MTD Post Budget - More Information Please

Still too many unanswered questions.

Didn't find your answer?

It was a massive relief to me when I heard about the MTD 1 year stay of execution on wednesday but although we have more time to plan I feel that we need more information to be able to do so.

I'm a sole practitioner with approximately 160 clients, most of which keep manual records and quite a few who will not have a cat in hells chance of using software. (Try telling a dyslexic welder that he needs to embrace technology in order to streamline his record keeping and successfully take his business into the digital age).

I plan to get as many clients onto software as I can as soon as possible but until I know what products/apps/formats we are able to use going forward how can I plan effectively. Some clients may be just about able to manage to populate a spreadsheet but the details as to how spraesheets can be used are a bit sketchy at best.

Then logistically how on earth can it all be managed unless records are kept in real time on a decent cloud accounting package where the info is ready to be sent at a click of a button?

HMRC are still saying that provisions will be made for the digitally excluded. This this needs to be better defined. I would argue that anyone who is not wired to be able to learn how to effectively keep their records up to date using software is digitally excluded. I would definately argue that clients who are stumped after pressing the on button on a computer or who do not even own a computer are digitally excluded.

HMRC need to:

Tell us who qualyfies as being digitally excluded and what provisions will be in place.

Tell us what software we can use.

Tell us if totals from spread sheets can be keyed into software.

Confirm if we can send three line summaries via apps.

 

Replies (22)

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RLI
By lionofludesch
10th Mar 2017 11:38

For me personally, now we have more information, my next priority is to assess each client, see who can deal with their own stuff, who will want me to upload their records, those who aren't affected.

After that, discuss it with the client, make suggestions, get them to open a nominated business bank account if they don't have one.

But the truth is that we still don't have enough detail for me to advise the clients properly. I'm particularly thinking of the small ones. If I don't know what needs to be done, I can't tell them how much it will cost.

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By Duggimon
10th Mar 2017 11:46

FYI digitally excluded people are those who can't use computers for religious reasons, severely disabled people and those so remote they can have no access to the internet.

Dyslexic welders and technophobe pensioners I think are still expected to learn. It's all part of HMRC's new initiative to make everyone an employee of someone and have nobody running their own business.

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Replying to Duggimon:
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By Jamesm2705
10th Mar 2017 11:55

Duggimon wrote:

FYI digitally excluded people are those who can't use computers for religious reasons, severely disabled people and those so remote they can have no access to the internet.

Dyslexic welders and technophobe pensioners I think are still expected to learn. It's all part of HMRC's new initiative to make everyone an employee of someone and have nobody running their own business.

Is there a religious reason why one can not operate a computer?

I happen to know of a dyslexic welder who has recently had an epiphany.

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Replying to Jamesm2705:
RLI
By lionofludesch
10th Mar 2017 12:02

Jamesm2705 wrote:

Is there a religious reason why one can not operate a computer?

Yes, of course.

I also feel it's unrealistic to ask my elderly landlord, suffering from Alzheimers, to be expected to learn how to use a computer. He's never owned one. If I tell him how to use one, he'll have forgotten by the time I've left.

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Replying to Jamesm2705:
paddle steamer
By DJKL
10th Mar 2017 12:23

Certainly at one time certain sects of the various Brethren had issues with computer use, I am not really fully au fait with which now allow computer use and which do not but do believe there has been some movement/ relaxation since last had any clients who were members.

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Replying to DJKL:
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By legerman
10th Mar 2017 14:08

DJKL wrote:

Certainly at one time certain sects of the various Brethren had issues with computer use, I am not really fully au fait with which now allow computer use and which do not but do believe there has been some movement/ relaxation since last had any clients who were members.

I used to work for a company that was Plymouth Brethren owned, and having just checked, found they've relaxed that rule now, and do use the internet as long as it's filtered. What did make me chuckle was that radio and tv was not allowed due to corrupt influences, but the guy who was my immediate boss would happily read the Sun newspaper complete with (the then) page 3!

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Replying to Duggimon:
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By janefg
15th Mar 2017 11:33

How about my 86 year old client who has over £90,000 of rental income, keeps immaculate paper records, has no computer, no mobile phone and not even an answerphone on her landline! She also insists that her Tax Return is sent in on paper.
I would say that she is digitally excluded and not just a technophobe pensioner.

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Replying to janefg:
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By bernard michael
15th Mar 2017 14:01

janefg wrote:

How about my 86 year old client who has over £90,000 of rental income, keeps immaculate paper records, has no computer, no mobile phone and not even an answerphone on her landline! She also insists that her Tax Return is sent in on paper.
I would say that she is digitally excluded and not just a technophobe pensioner.

Lucky you. The perfect client to pay you to carry out the MTD returns

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Jennifer Adams
By Jennifer Adams
10th Mar 2017 11:50

My method of listing and sorting out clients is shown under my blog here:

https://www.accountingweb.co.uk/community/blogs/jaadams/how-and-when-sha...

Deferring a year means that as we get more and more detail more and more of the smaller accountancy practices will decide to place their businesses on the market.

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Tornado
By Tornado
10th Mar 2017 12:18

"records are kept in real time on a decent cloud accounting package where the info is ready to be sent at a click of a button?"

Post Budget we are now looking more closely at the mechanics of MTD and more of this will be detailed in proposed legislation to be published later this month.

At the time Mr Gauke made his famously glib explanation that quarterly reports will be sent just by pressing a button in the software we already use, many of us were mystified by this statement. It was only later that we realised he was referring to software that we were going to be forced to use and in that context, his statement could be considered correct.

