The worm that turned?

Time to do something about the MTD ITSA fiasco

Didn't find your answer?

Enough is enough.

As a profession we have put up with all the stupid initiatives heaped on us over the years, but really MTD ITSA is the final straw.

A firm can have hundreds or thousands of tax returns to file annually and currently has between April and January to get them all done, which is barely manageable, but we are used to it and the system works.  

Now we are expected to file them quarterly.  They are not simply 'updates', they are tax returns.  Don't be fooled into thinking any initial concessions to allow estimates, or rubbish to be filed will last.

This is just not feasible.  It will be January every few months.  

What are we supposed to do?  Quadruple our fees?  Quadruple our staff?  (can any firms even manage to recruit anyone at this time?)  Sack 75% of our clients?  Who else would even have capacity to take them on?

This is going to take a wrecking ball to the entire profession and the taxpaying public. We are sleepwalking into an almighty mess and nobody is doing anything about it.

We have heard this week that the professional bodies have written to the Government expressing their 'support' for the proposals but merely urging 'delay'.  Support? Delay?  This thing needs strangling at birth.

I am loathe to say trade union, but is it now time that some sort of professional accountants association was formed that takes a more confrontational approach and loudly and rudely calls out this BS?

Thoughts?

Replies (436)

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Replying to BIGWAL:
By petersaxton
28th Aug 2021 19:55

"Oh Dear" exactly!
I tell them I am charging a lot more because I have to account for personal items which I wouldnt have to bother with if they paid out of their personal bank account. If clients want to ignore me it costs them more. I dont say to HMRC that MTD for ITSA wont work because of it.

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Replying to petersaxton:
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By DKB-Sheffield
29th Aug 2021 14:11

petersaxton wrote:

If clients get cash then post it to a cash "bank account". When they bank it treat it as a transfer

Peter

Thank you for enlightening me. Whilst I will admit to being a late starter in my use of accounting software, this is what I used to do in Pegasus and Sterling!

My comment was more geared to the earlier suggestion that bank feeds are the answer to all of our concerns. As yet nobody has said where the "cash-business" bank feeds come from (maybe an app in the proprietor's wallet?).

My point therefore was... if we rely on bank feeds, my client with a turnover of £40K per month is only showing as having an £8K per month turnover. The hardest part of the job is reconciling the client's cash account - not reconciling the client's £8K deposit (which will be on a bank statement).

I will give my clients their due. Obtaining bank statements (pdf, csv, hard copy) is never the issue (i.e. theoretically bank feeds)."Coding" items from a bank statement is simple. Reconciling the bank account is straight forward. Obtaining receipts and invoices is the worst part. In all honesty (and through experience), expecting some (most) of them to be more proactive by taking photos, forwarding emails, or scanning documents requires more 'chase effort' and time (on my part), and a greater likelihood of client errot, than suggesting they dump everything (relevant or irrelevant) in a mailing bag!

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Replying to DKB-Sheffield:
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By Winnie Wiggleroom
29th Aug 2021 14:37

DKB-Sheffield wrote:

petersaxton wrote:

My comment was more geared to the earlier suggestion that bank feeds are the answer to all of our concerns. As yet nobody has said where the "cash-business" bank feeds come from (maybe an app in the proprietor's wallet?).

Bank feeds are just part of the puzzle , every client has different requirements - if they deal in cash a lot then you will need some way of collecting that data from them.
As an example we have a client that is a takeaway, so when we started acting for them we sat down with them and went through how they were keeping their records (handwritten) but it turned out that the till they had was linked to a digital system that they never used.
Other clients spend a lot on cash so they go on AutoEntry.
Just two examples, but the point is that there is usually an answer that does not involve reinventing the wheel, sure it will mean some change but at the end of the day does your client want to implement some changes or do they want to pay more in fees?

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Replying to Winnie Wiggleroom:
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By DKB-Sheffield
29th Aug 2021 18:50

Dear Winnie,

At the beginning of this thread, you cticised the OP suggesting (along the lines of) they had no proof that there would be an additional time burden of implementing MTDITSA. To me, that time burden would include time taken with a client - not just time spent on 'writing up books' - the entire time spent with a client.

