MTD - I dont have a computer

MTD thought

Didn't find your answer?

Nice and simple - what to do with a client who has no computer ? How can I claim exemption when no formal process in place to do this ? 

Cant see the answer to this on HMRC website but note ICAEW say dont claim exemption yet. Getting through to HMRC is impossible and they won reply to email. 

 

Replies (37)

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By airgeadagam
28th Feb 2019 10:12

I'm a big fan of writing letters to all sorts of companies and government departments.
It doesn't take long, stick on a stamp and voila - there you have a concise question, a written record on file and no endless waiting on a telephone line whilst having to listen to Robbie Williams before getting through to someone who more often than not gives you an incorrect answer to your query. And the response received is also in writing, which will stand up better when there's a dispute and you can't prove or remember what anyone said.
Having said that, you need to be able to wait a couple of weeks or more for a response but it makes it more exciting when the postman calls.

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Replying to airgeadagam:
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By nodrogbir
28th Feb 2019 12:49

Thanks and my letters in the post to HMRC .

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Replying to nodrogbir:
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By FD4CAST FD4CAST
07th Mar 2019 10:54

I suggest you do a grammar refresher course before you put pen to paper.

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By Tim Vane
28th Feb 2019 10:21

Well it’s making tax digital so he either buys a computer or outsources the books to somebody else. It’s a cost of doing business nowadays, like having a phone or a bank account.

There would be an exemption if your client objected to the use of computers on religious grounds.

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Replying to Tim Vane:
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By nodrogbir
28th Feb 2019 12:49

We are talking about a fish and chip shop not ICI !

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Replying to nodrogbir:
By Tim Vane
28th Feb 2019 13:25

nodrogbir wrote:

We are talking about a fish and chip shop not ICI !

How do you know it’s a fish and chip shop? You’re just making stuff up.
But as you mention it Fish and chip shops are notorious for underreporting turnover and squirrelling away cash. Many a VAT inspector has sat outside a chip shop and counted the customers to prove they bear no relationship to the reported takings.

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By dejaneiro2005
28th Feb 2019 10:42

Have a look at Harvey t/as Sun Ice Air Conditioning v HMRC

It is amusing if nothing else.

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By DaveyJonesLocker
28th Feb 2019 10:57

Another example of how can it be right HMRC are dictating how people keep records, yet still accept paper tax returns.

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Glenn Martin
By Glenn Martin
28th Feb 2019 10:58

Under MTD HMRC will require your client to get a PC or get you to do it for him.

As he has to file his vat return via .gov currently I cannot see how this will be much of a difference for them.

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Replying to Glennzy:
Morph
By kevinringer
07th Mar 2019 13:42

Glennzy wrote:

As he has to file his vat return via .gov currently I cannot see how this will be much of a difference for them.

What? 39% of my clients keep manual VAT records and phone me to file via GOV.UK. MTD will require digitisation of transactions. Most of the 39% have never used a computer in their life. Do they really have to learn? If so, who is going to teach them? These businesses are making tiny profits: they are mainly farmers who will continue to farm no matter how bad it gets. They can't afford to pay anyone to do it for them. So what are they to do?
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By mfbrown185
28th Feb 2019 11:10

I sympathise with the poster of this MTD VAT post. We have an Agricultural Contractor (aged 71) who does not possess a computer and does not have the skills to use one.
We currently file his VAT returns through the Gateway and draw up his returns and accounts from manual records and file his returns for him.
His comment is - that he will retire now, he doesn't want a computer and he doesn't need one.
We have written a letter for him to copy and send to HMRC asking for exemption. The letter in reply is to tell him to carry on with his present filing regime but to also point him towards hyperlinks showing him Notice 700/22 and the MTD digital requirement.
We are pursuing the exemption route to keep the client happy - he will almost certainly be forced into MTD VAT or retire.
HMRC (in this case) worse than useless and our client is getting more and more stressed (not good for a 71 year old).

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Replying to mfbrown185:
Glenn Martin
By Glenn Martin
28th Feb 2019 12:33

Can you not just do as you are doing and file it using bridging software with no change to the client.

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Replying to Glennzy:
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By legerman
28th Feb 2019 13:09

Glennzy wrote:

Can you not just do as you are doing and file it using bridging software with no change to the client.

I don't think that will be strictly acceptable. My understanding is that the records have to be digital as well. So it's fine for the client to plonk his written ledger on your desk and you put everything onto a spreadsheet or software, but it's not fine to enter the totals into a spreadsheet which you then extract the VAT boxes from.

