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The days of the Petty Cash Book are doomed

under MTD

The Petty Cash Book, something that has worked effectively for years for millions of businesses, will be no more under MTD. Good job it's only going to cost each business about, was it, £32 to implement MTD. They must have taken into account the massive savings that businesses will make not having to buy a new Petty Cash Book every few years.

"(1) Subject to regulation 32B a taxable person shall keep and maintain the information specified in paragraphs (2) and (3) in an electronic form (“the electronic account”).

.....

(3)

.....

(b)subject to sub-paragraph (c), for each supply received within the period—

(i)the time of supply,

(ii)the value of the supply, and

(iii)the total amount of input tax for which credit is allowable under section 26 of the Act(1);"

Should we all be advising clients to ditch the PCB as well?

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21st Jun 2018 13:47

Dont know about you but last time i used one in the late 90's even then I used to drop it into excel and attach the summary to the journal in the main system.

Its all digital innit.

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21st Jun 2018 15:35

I have a client who is still using a Simplex book, which he keeps meticulously. He absolutely refuses to use a computer despite the usual MTD warnings

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to bernard michael
21st Jun 2018 16:39

Good on him.

I see no reason why he should if the current system works.

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to ireallyshouldknowthisbut
21st Jun 2018 16:45

No, you are not listening to HMRC. Bernard's meticulous client who keeps perfect records is costing the Treasury billions in the Tax Gap. And MTD will cure that.

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to Wanderer
21st Jun 2018 17:08

Yes, I have one client who keeps a very well ordered Simplex book, specifically designed for her trade. I also have a client who moved to an online software system (not pushed by me, I should add), and the number of errors made in just one month is entirely believable. It is so easy to imagine that you doing it right, but actually get it so wrong, and if you are working without an accountant to put you right (why would you think you've gone wrong anyway), these mistakes will be unsolved. Of course, they could decrease the VAT you pay, or possibly increase it, I should say it's 50-50. No chance that HMRC will work this out. Oh, and that £32 per client, I'm pretty sure that was the figure mentioned, won't go far will it

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to Wanderer
21st Jun 2018 17:10

Too right I am not listening to HMRC.

What are they going to do about it exactly?

Deport everyone who keeps manual records?

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to ireallyshouldknowthisbut
21st Jun 2018 17:48

Probably Section 69 VAT Act 1994
https://www.legislation.gov.uk/ukpga/1994/23/section/69

There's more money in penalties than tax nowadays! And it's easier to impose penalties.

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to Wanderer
21st Jun 2018 18:19

And who exactly is going to be policing this?

Are they going to be employing 20,000 records inspectors?

No-one cares if the VAT is correct. Moreover all you will get first up is a warning and telling off.

NB I didnt realise how tiny the fines are. Is it only £500, or has that now gone up?

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to ireallyshouldknowthisbut
21st Jun 2018 18:32

ireallyshouldknowthisbut wrote:

And who exactly is going to be policing this?

It'l be self assessed!
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By MJShone
22nd Jun 2018 10:39

There is a way out of MTD. Become a practising member of a religious society or order whose beliefs are incompatible with the use of electronic communications....

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22nd Jun 2018 10:41

Do you mean HMRC ??

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22nd Jun 2018 11:02

Personally, I'd just enter the totals on the last day of the month/quarter/year.

In fact, I've just done this for a client on VT+. Total payments, £452, inc VAT, where applicable.

To give an idea of scale, turnover £659,000 + VAT.

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