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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ALISK
By atleastisoundknowledgable...
29th Aug 2021 13:12

I think that’s it’s clear there are two very distinct viewpoints, depending on your client base - let’s call them Paper and Digital. This is the first thread I (and probably most) have seen hit 150 posts and 4 pages. IMO the reason for that is that Digital accountants just can’t understand Paper accountants’ position.

We purposely only have a handful of self employed and landlord clients - <15 in total. They are all micro business 1MBs who in the main give us excel workings once a year, save for a couple of landlords who provide letting agent statements. Theoretically then, it should be easy for us to just do things 4 times a year and everyone’s happy. But heres the crunch that Digital accountants don’t seem to get, we need them to actually give us the stuff. 4 months into a 9 month deadline and I’ve had 1 so far, a landlord whom I also act for his company in a VFD role. With monthly meetings, it still took him 3 months to give me his letting agent statements.
I appreciate the “well it’s a filing deadline, they’ll just have to do it”, but they won’t and/or won’t want to pay the extra fees for us doing 25% of the accounting work but 90% of the chasing/admin, 4 times a year.

Anyway, that’s my 2-pennies worth, I’m just glad we have so few self-employed clients.

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Replying to atleastisoundknowledgable...:
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By johnhemming
29th Aug 2021 13:39

Its really a question of direction of travel. Some people will find doing things on a timely basis using technology harder than others. HMRC may even give them exemption from the requirement at least for now.

However, others will find it both easy and cheap (or even less cost than they currently incur).

Should we prevent the process of change because some people cannot cope or should we give the people who cannot cope an exemption.

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Replying to johnhemming:
ALISK
By atleastisoundknowledgable...
29th Aug 2021 15:47

johnhemming wrote:

… others will find it both easy and cheap (or even less cost than they currently incur).

Less cost? To do more work? Genuine question - how did you get there?

But is it progress? Progress towards what?

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Replying to atleastisoundknowledgable...:
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By johnhemming
29th Aug 2021 16:26

I would say progress towards a tax system that is efficient, does not require a lot of work from taxpayers to comply, does not require sending all the transactions to the tax authority, and results in more people paying the right amount of tax.

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Replying to johnhemming:
By petersaxton
29th Aug 2021 16:41

"does not require a lot of work from taxpayers to comply,"
Bank feeds with attachments and explanations; accountant can do the rest.

"does not require sending all the transactions to the tax authority,"
MTD doesnt need that. I wouldn't see the point of it anyway. HMRC will eventually be able to access the records when they are in the cloud.

"and results in more people paying the right amount of tax."
There's two problems with that:
Cash received, and
International businesses.
MTD doesn't address this problem.

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Replying to johnhemming:
ALISK
By atleastisoundknowledgable...
30th Aug 2021 07:03

I theory I think most people would agree with you, however does this result in “more people paying the correct tax?”

Also, your response doesn’t address my question of how you think doing extra work (the size of that work is irrelevant) will cost less.

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Replying to johnhemming:
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By Jimess
01st Sep 2021 11:38

For me it's not all about the ability to cope - I suspect a lot of clients - particularly of the older generations, will see it as an infringement of their rights to decide how best to carry out their bookkeeping work. Yes there are accounting rules but I think most people would agree that in any accounting practice there are hardly any clients who do things in exactly the same way. To me that is what makes life in accounting practice that bit more interesting, because you can tell a lot about your clients from their approach to their bookkeeping. If a trader has very competently maintained his books manually for many years and balances them to the jot every week - what right has anyone to say that he is not maintaining his accounting records correctly - not me, not you and certainly not a software house.

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Replying to Jimess:
By petersaxton
01st Sep 2021 12:07

"If a trader has very competently maintained his books manually for many years and balances them to the jot every week - what right has anyone to say that he is not maintaining his accounting records correctly - not me, not you and certainly not a software house."

Nobody is saying that. They are saying things need to change. You may not agree with what is proposed but there's no need to make statements that have no basis in fact.

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Replying to atleastisoundknowledgable...:
blue sheep
By NH
29th Aug 2021 13:40

atleastisoundknowledgable... wrote:

I think that’s it’s clear there are two very distinct viewpoints, depending on your client base - let’s call them Paper and Digital. This is the first thread I (and probably most) have seen hit 150 posts and 4 pages. IMO the reason for that is that Digital accountants just can’t understand Paper accountants’ position.

I think the reality is the majority of us have a mixture of both digital and paper, personally I would love to be all digital but we are not there yet, and with some we never will be or need to be.

