firm of accountants, but an MTD provider. Sometimes we deal with accountants, but sometimes no accountancy firm is involved in the process.

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Replying to johnhemming:
Tornado
By Tornado
14th Dec 2018 23:41

"I accept the point that if someone is not using any electronic data systems that there is more of a learning curve and there may be exemptions here as a result of age."

It is interesting that you seem to link age with an inability to use electronic data systems. I have 'young' clients who don't even get the basics of double entry accounting and never will.

On the other hand, I probably fall in to your 'age exemption' category except I have been preparing accounts electronically since 1981 and have a fair understanding of what my clients can and cannot do, and I know that the majority of them would not be able to deal with electronic data systems.

I can assure you, that those who can use accounting software already do, and those that cannot do not and cannot be forced to do so.

The ability to use accounting software has no bearing on the profitability of small businesses. It is the abilities of small business owners to provide what their customers want that make successful businesses, not the ability to process data electronically just to please numpty civil servants and make huge profits for software developers.

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Replying to Tornado:
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By adam.arca
15th Dec 2018 09:54

Yes, I think you've missed the point there, John.

Using software to link spreadsheets to HMRC may well be MTD as it is currently envisaged but it certainly isn't the MTD which was originally proposed.

As far as accountants can tell, we've been through this whole MTD iteration to end up with a proposed system which is actually worse than the one we currently have. You might think that's some achievement except those if us at the sharp end have plenty of experience of the Revenue's long track record and unfailing ability in turning something that is or could be relatively straightforward into something onerous.

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Tornado
By Tornado
15th Dec 2018 10:22

The current system of Self-Assessment works very well in principle and if 1200 million pounds had been spent on enhancing and improving this system, then we would truly have a tax administration system to be really proud of.

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Replying to Tornado:
RLI
By lionofludesch
15th Dec 2018 10:34

Tornado wrote:

The current system of Self-Assessment works very well in principle ......

I'm glad you said "in principle". We have a number of exclusions where it doesn't work very well at all.

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Replying to adam.arca:
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By johnhemming
15th Dec 2018 10:45

adam.arca wrote:

Using software to link spreadsheets to HMRC may well be MTD as it is currently envisaged but it certainly isn't the MTD which was originally proposed.


I am newish to MTD because I wondered what the fuss was about earlier this year, looked at the specification and decided to offer a nice simple easy solution that was cost effective for smaller businesses.

I have seen a lot of misunderstandings about what MTD actually is and I have seen no evidence that spreadsheet software has ever been specifically proposed to be excluded as being MTD compatible. Spreadsheets after all are software and with the visual basic addition are quite flexible as programming environments although I personally prefer the HTML/Javascript/Server interplay (which is of course basic cloud stuff).

adam.arca wrote:

As far as accountants can tell, we've been through this whole MTD iteration to end up with a proposed system which is actually worse than the one we currently have. You might think that's some achievement except those if us at the sharp end have plenty of experience of the Revenue's long track record and unfailing ability in turning something that is or could be relatively straightforward into something onerous.

I don't understand how MTD is actually that onerous. I am on a day to day basis organising live submissions for real businesses. Hence I have about as much practical experience of MTD as anyone does.

I have even written a web interface into HMRC's test servers which you are welcome to try out at no cost to see how the interface does work in practice.

SAF-T has been around since I think 2005, but that is not what is proposed for the UK.

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Replying to johnhemming:
RLI
By lionofludesch
15th Dec 2018 11:09

johnhemming wrote:

I am newish to MTD because I wondered what the fuss was about earlier this year, looked at the specification and decided to offer a nice simple easy solution that was cost effective for smaller businesses.

Well, here's the problem, John. Surprising as it may seem to you, a lot of traders like to keep their books on paper and do so remarkably well.

On top of that, VAT is not always about just listing the invoices you issue and receive. Adjustments for partial exemption, TOMS or scale charges will need to be made and whilst these are easy to make with a biro and ffag packet, they're not always so easy to enter on a spreadsheet.

Then we have this new requirement (not new really, but HMRC say they us to comply now) to record all invoices and match them to payments if you're on the cash basis. Does your software cope with that, John ? I'm not convinced that spreadsheets comply with the cash basis at all.

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Replying to Tornado:
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By johnhemming
15th Dec 2018 10:31

Tornado wrote:

It is interesting that you seem to link age with an inability to use electronic data systems. I have 'young' clients who don't even get the basics of double entry accounting and never will.


It is HMRC who are offering an age exemption which is not yet totally clear. I don't personally link the two.
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By adam.arca
16th Dec 2018 21:37

John, it's great that you're developing bridging software and coming on our MTD threads.

If you're going to contribute to threads which aren't strictly technical, however, you do need to acquaint yourself with the background. That includes the original MTD proposals where spreadsheets were to be banned, and it also includes a better understanding of how people currently complete their VAT.

To answer your query, even completing a spreadsheet will appear onerous to a trader who has only ever kept paper records. My point about the Revenue always making things more onerous was a general one, however, which you mis-read as it was not one directed specifically at MTD.

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Replying to adam.arca:
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By johnhemming
17th Dec 2018 10:26

I have been Vat registered in one form or another since 1983. I have also submitted Partially Exempt and FRS returns through MTD.

I have not personally seen any evidence that spreadsheets were to be banned as a software tool that can be used to comply with MTD.

I accept that there are limits on the use of cut and paste and the clipboard, however.

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Replying to johnhemming:
Tornado
By Tornado
17th Dec 2018 10:38

"I accept that there are limits on the use of cut and paste and the clipboard, however"

I cannot see anyone using cut and paste as this destroys data in the source document but copy and paste is used extensively and is a purely digital way to transfer data from one spreadsheet to another part of that spreadsheet or somewhere else altogether.

I would emphasise that point about copy and paste being purely digital as you cannot do this any other way, so I am assuming that this is totally acceptable for MTD.

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By david.bransbury
17th Dec 2018 09:40

This seems to be fake news.

As I asked early where has this "news" been published by the HMRC.

On the same day as the ICAS were publishing this article, HMRC were releasing Agent Update 69.

This is what the HMRC is saying on MTD for other taxes on 13 December 2018.

"MTD will not be mandated for other taxes until at least April 2020, but businesses and their agents can get involved in the Income Tax pilot now on a voluntary basis."

I note a number of accountants websites have copied the wording of the ICAS article. There is obviously a connection between MTD and Brexit. I didn't expect a link between MTD and Trump.

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Replying to david.bransbury:
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By johnhemming
17th Dec 2018 10:23

This was published by HMRC last week. I had an email.

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Replying to david.bransbury:
By Duggimon
17th Dec 2018 11:57

david.bransbury wrote:

This is what the HMRC is saying on MTD for other taxes on 13 December 2018.

"MTD will not be mandated for other taxes until at least April 2020, but businesses and their agents can get involved in the Income Tax pilot now on a voluntary basis."

It says that in the ICAS article too. I don't know why you think ICAS are lying about HMRC having said what they've reported HMRC have said, but I don't think they have.

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