Training clients on use of technology, explaining processes, checking they are doing what is asked and chasing up when they are not, is (to me) 'time'. And yes, if it takes 8 hours on 15th January to prepare a tax return or (in a utopian world) 2 hours every quarter to do the same that is an equal amount of time. BUT if it were to take an additional day of training and 2 hours per quarter to check and chase that client, I find the total time taken to be far from equal, marginal or less!

Add to this the fact clients have to spend longer getting the information ready, there is a per-entity cost of cloud software and, in the case of Autoentry, an equivalent "per-transaction" cost for each item uploaded (as opposed to the per-entity charge for HubDoc), it's not really providing much ammunition against any argument that there is a cost-benefit (time or £s) to the client.

Clearly, I agree with your previous posts that 'up to date' financial information is beneficial. However, who is it beneficial to? Many of my S/T or L/L clients know they're financially okay if they have £5K in the bank. They know if their business levels are higher or lower than last year. They've been in business long enough to know if they'll have a larger tax bill (rarely changing more than £2K). They don't have PAYE/ VAT to worry about. They don't need to know who or what they are spending money on. They're not interested in margins, conversion, dropthrough, ratios etc. They just want their tax return doing - which invariably they look at once when they sign it. They don't need cloud software, won't benefit from it, and certainly won't have the drive to keep it updated daily, weekly, monthly, or even quarterly. They simply WON'T use it unless it becomes law that they personally (and not their accountant) MUST use it.

So, taking away the option of moving those clients to use cloud software... "Yes" there will be an increased time cost. "Yes" this will be considerable. "Yes" in some cases it may be quadruple. And as the client is receiving no further benefit other than "4 extra button presses", no the fees will be allowed not increase accordingly.

Furthermore, and even with the more technically savvy clients, there will still be a "new" additional level of work. Hard as it may be for you to believe, I am aware of cloud software, am aware of receipt scanning (having used invoice OCR software since 2004) and don't spend my life stuck at a walnut desk updating leather-bound ledgers (although I suppose nowadays they're PU ledgers). However, I have tried a good number of clients on Autoentry, HubDoc, Dext, QBO Receipts (etc.). Some, are actually very good at it. However, some are rubbish (and they will tell you the same). Indeed I spent 3 days last month at a client's office (not S/T) going through a filing cabinet of purchase invoices. Some were on HubDoc, some were on 4 times, some were non-existent, some were on the system but illegible. Had the client provided the invoices in the first place, 1 day is all they would have taken to process. Not only that, the client would have saved 3 days processing "garbage". I realise it's not the system - it's the client but, I'd have had a much better chance getting things right first time without the 'help' of the software.

In summary, 'yes' if ALL clients are technically competent, sufficiently organised/ motivated and understood/ accepted that paying software fees and putting in their own time to assist with MTDITSA, there may be minimal increases to the work involved (although not may I say equal). However, that isn't the case, and for those who not fit into that category, there will be an additional time element - possibly up to quadruple (as the OP has suggested - only to be shot down in flames) - and there will be an additional cost. Whether you call that a software subscription, or not, the client invariably hears "accountancy fee increase".

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Replying to DKB-Sheffield:
By petersaxton
29th Aug 2021 20:13

"as opposed to the per-entity charge for HubDoc"
HubDoc is free if you use Xero

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Replying to petersaxton:
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By DKB-Sheffield
29th Aug 2021 23:35

petersaxton wrote:

HubDoc is free if you use Xero

I think you will have gathered, as a general rule - I don't.

HubDoc - I use for 2 clients (now 1).

Autoentry - I use occassionally if it will help with material items for external audit purposes (mainly as it also integrates with Sage 50 (etc.)

The rest... lever arch files with a big label saying "Keep Until 2028"

If I were to use HubDoc more regularly, it would be because it was they best fit for my client. If Xero was also the best software fit, I'd use that. However, if it wasn't, other software (cloud or otherwise) will prevail.

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Replying to DKB-Sheffield:
By petersaxton
30th Aug 2021 09:08

When I started out getting my own practice I knew five different accounting software packages (Access, Sage, QuickBooks, MYOB, I can't remember the fifth!). My wife would do the bookkeeping and I would deal with everything else. As I got more clients I dropped the bookkeeping side. The work - not the wife!

I don't fancy learning five software packages again. They keep changing as well.