But regarding chasing for information, we have found with VAT, it all depends on the systems you put in place, for example we say to clients this is what we need and this is when we need it, we have an automated email system that sends out multiple reminders and quite frankly if they do not respond to that, the work will not get done, we are certainly not going to be making 500 phone calls every 3 months

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Replying to atleastisoundknowledgable...:
By petersaxton
29th Aug 2021 14:23

"But heres the crunch that Digital accountants don’t seem to get, we need them to actually give us the stuff. "
I've regularly said that the important thing is for the client to give the accountant the documentation or to do it themselves. I've also said that if clients wont make the effort to co-operate then they deserve the penalties they will receive. I'm not going to worry about achieving deadlines if clients wont ensure I have the data to work from promptly.

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Replying to atleastisoundknowledgable...:
Quack
By Constantly Confused
31st Aug 2021 09:24

atleastisoundknowledgable... wrote:

This is the first thread I (and probably most) have seen hit 150 posts and 4 pages.

I respectfully draw attention to my old thread ;)
https://www.accountingweb.co.uk/any-answers/accounting-jokes

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By petersaxton
29th Aug 2021 15:48

It seems like several people who dont like MTD for ITSA are coming up with straw man arguments. They claim that accountants who think that problems can be overcome are saying things like "Bank feeds will solve everything" or "It's only 5 submissions that are needed". We would be better off discussing real problems and real solutions.

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Replying to petersaxton:
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By Hugo Fair
29th Aug 2021 16:09

"We would be better off discussing real problems and real solutions."

True. However there have been rather a lot of the former ... but little sign of the latter (in terms of addressing the problems raised - as opposed to things that may be 'nice to have' but still leave the stated problems front and foremost).

Wikipedia:
"A straw man is a form of argument and an informal fallacy of having the impression of refuting an argument, whereas the real subject of the argument was not addressed or refuted, but instead replaced with a false one."
Ring any bells?

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Replying to Hugo Fair:
By petersaxton
29th Aug 2021 16:25

"Ring any bells?"
Definitely. I saw somebody saying that people have said that bank feeds will solve all problems. Another said that I thought the only problem was submitting five returns a year.

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Replying to petersaxton:
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By Hugo Fair
29th Aug 2021 17:08

Your sense of irony seems to be as light-touch as your detailed reading of who said (as opposed to inferred) what. But you've determined to be an immovable object, so (again) I'll leave you to pontificate whilst ignoring the concerns raised by others.

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Replying to Hugo Fair:
By petersaxton
29th Aug 2021 17:32

Didn't you say: "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 petersaxton:
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By Hugo Fair
29th Aug 2021 19:48

Yes, and I meant it ... despite your snide (and uncalled for) response of "A very wise move"!
But your post today in which you say "people who don't like MTD for ITSA are coming up with straw man arguments" was IMO a step too far to ignore.
Rebuttal as a means of point-scoring is not the same as addressing the concerns raised by others ... who can't all simply be wrong (even 'idiotic') just because they don't agree with everything you say.

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Replying to Hugo Fair:
By petersaxton
29th Aug 2021 20:40

You meant it - but not enough to carry it out!
I've seen people claim that I only think that MTD will result in 5 button presses rather than one. This is despite me clearly discussing a lot more.
Somebody suggested that an accountant would have to log into each client's software every day rather than the reality of logging into the accountant's software once to see all client's bookkeeping.
I would suggest that you discuss the reality rather than straw man arguments.
By all means state you are going to do something and then dont do it but dont expect me to be impressed.

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By User deleted
29th Aug 2021 17:23

There's one thing missing here (unless I've missed it when scanning the posts)

Why is this being made compulsory? If the digital worshippers think their products are so great then fine. But there's a reason not everybody has flocked to them yet.

There should be a system where people can join MTD if they want and see an up to date position each quarter. But for those who don't want that (e.g. micro businesses) why the forced push into it?

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Replying to User deleted:
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By BIGWAL
29th Aug 2021 19:16

Why is this being made compulsory

Simple . Because despite constant deniala HMRC are aiming for quarterly tax payments. I wouldn't necessarily disagree with that given the state of the country's finances, but it'the deceit and arrogance in not being upfront about it.

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Replying to BIGWAL:
By petersaxton
29th Aug 2021 20:22

BIGWAL wrote:

Why is this being made compulsory

Simple . Because despite constant deniala HMRC are aiming for quarterly tax payments. I wouldn't necessarily disagree with that given the state of the country's finances, but it'the deceit and arrogance in not being upfront about it.


