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MTD hits mainstream news at last

Telegraph Editorial 7.3.19

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At last - someone has had a dig at MTD in a mainstream newspaper.  The Daily Telegraph Editorial this morning pointed out that many businesses are unprepared and called on the Chancellor to hold things up.  They are a bit late in the day but perhaps there's still hope.... 

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07th Mar 2019 14:04

Lord Forsyth of Drumlean is of course HMRC's nemesis and has consistently warned that there has been no proper preparation for change.
Well of course, HM Government has form - for a lack of preparation and, it follows, HMRC falls into the same camp.
When RTI was introduced, from 2012, there was a realistic and phased introduction. There were a variety of issues and, it beggars belief that HMRC take the view that this lack of preparation will result in anything, other than a complete car crash.
Whilst the professional sector may well be prepared, the unrepresented sector, clearly hasn't a clue.
At least (Sir) Jon Thompson was honoured well before the proverbial hits the fan.

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By Tornado
07th Mar 2019 14:49

A Google search locates this editorial but only a small part can be read without subscribing. There is enough visible, however, to conclude that the article is critical.

The same search throws up two articles in the Telegraph from a couple of days ago that have a positive spin and suggest that MTD will be good for business such as -

"Going digital will spur higher revenue for SMEs ready to take the plunge"

and

"Moving to a software-based accountancy solution is not just about compliance with MTD regulations. For SMEs, one of the main advantages is that it gives them the opportunity to take control of their finances and become more efficient as part of an overall move towards digital transformation."

It does not take much searching to see that the quoted comments come from Quickbooks sponsored articles.

This just about sums up the mess that MTD is, a golden egg for software developers but an unnecessary, expensive and time consuming burden on profit earning ability for hundreds of thousands of businesses.

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to Tornado
07th Mar 2019 14:57

Full article: From next month, small businesses with a turnover above £85,000 a year are required to complete their VAT returns digitally. This has been a long time coming, but few knew about it and not many are ready. Indeed, why should they be? Is it necessary?

There is a view in government that attaching the word “digital” to anything makes it progressive, modern and therefore imperative. Yet the move to digital tax returns has been undertaken to satisfy HM Revenue and Customs, not small enterprises, nearly two million of which still file returns manually.

This trend to push all government business online has been forced on the country, like it or not. Many of the groups most likely to interact with state agencies, such as the elderly and the vulnerable, do not even use the internet.

Campaign groups and business organisations have been warning the Government that this is the wrong approach and, as the deadline approaches, the vast majority are unprepared. These concerns led the Treasury last October to announce a deferral for some of the more complex organisations, but this was not extended to smaller businesses, for whom implementation will be most burdensome.

–– ADVERTISEMENT ––

A parliamentary committee recently criticised the “rushed” timetable following pilot schemes and said there was too little time before April 1 to “make up lost ground and respond to implementation issues identified by taxpayers”.

Philip Hammond, the Chancellor, is making his Spring statement next Wednesday. He should use it to suspend the digitalisation programme until the Government has got it right and businesses are ready for it.

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By Tornado
to DaveyJonesLocker
07th Mar 2019 15:15

"These concerns led the Treasury last October to announce a deferral for some of the more complex organisations"

Ironically, some of these 'more complex organisations' are Government or Local Government Departments that will be unable to comply from the 1st April 2019 (and probably not from the 1st October 2019 either).

What make them any different to the rest of us?

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to Tornado
07th Mar 2019 15:41

Totally agree its a real disgrace to HMRC.

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to DaveyJonesLocker
07th Mar 2019 15:47

All Phillip Hammond has to say is that MTD4V will be voluntary from 1st April as a result of the current problems with Brexit and the difficulty some of the smallest business entities face. He could say the Government are listening and want to help and will look into extra help for small business RATHER THAN , you have to do this and if you don't you will be fined in a years time , go to night school to learn about accounts and computers and don't bother asking is for help etc.