How do you decide which software is best for the client? My experience is that software does things different ways but the basics are the same. Obviously the more you use a piece of software the quicker you get at it.

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Replying to DKB-Sheffield:
By petersaxton
29th Aug 2021 20:20

It's much better to realise quickly what your client is capable of.

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Replying to petersaxton:
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By DKB-Sheffield
29th Aug 2021 23:46

I did. That was a single quarter and that's where it ended up. They are no longer using HubDoc!

Instead, they are back to me collecting a quarter's worth of documents. Better that than take my chances on incomplete info!

They are a 30% cash business btw - before we get back into the bank feeds conversation!

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Replying to DKB-Sheffield:
By petersaxton
30th Aug 2021 09:11

"Instead, they are back to me collecting a quarter's worth of documents. Better that than take my chances on incomplete info!"

You wouldn't think it would be better to collect documents monthly?

"They are a 30% cash business btw - before we get back into the bank feeds conversation!"

Bank feeds would still be useful.

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Replying to DKB-Sheffield:
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By Winnie Wiggleroom
29th Aug 2021 21:09

DKB-Sheffield wrote:

Dear Winnie,

At the beginning of this thread, you cticised the OP suggesting (along the lines of) they had no proof that there would be an additional time burden of implementing MTDITSA. To me, that time burden would include time taken with a client - not just time spent on 'writing up books' - the entire time spent with a client.

DKB, firstly may I say how pleasing it is to have someone with (perhaps) an opposing view that actually engages with a reasonable thought out argument rather than resorting to school playground antics like many do on here.

I would firstly like to point out that my response to the OP was not "MTD will take no more time than now" it was "where on earth have you come up with 4 times". I find that there are often wild exaggerations on here with regards to MTD usually from people that either have no actual experience or have some other agenda and my genuine question was - do we really know that what you are saying is true? Up until now the OP has not responded.

Certainly in my experience of doing this with a wide variety of clients (and yes that includes former paper only clients) 4 times the work is a wild exaggeration.

Sure, there is the initial implementation cost, in my practice when MTD was first announced a few years ago we set aside 3 months to meet with every client to warn them of what was to come and to learn about what would be required from both sides, but that investment is in the past and I can tell you categorically for myself and the practice as well as the clients generally things have improved since then.

It is of course very difficult and wrong to generalise too much, every single practice is different, but I think we are very similar to many, we have a very broad spectrum of clients in many different sectors.

In summary, my overall point is that I do not see that it is as bad as some make out, it is by no means perfect of course, obviously there is some more work involved at some point, but in my experience with some clients it will be more work and others it will be less, either way wild exaggerations do not help anyone.

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Replying to Winnie Wiggleroom:
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By DKB-Sheffield
29th Aug 2021 23:19

Thank you for the reply Winnie!

Your comments are constructive and well explained and I certainly do appreciate that.

You give clear indications of how a practice/ clients could manage the process and accept that it won't apply in all circumstances.

I give clear examples of how it may not work, but I do accept that some practices/ clients will overcome this more easily than others.

Whilst we are coming at this from very different angles, we probably are not 100 miles apart. I do actually like cloud accounting (!!!) and have used it for about 12 years (starting with a number of "development" trials). If it's applicable to the client and the practice I'll use it.

I won't however pledge my sole allegiance to Xero (as I can tell you haven't) any more than I would believe every client (small or large) is suited to a specific accounting package. Groups made up of H and 5 subs in a total of 6 jurisdictions - 3 'non-UK/IE/US' are not a great fit for Xero (although QBO isn't as bad).

Clearly I have reservations about MTDITSA - as I know we all do.

The key concern is managing client expectation and sweeping statements of "quadruple the work/ fees" or "a bit more work/ fees but not double" (neither being your comments) are not helpful. This is, afterall, a public forum and it wouldn't be the first time a client has relied on the (somewhat) inaccurate information quoted on here when talking to their accountant!!

Thanks again

Dave

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Replying to DKB-Sheffield:
By petersaxton
30th Aug 2021 08:56

"Groups made up of H and 5 subs in a total of 6 jurisdictions - 3 'non-UK/IE/US' are not a great fit for Xero"

I only have one group and all UK companies. I like to keep things simple if possible.