What is your evidence for that belief?
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Replying to petersaxton:
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By Hugo Fair
29th Aug 2021 20:37

HMRC Timely Pay (call for evidence - closed 13 July 2021):
https://assets.publishing.service.gov.uk/government/uploads/system/uploa...

4.19. As announced in July 2020, from April 2023, MTD will be extended to ITSA for businesses and landlords with income over £10,000. Those within scope will be required to keep digital records and make quarterly reports of income and expenses (by one month after the end of each quarterly period).
Although the government recognises that more regular reporting under MTD need not lead to more frequent payment, that regular reporting could enable taxpayers to have a more up-to-date view of their tax affairs, and provide options for in-year tax payments to be based on the current year liability.

Given the overarching topic of the paper, that final clause is pretty clear evidence of intentions.

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Replying to Hugo Fair:
By petersaxton
29th Aug 2021 20:48

It certainly does. Would HMRC come up with some calculation for a year's tax based on dividends and employment as well as self employment and property income? Given the mess they have made with SEISS grants I can imagine a lot of chaos.
I remember when they started this API thing. A client had three sources of income totally £40k and they somehow converted that to THREE sources of income of £40k each!

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Replying to petersaxton:
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By Hugo Fair
29th Aug 2021 21:14

It's an "interesting" 52-pages ... mostly fairly anodyne but with quite a few horrors slipped in. For instance:

4.15. Alternatively, the payments could be based on estimates of the taxpayer’s liability for that year, similarly to how most people pay for gas or electricity by direct debit. For these bills, the amount is calculated by suppliers, who estimate the consumer’s annual usage and spread it across twelve months (or four quarters if the consumer is paying quarterly). The amount consumers pay may not reflect the amount of energy they have used during that period due to fluctuations in energy usage (e.g. using more central heating during winter months). Therefore, consumers can build up credits or debits on their account; if consumers regularly under- or over-pay the provider could increase or decrease the payments to better reflect the usage.

So that proposal would allow HMRC (not the taxpayer) to vary DD amounts ... with no problem getting a disagreement resolved timeously (inc repayment by HMRC)?

AND

4.17. The government is keen to engage on other alternatives to bring payment closer to the point of transaction, and welcomes discussion on these.

Well that couldn't be clearer!

AND

4.29. Depending on the design of any system for more timely payment of tax, it may be helpful for some taxpayers within the scope of MTD to provide more frequent updates than required under MTD. For instance, if payments were made on a monthly basis, some taxpayers within MTD might wish to send monthly updates of income and expenses to make sure that their monthly instalments were based on the very latest view of their tax position.

I think (hope) they're getting over-excited now!

Anyway I won't reveal any more spoiler alerts ... but, however unlikely some of this blue-sky thinking is to reach fruition (Centralised Deductions pre-RTI anyone), you can see why people are nervous about uncommunicated plans.

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Replying to Hugo Fair:
By petersaxton
29th Aug 2021 21:37

HMRC could come up with monthly payments on account in the same way they do 6 monthly payments on account now. They wouldn't need to do MTD for that.

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Replying to petersaxton:
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By DKB-Sheffield
30th Aug 2021 00:03

petersaxton wrote:

Would HMRC come up with some calculation for a year's tax based on dividends and employment

Dividends... CT for a starter. PoA and Tax Code too. And 'yes' I'm certain real time reporting of dividends is only a short time away. Rishi Sunak did suggest as much on 26 Mar 2020!

Employment... PAYE (particularly now it's under RTI) should provide this? If I understand correctly, I believe tax is deducted and paid at source. Admittedly, all employers do not comply!

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Replying to DKB-Sheffield:
By petersaxton
30th Aug 2021 09:15

Imagine HMRC getting dividends, interest received, employment income, self employed income and property rental income all accurate.!

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Replying to BIGWAL:
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By User deleted
29th Aug 2021 21:40

But they could request quarterly payments on account under the current system.

Maybe introduce the option to voluntarily give accurate in-year figures if somebody so wants.

No different to the utility bill scenario, pay a monthly DD based on estimates (ignore those with smart meters before somebody corrects me!) and submit readings when you want to if you want a more accurate bill. But the choice is yours.

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Replying to User deleted:
By petersaxton
29th Aug 2021 21:46

They still just take estimated payments even if you have a smart metre. The smart metre provides actual bills quarterly. Because gas and electric varies greatly throughout the year they choose a monthly amount which will near enough match a years worth of actual bills.