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07th Mar 2019 14:59

The number of questions even on here show what a disorganised pile of [***] this is.
If we need to keep asking each other, what hope does the unrepresented person have?

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07th Mar 2019 16:21

As public awareness of MTD comes to fruition it seems HMRC will be brought into question.

Why have they backdated the Exemption Criteria should it not be in Real Time and should they not face an investigation of their records and face fines or a penalty.

They should make a public statement now about the reasons why this has been handled so badly and why so much of taxpayers money had been wasted when the HOL told them this would happen. They should immediately address why the warnings from the ICAEW have been totally ignored in favour of the Software providers recommendations when they are in it for the profit .

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to nodrogbir
07th Mar 2019 15:51

Your posts about MTD are making me start to like it.

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07th Mar 2019 17:22

There is no way in a million years MTD will be mandatory in April 2019. It is never going to happen in its current form.

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to bettybobbymeggie
07th Mar 2019 17:57

I think it will be mandatory.

But not at all enforced.

I think instead we will see "wave 1", keen firms doing it properly.

Then "wave 2" firms responding to general badgering having a go later in the year

And then "wave 3" highly reluctant business who need fines etc to get a shift on in 12-24 months from now.

I don't plan being in Wave 1.

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to ireallyshouldknowthisbut
07th Mar 2019 17:59

hopefully I will be retired and gone in wave 3 - HMRC couldn't organise a tea party for chimps lets a load a drinks party in a brewery.

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to ireallyshouldknowthisbut
07th Mar 2019 18:27

Totally agree with you.

Being a "goody two shoes" the majority of my clients will be in wave 1 but I expect will a few will need a prompting letter from HMRC after their first VAT return that should of been done under MTD but have not done so (before a new argument starts, they have box 1 with £20,000+).

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to david.bransbury
07th Mar 2019 18:57

very lucky guy ,my clients could not achieve this result. Depending on the age , educational standard , time available and culture - wave 3 is inevitable .

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to bettybobbymeggie
07th Mar 2019 18:09

A bold statement, but I think you are going to disappointed.

What they should have done at the start is having it voluntary from 1 April 2019 but with a "carrot" to entice taxpayers on the system for the first year. This could of been an extra £200 off first Vat liability would have encouraged the smaller clients onto it. The other option would have been give VAT returns under MTD seven more days to submit and pay but they were more likely penalise the non MTD submitters by moving their deadline to the end of month like the good old days.

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to david.bransbury
08th Mar 2019 11:52

if it was £500 for the pilot £250 first Q after April, nothing if you leave it for a years.

I would have about 90% of my clients on the pilot.

Bribery gets you a long way.

it worked for PAYE getting people off the old paper forms, and online.

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07th Mar 2019 20:59

Am I missing something or is "From next month, small businesses with a turnover above £85,000 a year are required to complete their VAT returns digitally" not a massive understatement? It's not something I have looked at in any detail but I thought the requirements went much further than just online filing.

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to Accountant A
08th Mar 2019 09:04

It's quite misleading, every single business who has to enter MTD already files their VAT returns online, it's not a move from paper to digital on the returns, it's a mandatory and complete change of accounting systems imposed on potentially hundreds of thousands of businesses for literally no benefit to HMRC, who still receive identical data under the new system as they do currently, under the system that's working fine.

That's the real issue with MTD and I can only assume the paper hasn't really got a grasp of what MTD is and is just parroting a cobbled together selection of comments from the HoL report.

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By DH242
11th Mar 2019 17:12

I'm a sole trader. I'm a business writer. VAT registered. T/O about £85k annual, but half of that is sales of services to US (outside of VAT). So do I need to be MTD compliant for VAT? i.e. does HMRC define the £85k turnover qualification as 'VATable' turnover (meaning I don't qualify) or as total turnover (in which case I will need to comply)? MTD is a bit of a sledge hammer to crack a nut in my case. I typically issue 3-4 invoices a month and incur 2 or 3 input costs a month that I bother to reclaim VAT on. Thanks.

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