"I won't however pledge my sole allegiance to Xero (as I can tell you haven't) any more than I would believe every client (small or large) is suited to a specific accounting package. Groups made up of H and 5 subs in a total of 6 jurisdictions - 3 'non-UK/IE/US' are not a great fit for Xero (although QBO isn't as bad)."

I have chosen Xero as I feel they are the best cloud accounting software for the long term and seem to understand accountants best.

I have specialised in small businesses. The biggest client I ever had was just less than £5m turnover and they were taken over. My biggest client now is just under £250k. I only have one group of companies. All of my clients are in the services sector.

When I trained with an international firm I was into all that was going on in the accounting world but now I run my own practice I am more interested in producing accounts and tax returns as efficiently as possible.

Quite often when I took over work from other accountants I found that they would accept anything the clients would provide in any form. I always discuss what can be done to make life easier for both of us. Now the information I get varies from accounting software, spreadsheets, bank statements, sales invoices, envelopes with descriptions and totals for each type of expenditure.

With MTD I want to keep things as simple as possible. That's why I have chosen Xero for all MTD clients. I will want bank feeds. I will discuss what clients prefer from who attaches documents to transactions and explains transactions and how they prepare sales invoices either on Xero or how they do it now. I will do anything they dont want to do. I will charge clients quarterly based on the work done. We will discuss how things are going regularly. I'll try to get my clients doing more if they want to and are capable enough.

My experience so far is that accountants may be surprised how adaptable clients are at doing what is needed.

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Replying to DKB-Sheffield:
By petersaxton
29th Aug 2021 15:43

"My comment was more geared to the earlier suggestion that bank feeds are the answer to all of our concerns."
Nobody is saying that bank feeds are the answer to all our concerns. Where was that said? Bank feeds are a help. There are different issues and different ways to resolve them. I thought that much was obvious.

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Replying to petersaxton:
RLI
By lionofludesch
29th Aug 2021 15:58

petersaxton wrote:

"My comment was more geared to the earlier suggestion that bank feeds are the answer to all of our concerns."
Nobody is saying that bank feeds are the answer to all our concerns. Where was that said?

I thought Winnie said it at some point

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Replying to lionofludesch:
By petersaxton
29th Aug 2021 16:21

"I thought Winnie said it at some point"
Winnie said the opposite. Something like: Bank feeds are useful but they dont solve every problem. Screwdriver and hammer were mentioned. Different tools for different tasks.

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Replying to DKB-Sheffield:
By petersaxton
28th Aug 2021 18:56

"The biggest surprise to me throughout this thread is those who are suggesting there will be no additional work, no additional inconvenience to clients, and the only additional process is the clicking of a button 4 times per year! "
Can you indicate where anybody has said that?

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Replying to petersaxton:
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By Hugo Fair
28th Aug 2021 19:27

Not in those precise words, but your post of only a minute earlier than this one (28th Aug 2021 18:55) said:
"What is five times a year? Submitting the returns? Some people seem to be obsessing on the sending of data to HMRC."
The inference being that it's only the actual submissions that are (needlessly) worrying people ... whereas it's the copious additional work (whether performed by clients or agent), plus the additional inconvenience to clients, that's causing near apoplexy.

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Replying to Hugo Fair:
By petersaxton
28th Aug 2021 19:43

"Not in those precise words, but your post of only a minute earlier than this one (28th Aug 2021 18:55) said:
"What is five times a year? Submitting the returns? Some people seem to be obsessing on the sending of data to HMRC."
The inference being that it's only the actual submissions that are (needlessly) worrying people ... whereas it's the copious additional work (whether performed by clients or agent), plus the additional inconvenience to clients, that's causing near apoplexy."
People were obsessing about sending the returns. In my view that is ridiculous. What is important is getting the accounting right. The people who complain about 5 returns a year are the people who are being ridiculous. Because somebody says they are upset about sending returns 5 times a year and I show them it's ridiculous, that doesn't mean that I am saying the issue is sending returns 5 times a year - I have quite the opposite view. If you think I am saying that sending returns 5 times a year is the problem then you are wrong.