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Replying to petersaxton:
boxfile
By spilly
01st Sep 2021 01:03

I don’t think they would go to those lengths.

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Replying to petersaxton:
boxfile
By spilly
01st Sep 2021 01:04

sorry - duplicate.

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By bernard michael
31st Aug 2021 09:25

We normally have 9-10 months to complete annual work eg SAR's /accounts. for clients with varying year ends Now we will be expected to produce a return within a month after the quarter end where a lot of the quarters have the same calendar months. This is in addition to the annual work
It doesn't take much thought to realise that the compression of work will be unsustainable in the time available. In addition it totally depends on client willing cooperation, which in the small business sector is often sadly lacking when it comes to producing information for HMRC

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Replying to bernard michael:
By petersaxton
31st Aug 2021 11:06

"We normally have 9-10 months to complete annual work eg SAR's /accounts. for clients with varying year ends Now we will be expected to produce a return within a month after the quarter end where a lot of the quarters have the same calendar months. This is in addition to the annual work"
Bank feeds cut down the work. Clients can attach documents and explain transactions or they can let the accountant do it. Now we have four months to ensure a quarter of the work is done. I know the first month is the same month as the month after the period end but you still have more time to do the work. Although I accept that if the client doesn't do much it's a lot more work.

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Replying to petersaxton:
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By DKB-Sheffield
31st Aug 2021 15:10

petersaxton wrote:

Now we have four months to ensure a quarter of the work is done. I know the first month is the same month as the month after the period end but you still have more time to do the work.

Peter,

Aside from the fact we are never going to agree on if, or how much additional work is required, you must surely accept that some clients and practices will require incrementally more time than others. Contributors who know their client base a little better than you do (assuming you do not have an intimate knowledge of their practices) are as entitled to point out that, in their opinion, additional work will be required, and that the said work is likely to be X times as much.

Of course, when the day comes (and only then) it may be that they are wrong. With improved systems and procedures, they may able to cut that incremental time in half. It may also be possible that you have underestimated the level of additional work required and find you need additional time to comply with what is as yet, relatively fluid guidance.

In the meantime, I would kindly ask that you refrain from correcting everyone's viewpoints - simply because they don't operate in the way you do. They may have clients who will never adapt to Xero, or they may be unwilling to terminate client relationships because they do not wish to use Xero (or face the prospect of being charged a lot more). Just because you don't agree, does not put you in any position to tell any contributor that they are wrong (i.e. they clearly don't have a clue about their clients or how to manage practice).

As for my quote referencing your post...

It is not correct to suggest 1/4 of the work is completed in four months as opposed to 10. Either use the 4 months as opposed for 22 months (to do ongoing preparatory work), or 1 month as opposed to 10 (to finalise and file the return). Would you say we have 21 months to file accounts and 24 months to file a CT600?

Bernard is correct, we normally have 9/10 months to COMPLETE annual work. In that vane, we will have 1 month to COMPLETE quarterly work. Completion is not the same as providing ongoing services and, tbh many practitioners do not want to take on "high effort, low return" daiily/ weekly bookkeeping for every client. They are interested in reviewing, scheduling, COMPLETING and filing returns based on what the client provides (and in whatever format they provide it). If they do this 4 times per annum instead of once, this will be more time consuming - no matter how simple the task may be.

Furthermore, and as you have aluded to (and then backtracked), there is no MORE time to do anything. Under MTDITSA, there will not be 4 x 4-month quarters. MTD does not, to my knowledge, include a shift away from the Gregorian calendar to a 16-month year. Nor have I heard anything to suggest there will be 32 hours in a day. It may be that, with a shift to quarterly reporting the quarterly submissions will lead to a much simpler annual SATR. However, that will assume quarterly submissions are prepared with the same degree of accuracy and completeness of that said SATR (suggestions by many surrounding 'balance sheet' matters are that, to make things simpler and quicker, this will not be the case/ or indeed won't be required)

Whilst you are entitled to your opinion, and whilst it may well be entirely justified in your specific case, others are entitled to their own opinions too which may well be equally justified. Your constant suggestions that; everyone else is wrong; they should use Xero; those who don't use cloud software, bank feeds and document images; are, by result, ill-prepared, non-compliant, dinosaur accountants, is neither true, nor fair!