As we have discussed many times on AWEB, getting to the point where submissions are made just by pressing a button is like being forced to set-up an expedition to the moon for some people, and completely unachievable for them.

Looking at this a slightly different way, MTD is entirely software driven, using both commercial and government programs and at the moment there is little evidence that this software is working at the basic level, let alone seamlessly talking to each other.

On this basis, I have absolutely no confidence that any of the MTD timetable will start on time. Perhaps the 400,000 people taking part in the pilot trial stating on April 6th 2017 (you have to laugh, where are 400,000 guinea pigs going to come from) will prove this point.

In theory, with absolutely everything about MTD being completely reliant on government IT systems and umpteen commercial systems all working in concert, we are merely users of the systems and therefore our (and our client's) responsibilities are just to enter the correct data. Correct Submission of Quarterly Returns, VAT Returns, Accounts, etc will be entirely the responsibility of HMRC and the software suppliers.

In addition, the calculation of tax liabilities, NIC, CIS, etc, will also be entirely in the hands of software supplied by umpteen commercial software developers and HMRC. Need I say more.

With this thought in mind, we will just need to be sure that we eventually make the best choice of software for our clients based on their needs and our only responsibility is to ensure that data is entered correctly.

My final comment is that I cannot see any of the MTD software and HMRC systems working anything near correctly for a number of years and there will be inevitable delays to the timetable so I will not be rushing to commit my clients to any particular software until I know which is the best.

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Replying to Tornado:
RLI
By lionofludesch
10th Mar 2017 12:24

Tornado wrote:

My final comment is that I cannot see any of the MTD software and HMRC systems working anything near correctly for a number of years and there will be inevitable delays to the timetable so I will not be rushing to commit my clients to any particular software until I know which is the best.

Me neither.

I cannot understand the rush.

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Replying to Tornado:
paddle steamer
By DJKL
10th Mar 2017 12:52

"My final comment is that I cannot see any of the MTD software and HMRC systems working anything near correctly for a number of years and there will be inevitable delays to the timetable so I will not be rushing to commit my clients to any particular software until I know which is the best."

But the catch is there is going to be limited real use feedback. Before needing to choose a particular horse for each client all we will have is the bookies' form books but we will not really have seen any of them running on good to soft.

We need to embrace a future for each client mainly based on the sales blurb and with very little peer feedback, not simple.

I suspect a fair few will just hope their current platform (I use Taxcalc) comes out with a useable bit of kit re record keeping as either an add on or that interfaces with their existing software as modified to embrace MTD, and I suspect then the steer will be to fit as many existing clients as possible into the firm's (my) systems.

I am fortunate in I do not have vast numbers of clients to consider but unfortunate in I do not currently have vast amounts of time to deal with this, being a part time practice.

In addition I will need to carefully consider how my employer's business entities, now down to one partnership, one LLP, and four companies, will embrace the brave new world.

I suspect a fair few of us are going to have to attend events to get hands on experience re what is on offer, this will be time consuming and will all need crammed into a fairly short time window.

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By CJaneH
10th Mar 2017 13:54

I have not noticed what is happening to CIS subcontractors.
As the contractor is/should be submitting gross and tax monthly for subcontractors, and tax is already deducted are they required also to submit quarterly reports?

Other CIS subcontractors do a mix of private non CIS and CIS work!

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Replying to CJaneH:
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By legerman
10th Mar 2017 14:24

CJaneH wrote:

I have not noticed what is happening to CIS subcontractors.

I'm assuming they will be treated as a sole trader like everyone else. Will their CIS income be fed in to the Tax Account though I wonder.

I have 5 or 6 yearly subbies, all with simple affairs, so providing I can get their income and espense details in line with the reporting I don't see any disadvantage against any other sole trader.

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By bernard michael
10th Mar 2017 16:24

I can't recall seeing how soon after a reporting month end does the MTD report have to be submitted before a penalty is incurred

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Replying to bernard michael:
RLI
By lionofludesch
10th Mar 2017 17:23

A month.

And you also have to do your VAT return in that time too.

Apparently, over 99% of businesses do their VAT returns on line. the figure may of course, be lower if they were allowed to do it any other way.

One of my favourite examples of Government spin .....

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Replying to bernard michael:
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By janefg
15th Mar 2017 11:38

I think it is by the end of the following month.

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By steve 12321
14th Mar 2017 14:38

simple vat query - just so painful to get though to them, why are they doing this when they cannot provide a decent service.

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By steve 12321
14th Mar 2017 14:38

simple vat query - just so painful to get though to them, why are they doing this when they cannot provide a decent service.

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By steve 12321
14th Mar 2017 14:38

simple vat query - just so painful to get though to them, why are they doing this when they cannot provide a decent service.

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By [email protected]
15th Mar 2017 10:31

How about we ask clients to sign up to the trial, such as the Dyslexic welder and I am sure we could all select clients that would give HMRC some real idea of what they are in store for especially when HMRC see the corrections to be made when we get our hands on the records!

I do worry that those who sign up as guinea pigs are the more IT literate in the first place and so the results will be skewed in HMRC favour, again!

We all know it will not work for many small self employed businesses only if we, or a book keeper take on the role but we all know that the clients are often not in position to afford the extra cost, assuming we can complete the work in “real time"

If we do the work doesn't that rather defeat one of the basic ideas behind MTD

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By raybackler
15th Mar 2017 11:33

If Sturgeon gets her way will spreadsheets be called spraesheets north of the border. The OP may have hit on something!

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