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Replying to petersaxton:
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By Hugo Fair
28th Aug 2021 20:08

"If you think I am saying that sending returns 5 times a year is the problem then you are wrong"

No I don't think you're saying that ... I think you've said (or indicated) that some responders were saying that (sending returns 5 times a year) is their primary concern.
I don't believe any of them thinks that clicking a button is arduous (annoying yes but a minor irritant only) ... the concerns (verging on despair) relate entirely to what you (correctly) refer to as "getting the accounting right".
And whether or not you agree, many agents believe that achieving that state is about to get more arduous and inconvenient for clients - and, if the task is passed to the agent, more expensive.

To mix my similes ... any fool can learn how to press the starter button on a powerful motor-bike, but it's not a good idea if they're sitting on it and have never driven a bike before.

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Replying to Hugo Fair:
By petersaxton
28th Aug 2021 20:24

"I think you've said (or indicated) that some responders were saying that (sending returns 5 times a year) is their primary concern."
I was trying to find out why Paul said "5 times a year". I dont see the contribution to the discussion.
I think bank feeds will avoid the need for clients to use spreadsheets.
Attaching documents to transactions will mean extra work for clients or accountants but the advantage is that accountants will have more information in front of them to resolve queries quicker.
Journals for payroll and depreciation will be needed - monthly or yearly.
Accountants have to make an effort to get clients doing what's required promptly. If clients think they want to be a rebel then they will have to accept the penalties.

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Replying to petersaxton:
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By DKB-Sheffield
29th Aug 2021 14:59

petersaxton wrote:

I think bank feeds will avoid the need for clients to use spreadsheets.
Attaching documents to transactions will mean extra work for clients or accountants but the advantage is that accountants will have more information in front of them to resolve queries quicker.
Journals for payroll and depreciation will be needed - monthly or yearly.
Accountants have to make an effort to get clients doing what's required promptly. If clients think they want to be a rebel then they will have to accept the penalties.

Peter

I think you (and others) are misreading (and have misread) what is being questionned.

I have no doubt that in some cases, clients are able to take on additional "work". But that is in no way suggesting this will alleviate all, or even some, of the impact this will have on the accountant. Indeed, in some cases, more involvement by a client will lead to more involvement by the accountant - albeit in a client's eyes, they have done part of the work so the fees should be less - not more(?!).

Furthermore, I think you are reading people's reluctance to overly rely on software as a reluctance to using it. I don't believe anyone is suggesting software is incapable of saving time (although, in my experience, some of the bells and whistles do fail on cost-benefit grounds), but that over-reliance can actually cost time, and even lead to material misstatement (e.g. by suggesting bank feeds are anything other than a list of transactions in a bank account - i.e. a bank statement).

Additionally, accounting software has come on leaps and bounds, is more user-friendly, and has much more capability than it did when I was starting out. However, it is still accounting software! It still needs some basic knowledge of accounting/ bookkeeping. A client of mine is a mechanic. He is a fantastic mechanic. He kept my 18 year old car on the road for many years. However, he is an appauling bookkeeper and not very tech-savvy but then, I'm no mechanic! I will no more be telling him to learn bookkeeping and start using cloud software (or face a much higher bill), than he would tell me to service my car before taking it to him (to avoid the same). In both cases, the result would be drastic - his poor bookkeeping and my dangerous car repairs. In both cases the fees to put it right would actually be considerably higher!

We all have different clients and whilst moving some onto cloud software would reap benefits, I'd say 75% of mine would not. Without changing them all successfully, the time required by the accountant/ tax advisor to be compliant with MTDITSA (and incidentally - all existing tax regulations!) will increase substantially - not stay the same, reduce, or increase marginally! Furthermore, in almost all cases, the time required by clients will also increase (without, the reduction in fees they will expect)!

Finally, you may be in a position whereby all clients are sufficiently computer literate, have sufficient accounting knowledge, AND are sufficiently understanding that an increase in their workload will not equate to a decrease in fees. However, we are not all in that position. Nor are we all in a position that, if a client takes on additional entry, at the same annual fee, they will also accept being charged for the software costs!