Finally, the issue here is MTDITSA and whether it will have an impact on advisors (and ultimately taxpayers). It is not, to my mind an issue of "who is the better tax advisor - the one using Xero,or the one who doesn't". Cloud accounting has clear benefits but it isn't beneficial to all. Indeed, some I have considered for clients are so expensive (>£1,000 pcm for 6 companies) that a desktop solution is the only viable option. Many believe there will be a significant impact. The impact may be more time required by advisors/ clients, it may be increased cost. Whether that cost, or additional time is passed onto the taxpayer (increased fees, mode involvement in bookkeeping, learning a new 'language' i.e. Xero) is for individual practices (and their clients) to decide.

The moral... MTDITSA will affect every taxpayer, and every advisor differently. Constantly correcting the assessment of intelligent, experienced professionals by telling them their assessement is "wrong" (as opposed to disagreeing) is extremely unhelpful, and quite honestly, disrespectful!

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Replying to DKB-Sheffield:
By petersaxton
31st Aug 2021 18:28

"In the meantime, I would kindly ask that you refrain from correcting everyone's viewpoints - simply because they don't operate in the way you do. They may have clients who will never adapt to Xero, or they may be unwilling to terminate client relationships because they do not wish to use Xero (or face the prospect of being charged a lot more). Just because you don't agree, does not put you in any position to tell any contributor that they are wrong (i.e. they clearly don't have a clue about their clients or how to manage practice)."

Of course you can "kindly ask" but I'm still going to suggest a better way of work if I think it's better. Some people may be used to not starting work until the period has ended but that doesn't seem sensible if they then say that a month isn't enough time.

If MTD for ITSA requires more work done I have no sympathy with clients who say "I don't care if things need to change. I am not paying more."

"Just because you don't agree, does not put you in any position to tell any contributor that they are wrong"

You don't seem to see the irony in telling me I am wrong.

Soon enough we will see who is successful and who fails. If some accountants want to use a lot of different software and try to fit three months accounting into one month of work then we can see if that works for them.

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Replying to petersaxton:
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By DKB-Sheffield
31st Aug 2021 19:13

petersaxton wrote:

You don't seem to see the irony in telling me I am wrong.

Not certain there is?

You have continually told contributors (myself included) that their analyses of how significant extra time will be required for their clients and their practices to comply with MTDITSA is wrong. Based - not on knowledge of their own client base or the setup (and expertise) of their practice, but on the fact they do not use Xero or work in the way you have chosen to work with (or in some cases against - i.e. they should find another accountant) your clients.

Where I believe you are in the wrong is by telling those self-same intelligent, experienced, professionals that they are incorrect in their impact assessment because they are using the wrong tools, software, have an incorrect approach, are change-averse, or accept clients you may not. This takes no account of the many factors that may have led to to those assumptions. I find that disrepectful patronising, and yes, I find it "wrong".

Throughout this entire thread I have maintained that there will be an impact to my clients/ practice - and yes there will be a time impact as I will not reduce my standards or cut corners. I don't doubt for one minute that your practice will have less, or no impact whilst maintaining the same standards. However, I do not feel telling fellow professional they are 'wrong', have the 'wrong approach', or use the 'wrong software' is helpful, advisory, or constructive.

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Replying to DKB-Sheffield:
By petersaxton
31st Aug 2021 19:25

"Based - not on knowledge of their own client base or the setup (and expertise) of their practice, but on the fact they do not use Xero"

Can you show me where have I said that accountants have to use Xero or if they dont use it they are wrong?

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Replying to petersaxton:
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By DKB-Sheffield
31st Aug 2021 20:16

Okay, ignore "Xero", say "cloud accounting software".

You have been very vocal elsewhere in this, and related elthreads that Xero is the only software you use. It is perfectly rational to guess that by "cloud accounting software" you are referring to Xero!

Either way, those that choose to use other methods, ones that work for their clients, and for whatever reason ones that work better (and possibly more efficiently) for them, do so for a reason.

It may seem inefficient to you, but to someone else who has practised for 30-40 years, moving to cloud accounting, and taking their 55-75 year old clients in that direction, may actually be less efficient. Yes, it may take 2/ 3/ 4 times as long. Yes, that may be what they are saddled with. That is their professional judgement and it is for neither you, nor I, to tell them they are wrong.

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Replying to DKB-Sheffield:
By petersaxton
31st Aug 2021 20:55

"Okay, ignore "Xero", say "cloud accounting software".

You have been very vocal elsewhere in this, and related elthreads that Xero is the only software you use. It is perfectly rational to guess that by "cloud accounting software" you are referring to Xero!"