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Replying to Glennzy:
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By mfbrown185
01st Mar 2019 10:25

Hi Glenn - yes that was our first thought but he is manual books and his accounts will involve quite a bit of input. Also manual books means that he can't be without the books for long periods (or he gets behind with his administration), even getting him to copy them and send them to us is causing him problems.
His business runs through one bank account (thankfully) and we have decided that we will post up his bank monthly as this will cover 99% of his accounting information and deal with his equipemnt leases etc all at the year end. Only solution that we can see at the moment

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Replying to mfbrown185:
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By johnhemming
28th Feb 2019 12:46

If you type his vat information into a spreadsheet or some other electronic totalling system I would think he can comply entirely by your activity. My understanding about the timeliness of the vat register is that it has to be recorded before the return is due not on a daily basis.

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Replying to mfbrown185:
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By nodrogbir
28th Feb 2019 12:53

I have the same type of client . Anyone of a certain age struggles with computers let alone understanding double entry book-keeping , spreadsheets and bridging software.
I am being forced to sell my business and retire .

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Replying to nodrogbir:
By ireallyshouldknowthisbut
28th Feb 2019 15:26

Do come on, just file the thing for the chap using your systems, and blow how you got to the figures.

What exactly are HMRC going to do about it?

Very little, they wont have a clue who is and who is not doing that.

They have very little power to do anything but huff and puff a bit in the very unlikely chance they even look at it!

The max fine is £400, and even then only with a warning, and you would probably win an appeal at the FTT if you went that far.

PS, are they even over the VAT threshold? People seem to forget this only applies if you are over the limit.

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Replying to ireallyshouldknowthisbut:
Tornado
By Tornado
28th Feb 2019 16:02

I think you really should know better than to suggest that rules should be broken. The whole point of being a qualified accountant is that you are deemed to be an honest and reliable person who strives to abide by the rules and do the right thing in all circumstances.

Having said that, I think your summary of the situation is spot on in that HMRC do not have a snowballs chance in hell of monitoring any of this and do not have anywhere near the resources to deal with tens of thousands of appeals and complaints.

Why on earth have they made this so complex? It could have been so much easier.

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Replying to Tornado:
By ireallyshouldknowthisbut
28th Feb 2019 16:21

Tornado, I would suggest the point of being a qualified accountant is to assist the client in running their business to pay the right amount of tax, and to comply in a cost effective way with any compliance issues.

It is not to dogmatically make clients comply with every rule in the book. That's brain out, follow the rules, technician level. At the advisor level, compliance should be based on the basic cost of compliance and the risk for non-compliance

if the cost is so high the poor guy would rather close his business, then the cost of non-compliance is negligible then don't comply other than superficially.

Quite frankly I think many of my peers need to grow a pair.

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Replying to ireallyshouldknowthisbut:
Tornado
By Tornado
28th Feb 2019 16:44

Your reply is a little different in tone to your original post which seemed to promote a 'modern' approach to integrity.

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Replying to nodrogbir:
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By mfbrown185
01st Mar 2019 10:21

Thanks - that is a very attractive solution. But one that I can't pursue for another 3 or 4 years I'm afraid hahaha

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Replying to nodrogbir:
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By Bobbo
01st Mar 2019 13:49

Could you ease up with the sweeping statements about older people's ability to use computers. My grandparents are quite fine at using them thank you.

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Replying to Bobbo:
Morph
By kevinringer
07th Mar 2019 13:46

I agree - age is irrelevant. It is competency that is relevant. I have some clients aged 70+ who will be competent with MTD and some clients aged 25 who will not.

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By K81
28th Feb 2019 11:22

I have a client - not VAT so MTD does not apply yet.
She does not have a computer/smart phone or even a till.
She runs a hairdressers & is 60 yrs old. She has three ladies who hire chairs from her.
they take cash only & have a little drawer that the money goes in, hand written receipt. She doesn't even have a bank account.
She has worked this way for 30 years & can't see why she should change.

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Replying to K81:
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By nodrogbir
28th Feb 2019 12:56

We need more Accountants to speak up. This lady is being victimised by HMRC . The only way HMRC will listen is if ALL Accountants stand together . Please do not get me wrong computers should be used and encouraged but not forced upon people who don't use them and actually are unable to use them.

