MTDITSA ... Back To The Future?

or, How to give up without admitting it!

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From HMRC's "Corporate report Making Tax Digital Small Business Review: outcome" (Published 22 November 2023)

"The government believes that quarterly updates are central to the design of MTD" and yet "Rather than a total for the 3-month period covered within the update, each update will (now) be a cumulative total of income and expenses accumulated during the tax year to-date."

So ...

* Q 1 = any random / unchecked figures picked up from bank statements

* Q 2 = same process but now with a few corrections to bank statement figures

* Q 3 = same process but now with (some) of the missing / misattributed figures from bank statements

*Q 4 = full review (after preparation of annual accounts) including all necessary adjustment figures .. aka the old 'return'

Apparently this is called "sending light-touch quarterly updates to HMRC" - or just 'submitting any old rubbish until year-end' as several here have said for many years!

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However you will, no doubt, be re-assured to know HMRC is still convinced that "The development of a modern, digitalised tax administration system will support small businesses to grow" - and believes that "MTD for ITSA is central to .. supporting small business productivity."  Do they even read what they write?

.

As for the beta testing ... if you were walking through the forest and encountered a deep hole surrounded by signs saying 'Danger - this pit can kill you', would you even go close enough to lean over and take a look at the contents?  And if you are that foolhardy, would you (after espying all the sharp points facing upwards with snakes writhing around them) insist on jumping in 'just to see what all the fuss is about'?

Replies (10)

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By ireallyshouldknowthisbut
23rd Nov 2023 13:45

I just spent a very gruelling 2 hours trying to explain how Mettle interacts with FreeAgent for a very smart client in their mid 50's with a new limited company.

I gave up, and suggested he just downloaded the bank account details and we would whack it into excel, and train him how to do an extended cash book for us.

He has about 10 transactions a month. Software is acting as a massive drag there.

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By ireallyshouldknowthisbut
23rd Nov 2023 13:50

back to MTU, I think we already worked out some time ago all you need to build is a "pie chucker" to lodge any old stuff with HMRC and sort it out properly at the end, and probably regulated firms would want to outsource that to a "cheap is best" type provider and keep a million miles away from it. Back when I thought they might actually do it, I was thinking about getting a low grade admin type purpose on freelance direct to the clients (not my employee of course) and just file "something" to HMRC. I don't care what.

The fact its cumulative I think means essentially the 5th period adjustment is in all but name what we do now. ie the final totals, and what went before utterly irrelevant. With a bit of luck we wont even need to know what was filed in the first 4 garbage returns, and we just put the real numbers in, job done.

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Replying to ireallyshouldknowthisbut:
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By FactChecker
23rd Nov 2023 14:04

That's my interpretation too (hence my sub-title about them giving up).

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By rmillaree
23rd Nov 2023 13:59

i would guess god doesnt even have aclue

*Q 4 = full review (after preparation of annual accounts) including all necessary adjustment figures .. aka the old 'return'

when is q4 submssion due - if its not soon after 5th april surely that makes the whole process meaningless at q1/q2 and q3 figures are completely irrelevant while finmal submission is everything

are peeps really gonna submit nowt ref year end till july time when for example, p11d info is actually available

supid is as stupid does

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Replying to rmillaree:
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By Jo Nokes
23rd Nov 2023 16:53

But hold on, won't the Q4 report have to be filed very shortly after 31 March, so there won't be time to fiddle around with it. The final accounting won't happen for several months, how does that fit in with this?

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Replying to Jo Nokes:
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By rmillaree
23rd Nov 2023 17:34

"But hold on, won't the Q4 report have to be filed very shortly after 31 March, so there won't be time to fiddle around with it. The final accounting won't happen for several months, how does that fit in with this?"

thats the question that has no answer isnt it - they are making a problem out of something that isnt currently a problem.

being frank i suspect ability to monitor means tested benefits claimants is partly a driver here at the top - its a shame they dont say that and design a system for those peeps and leave the rest alone.

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Tornado
By Tornado
23rd Nov 2023 15:07

However you will, no doubt, be re-assured to know HMRC is still convinced that "The development of a modern, digitalised tax administration system will support small businesses to grow" - and believes that "MTD for ITSA is central to .. supporting small business productivity." Do they even read what they write?

The default cash basis for all unincorporated businesses is hardly going to provide any meaningful management figures. Each quarter's Return will only show what has been received and what has been paid out, information which provides no credible indication of the performance of the business, particularly those unincorporated businesses with larger turnovers.

HMRC seem to be drifting away into a little world of their own completely oblivious to the way that small businesses are really run and what Accounting information is of real use to them.

The increasing madness of HMRC's desperate efforts to keep MTD alive leads me to wonder if there is anything more going into their tea than just sugar. All logic and common sense seems to have drifted away with the Fairies.

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By AdamJones82
23rd Nov 2023 18:09

I'm not wasting any more time thinking about this. I did when it was first announced by Osbourne and not being taken for a fool again.
To everybody except the software vendors and HMRC it is obvious it can't work.
I await to hear the next postponement date

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Should Be Working ... not playing with the car
By should_be_working
24th Nov 2023 09:46

I'm not surprised and I expect we'll see more of this HMRC-face-saving watering-down of MTDITSAXYZ.

They can never admit they're going to essentially scrap most of it - there are too many civil servants' careers pinned on it - but I find this sort of news encouraging.

If I were them I'd be looking at ways to improve the existing self-assessment system but just do it under the MTD banner.

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Replying to should_be_working:
Tornado
By Tornado
26th Nov 2023 12:12

there are too many civil servants' careers pinned on it

Sadly, I think this is very much the reason for this desperate effort to keep this failed project alive.

If I were them I'd be looking at ways to improve the existing self-assessment system but just do it under the MTD banner

The obvious solution.

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