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Replying to DKB-Sheffield:
By petersaxton
29th Aug 2021 16:01

"Furthermore, I think you are reading people's reluctance to overly rely on software as a reluctance to using it. "
You are wrong. I think a lot of the complaints stem from a reluctance to accept change.
"Additionally, accounting software has come on leaps and bounds, is more user-friendly, and has much more capability than it did when I was starting out. However, it is still accounting software! It still needs some basic knowledge of accounting/ bookkeeping."
I'm not suggesting that clients should do all the bookkeeping. I would suggest that they can explain a transaction in a non-VAT business. Some people may need help. One of my clients wanted to post every payment to "Direct Expenses" until I showed him how to approach it. Then he was fine.
An accountant can help clients by coming up with bank rules. If a client is totally incapable of doing anything then the accountant will have to do it and charge accordingly. If clients are incapable of understanding extra work is needed and has to be paid for then they can always look elsewhere. I doubt any accountants will find themselves with too little work to do.

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Replying to Hugo Fair:
By petersaxton
28th Aug 2021 20:12

I've just read through the thread.
Somebody was talking about how long it would take to post sales invoices in Xero.
I pointed out that preparing a sales invoice in Xero would be just as quick as preparing it in Word and then posting it to accounting software or spreadsheets.
Paul then said: "And 5 times a year"
I said: "What is five times a year? Submitting the returns?"
Now you claim that means "The inference being that it's only the actual submissions that are (needlessly) worrying people"
So somebody else says "5 times a year" and I question the point. Somehow you claim it means that I think that people are complaining about 5 returns a year rather than the more obvious point that I was asking why Paul mentioned 5 times a year. I wouldn't presume to think what Paul meant by his comment yet you saw fit to presume something that nobody else would every think I was saying.

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Replying to petersaxton:
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By Hugo Fair
28th Aug 2021 20:30

OK ... I think we simply have to accept that (on this topic) you and I are observing the same thing from a slightly different standpoint - what is known in various scientific circles as 'relative observation' or 'alternative observer-relative facts).

So, in order to avoid entering a world of quantum physics (let alone multiverses), I will withdraw from further contributions to this thread (whilst still standing by them) - and belatedly commence my bank holiday relaxations.

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Replying to Hugo Fair:
By petersaxton
28th Aug 2021 20:40

A very wise move. I think the issue boils down to getting documents attached to bank feeds and who explains the transactions promptly.
If a client doesnt want to pay for accounting software, or want to keep transactions up to date or pay an accountant to do the work then more fool them.

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Replying to petersaxton:
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By I'msorryIhaven'taclue
28th Aug 2021 21:52

Before that happens we need to get bank feeds right.

It's rare that I would tick up an entire year's bank statements, but I did so this week for two related companies. Between Lloyds Bank and Sage:

1. Some transactions were omitted altogether from Sage;
2. Some transactions were included twice in Sage;
3. Annoyingly, some transactions were rounded. For example £23.99 on the bank statement somehow becomes rounded up to £24.00 in Sage (typically Stripe incomes; although some purchases were also rounded up by a penny - making any auto-reconciliation / matching off impossible, however you approach it);
4. The problem was augmented by the client's attempts to correct transactions, and (separately) to journalise bank transactions.

Until such inconsistencies are ironed out, attaching the supporting invoice documentation would only serve to further muddle matters.

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Replying to I'msorryIhaven'taclue:
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By Winnie Wiggleroom
29th Aug 2021 06:50

I'msorryIhaven'taclue wrote:

Before that happens we need to get bank feeds right.

It's rare that I would tick up an entire year's bank statements, but I did so this week for two related companies. Between Lloyds Bank and Sage:

1. Some transactions were omitted altogether from Sage;
2. Some transactions were included twice in Sage;
3. Annoyingly, some transactions were rounded. For example £23.99 on the bank statement somehow becomes rounded up to £24.00 in Sage (typically Stripe incomes; although some purchases were also rounded up by a penny - making any auto-reconciliation / matching off impossible, however you approach it);
4. The problem was augmented by the client's attempts to correct transactions, and (separately) to journalise bank transactions.

Until such inconsistencies are ironed out, attaching the supporting invoice documentation would only serve to further muddle matters.

I would suggest that you have two problems there and its not the bank feeds as such - we have issues like this with Sage but I cannot recall a time we have had the same happen with QBO, Freeagent or Xero.

The second problem is that the client has done the book-keeping - a recipe for disaster! I only let clients loose if I am absolutely sure they know what they are doing and certainly that they know that if the Bank on the software does not reconcile at the end of a month it needs sorting out.