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By nodrogbir
28th Feb 2019 12:47

Thanks for your replies. I have just had a market trader on the phone and when I told him he needs to buy a computer - put all his takings and expenses on and keep a balanced cash record ( he does this now manually ) he said that HMRC can do what they like and prosecute him put no way had he the confidence to do that or anything like it. And you know what I totally agree with him. I wonder what will happen as at the moment I could just walk out and cry . You all maybe interested to know that over the last two years I have been talking to HMRC directly and yesterday I got an email stating any problems ring the helpline . With rude , untrained and demorolised staff no way would I do that . HMRC staff are rude just to get you off the phone and you are left totally deflated and no better off.

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Replying to nodrogbir:
Tornado
By Tornado
28th Feb 2019 13:12

"And you know what I totally agree with him"

So do I

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Replying to Tornado:
By SteveHa
28th Feb 2019 13:22

Really, Tornado? And here was I thinking that you were one of MTDs biggest fans, to the point of being an unofficial ambassador. ;)

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Replying to SteveHa:
Tornado
By Tornado
28th Feb 2019 14:31

You are partly right. I believe the majority of Accountants see the long term benefits of moving to a more digital way of accounting, but it is the way that this project is being introduced that will prevent that from happening as quickly as it might otherwise have been.

In fact, in my firm we have not maintained records for clients manually for over 16 years and I was preparing final accounts for clients on a personal computer in 1981 with a program called Audit Man (Beta). (That is 38 years ago in case anyone thought digital accounting was something new)

The approach with clients has always been to assess their particular requirements and provide services to suit those clients. This must be a successful approach as most of my clients have been with us for over 25 years and some for 60 years.

So YES, I am in favour of moving to more digital accounting for business but NO I am not in favour or railroading MTD through at an unnecessary pace and in such a shambolic way.

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Replying to Tornado:
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By nodrogbir
28th Feb 2019 14:05

This firm has been digitally advanced for decades and we used Auditman and now IRIS. Inhouse book-keeping is with Sage and that ok. Where my problem is that HMRC demand one day you drop manual and the next day you use digital for everything , in my book that's wrong. Clients like to get things from HMRC in a letter and anyone of the age 40ish to 100 plus is used to that. HMRC have failed the taxpayer and now I think a revolt is on the cards as people are fed up with being dictated too when HMRC don't do their bit. In this case they havn't even got the decency to admit that maybe they have got things wrong."Customer Readiness and External Stakeholder Team " how very dare you !!

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Replying to nodrogbir:
Tornado
By Tornado
28th Feb 2019 14:27

"and now I think a revolt is on the cards"

An interesting thought. Taking to the streets with banners and flags is de rigueur these days and sounds like fun, so why not an Anti-MTD demonstration.

29th March 2019 seems like a good day so, OK, meet me at the Slug and Snail on the corner of Remain Street and Brexit Street at about 11.00 am and we can march on Parliament and let them know what a mess this is.

Seriously though, perhaps this is not such a far fetched idea and it would not surprise me if there was some sort of newsworthy action about MTD in the not too distant future.

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Replying to Tornado:
Morph
By kevinringer
07th Mar 2019 13:53

We used Auditman. In fact I've been using digital accounts since 1979: I started programming for a travel agent when I was still in school. I switched to 100% digital tax returns in 1998 and started digital CT years before it was compulsory, online VAT too. I even joined the RTI pilot. But I oppose MTD because forcing clients who have never used a computer to digitise their transactions is a massive ask. Have you ever sat with someone using a computer for the first time and tried to get them just to control a mouse? And HMRC thinks these people can digitise their transactions. My clients are mainly farmers. I'd like to see HMRC staff try to run my clients' farms: delivering lambs and calves, milking cows, shearing sheep. Would it be reasonable for me to expect HMRC staff to be able to do that? No. So why do HMRC think it is reasonable for my clients to magically turn into accountants.

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the sea otter
By memyself-eye
28th Feb 2019 13:20

Me too!

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By Duggimon
28th Feb 2019 14:02

You know what, just three more threads like this and we'll finally have beaten MTD and HMRC will be forced to retreat, good job everyone.

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Replying to Duggimon:
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By GHarr497688
28th Feb 2019 15:05

Accountants should voice concerns and HMRC should take on board what they say to make the system work. At the moment it seems they done care at all .

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Replying to GHarr497688:
By Duggimon
28th Feb 2019 15:10

I agree accountants should voice concerns, I just question how much is going to be achieved by repeatedly voicing the same concerns on a web forum populated by accountants.

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Replying to Duggimon:
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By GHarr497688
28th Feb 2019 15:13

I agree but have also written to HMRC , in the end the taxpayer will decide as I suspect many will fail to sign up for MTD.

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