I do agree that there are other issues with bank feeds that do need sorting out but not all Software is equal and not all Banks are equal where feeds are concerned

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Replying to Winnie Wiggleroom:
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By I'msorryIhaven'taclue
29th Aug 2021 17:21

Thanks Winnie, that's useful information. I cannot recall any such errors - whether doubling up of bank feed entries, altogether missing entries, or rounding differences alike - between Lloyds Bank and other accounting packages (and we cobbled together a set of accounts as recently as last week with a cast of Lloyds bank and Xero). So, prima facie, it's a Sage and Lloyds bank issue. Misfeedance!

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Replying to I'msorryIhaven'taclue:
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By I'msorryIhaven'taclue
29th Aug 2021 17:23

But Sage, by the sounds of it, are the problem.

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Replying to I'msorryIhaven'taclue:
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By spilly
01st Sep 2021 00:50

Not necessarily just Sage though, I’ve had similar problems with a Xero/Lloyd’s bank feed.

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Replying to I'msorryIhaven'taclue:
By petersaxton
29th Aug 2021 08:14

Obviously we need to get bank feeds right. I always ask for copies of bank statements and reconcile them to the bank transactions. I have less than ten clients on bank feeds but the bank feeds have always been correct.

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Replying to petersaxton:
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By BIGWAL
29th Aug 2021 01:14

There's an assumption bank feeds will resolve all the issues. Not so with at least one situation I deal with. (There are others)
Client has both zero and standard rates shop sales of food plus standard rated alcohol products in the day, plus evening sit down meals served with or without alcoholic drinks. All sales recorded correctly through till, so Vat information is from till records at (presently three) different rates. Purchases - also at standard and zero rates - often on same supplier invoice. Would be great if bank feeds were able to differentiate varying rates of vat for sales and purchases -but just one real life example where they don't help zt all.

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Replying to BIGWAL:
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By Winnie Wiggleroom
29th Aug 2021 06:55

BIGWAL wrote:

There's an assumption bank feeds will resolve all the issues. Not so with at least one situation I deal with. (There are others)
Client has both zero and standard rates shop sales of food plus standard rated alcohol products in the day, plus evening sit down meals served with or without alcoholic drinks. All sales recorded correctly through till, so Vat information is from till records at (presently three) different rates. Purchases - also at standard and zero rates - often on same supplier invoice. Would be great if bank feeds were able to differentiate varying rates of vat for sales and purchases -but just one real life example where they don't help zt all.

Bank feeds are just one tool in the toolbox - a screwdriver is as useful as a hammer, you don't always need both for every job

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Replying to BIGWAL:
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By johnhemming
29th Aug 2021 10:48

Bank feeds do at least give an exhaustive list of transactions that have been through the bank (or other source of feed).

I have myself said to HMRC that we are not in a position where you can expect bank feeds to automatically generate tax coding for all transactions for all taxpayers, but it can sometimes reliably code some transactions.

It all depends.

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Replying to johnhemming:
By petersaxton
29th Aug 2021 11:00

An accountant should review transactions whether they are posted daily or provided once a year.

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Replying to petersaxton:
ALISK
By atleastisoundknowledgable...
29th Aug 2021 13:31

petersaxton wrote:

An accountant should review transactions whether they are posted daily or provided once a year.

So every day you log into every clients software, even when they only pay you a couple of hundred pounds to file their tax return?

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Replying to atleastisoundknowledgable...:
By petersaxton
29th Aug 2021 14:29

"So every day you log into every clients software, even when they only pay you a couple of hundred pounds to file their tax return?"
Only idiots do that.
I have software that lists my clients and shows if they are up to date.

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Replying to petersaxton:
ALISK
By atleastisoundknowledgable...
29th Aug 2021 15:44

You took me too literally, besides “…[checking] if they are up to date” isn’t the same as checking their transactions are correct, which is what you said every accountant should do.

There was no need to throw unkind words around, I certainly wasn’t (and you’ll note still aren’t).

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Replying to atleastisoundknowledgable...:
By petersaxton
29th Aug 2021 16:17

You just check every day to see if clients are explaining transactions. I would chase up the one's who dont make an effort. Eventually I will give up on the client's who are not going to make an effort and I will get round to them once I have dealt with the clients who make an effort. I would review the work as regularly as I think necessary. It's all a matter of judgement. What I wont do is panic. I will do my best and then see how I get on and what can be improved.

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Replying to atleastisoundknowledgable...:
By petersaxton
29th Aug 2021 16:50

atleastisoundknowledgable... wrote:

So every day you log into every clients software, even when they only pay you a couple of hundred pounds to file their tax return?


By the way, did you mean "log into every clients software"?
I log into my account once and I have access to all my clients on Xero.
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Replying to BIGWAL:
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By Elena @ ESA. Ltd
29th Aug 2021 16:39

BIGWAL wrote:

There's an assumption bank feeds will resolve all the issues. Not so with at least one situation I deal with. (There are others)
Client has both zero and standard rates shop sales of food plus standard rated alcohol products in the day, plus evening sit down meals served with or without alcoholic drinks. All sales recorded correctly through till, so Vat information is from till records at (presently three) different rates. Purchases - also at standard and zero rates - often on same supplier invoice. Would be great if bank feeds were able to differentiate varying rates of vat for sales and purchases -but just one real life example where they don't help zt all.


Bank feed is a bank statement fed into the software, nothing else.

Digital proves of receipts, bills and invoices imported into the same software resolve the issues with the tax rates.

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Replying to petersaxton:
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By DKB-Sheffield
29th Aug 2021 13:41

petersaxton wrote:

I pointed out that preparing a sales invoice in Xero would be just as quick as preparing it in Word and then posting it to accounting software or spreadsheets.

Hi Peter,

If this was in relation to my post, I never suggested using Word or Xero. I do not raise client sales invoices - using Word, Xero, Sage, by Hand (etc.). Nor do I ever wish to do so. However, I do enter the transactions into an electronic format and that WILL take more time if done on a weekly/ monthly/ quarterly basis.

However, asking a client to move from raising invoicing on Word to entering them on an accounting system is quite a step up for some. Furthermore, telling them that, to avoid a significant increase in fees (2x/ 3x/ 4x), they must now stop raising (perfectly legal and compliant) pen and paper invoices (triplicate pad, sequentially numbered, recorded in a sales day book) is an immense change - particularly as that client's knowledge of computers may be severely limited to reading the odd email and looking at family photos on Facebook!

I have tried with the "detailed instructions" bit. For the technophobes that invariably needs a starting point of "Press the big button on the front of the computer". Moreover, any more than 5 lines of instruction, or more than 2 screenshots that look almost identical... forget it! As for giving them a link to a video - if it's not a funny YouTube animal video, it simply won't go in!

All in, the suggestion that clients will see fees increase considerably if they don't significantly change their processes, spend hours of their time uploading documents, and learn an entirely new skill, does not in my book equate to suggestions elsewhere on this thread that there shouldn't be a significant increase in time required!

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Replying to DKB-Sheffield:
By petersaxton
29th Aug 2021 14:33

Somehow the invoices have to be entered into the software. A simple list of the sales invoices in a csv file can be uploaded into the accounting software.
Eventually HMRC will want to use the software to check the bookkeeping.

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Replying to DKB-Sheffield:
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By Jimess
01st Sep 2021 11:28

Thank you! - it is everything that is going through my head. We cannot sacrifice other more profitable work on the bonfire of vanities that is MTD for ITSA, nor can we leave long term clients that have never had to think about bookkeeping and software to struggle with it's onerous provisions. What a conundrum to solve and so little time to deal with it.

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Replying to Jimess:
By petersaxton
01st Sep 2021 11:52

"nor can we leave long term clients that have never had to think about bookkeeping and software to struggle with it's onerous provisions."

If client's can't cope with the bookkeeping and software that is when accountants step in to help.

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Replying to petersaxton:
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By bernard michael
01st Sep 2021 14:07

petersaxton wrote:

"nor can we leave long term clients that have never had to think about bookkeeping and software to struggle with it's onerous provisions."

If client's can't cope with the bookkeeping and software that is when accountants step in to help.


....and charge
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Replying to bernard michael:
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By johnjenkins
01st Sep 2021 14:35

Wasn't one of HMRC's comments that the extra charge to tax payers for MTD would be miniscule and that charge would be saved by less errors?

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Replying to bernard michael:
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By johnjenkins
01st Sep 2021 14:38

hiccups

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Replying to bernard michael:
By petersaxton
01st Sep 2021 14:54

We charge now.

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