That's nonsense and you know it is. You just are embarrassed that you have been caught out. People can use other software if they want. I've never criticised anybody for using other software. I have asked what is better about the software they have chosen but so far nobody has come up with a reason except to say it might be cheaper. I am still happy to pay £5 (before discounts) for non-VAT and non-sales invoice software each month.

"Either way, those that choose to use other methods, ones that work for their clients, and for whatever reason ones that work better (and possibly more efficiently) for them, do so for a reason."

Can you give an example of what it is that one of your chosen software products works better and more efficiently?

"It may seem inefficient to you, but to someone else who has practised for 30-40 years, moving to cloud accounting, and taking their 55-75 year old clients in that direction, may actually be less efficient."

What does the age of their clients have to do with what software the accountant uses? Their clients should still be capable of sending documents to their accountants. Surely they do that now for the year end accounts they just have to do it more regularly? This is from somebody who started in practice 44 years ago as you seem to think it's relevant.

"it is for neither you, nor I, to tell them they are wrong."

Where have I said anybody else is wrong?

Before you answer that let me pre-empt your likely response. I will guess it's along the lines of me suggesting a better way indicates that I think they are wrong. That seems pretty much like when you suggest your way is better than mine.

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Replying to DKB-Sheffield:
By petersaxton
31st Aug 2021 19:28

"I don't doubt for one minute that your practice will have less, or no impact whilst maintaining the same standards. "

Why do you think I will have less or no impact? I am simply saying that I have looked at the new rules and decided how I am going to comply. Obviously I will assess things over time.

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Replying to petersaxton:
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By DKB-Sheffield
31st Aug 2021 20:32

I don't think there are any of us who will choose not to comply! Nor do I think there are any of us who will not find a way to comply. How, they do that, is their (and my) decision.

As for why I think this will have less, or no impact on you, I'm perhaps referring to... less than double/ triple/ quadruple the time - suggestions you have ardently criticised.

If you are saying this will (maybe) have an impact, but perhaps don't yet know how much (?), please don't criticise those who consider putting a time (or time multiplier) against that - they know their benchmark, their client base, their infrastructure, their staff capability, their approach.......

For what it's worth, I believe there are a proportion of clients for whom the work will be quadruple the level it is now (maybe higher). There are clients for whom MTD may result in the same, or less work. It should therefore follow that impact on practices may also vary from less to quadruple!

How all of this will then affect the unrepresented taxpayer... who knows?

Anyway, I give up! You win! But please treat others with the respect they deserve - particularly if you don't know who they are, how they practice or who their clients are!

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Replying to DKB-Sheffield:
By petersaxton
31st Aug 2021 21:04

When have I not treated anybody with respect? You seem to be very sensitive to anybody having a different view to you. Along the lines of "don't suggest a better way to do something because it upsets me". I really dont see what is wrong with suggesting things like start on the accounting on day one rather than after 3 months as some have suggested.

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7om
By Tom 7000
31st Aug 2021 10:51

We have
350 Self employed jobs in carrier bags.
250 BTL landlords in carrier bags.

Its not that you have to do them every quarter, its probably going to be like vat returns in as much as you have to process the prior quarter in the following 30 days

This means 4 manic months a year and 8 months of doing nothing. Which makes it difficult to budget a smooth flow of work

2 or 3 hours work extra a quarter? lets say 2.5 ... for a charge of £125+vat each extra? Clients fees are effectively trebling

600 jobs at 2.5 hours = 1500 hours to run out in one month. 150 hours in a working month for one person

so I need 10 extra people for 4 months a year and then no work for them in the other months.

So If I pull the 30 staff off the other jobs to do bookkeeping.

Then hire more staff to pick up the overflow. So thats 1500 hours 4 x a year = 6000 hours. I need 3 more full time staff and a supervisor to drag the work in.

Staff cost average 40k x 4 = 160k
overheads 56
total cost 210k

Fee income 600 x 4 x 125 = 300k

Now the big question s are

1. What will a client used to paying 250+ say when you tell them its now 750+
2. But the bigger question is where am I going to find four competent people to do all this..when its hard emough finding them now and the whole world will want them in 2 years . my thoughts are take on a couple of trainees now and get them trained up cracking this out....

Thanks (2)
Replying to Tom 7000:
blue sheep
By NH
31st Aug 2021 11:08

Tom 7000 wrote:

We have
350 Self employed jobs in carrier bags.
250 BTL landlords in carrier bags.

Its not that you have to do them every quarter, its probably going to be like vat returns in as much as you have to process the prior quarter in the following 30 days

This means 4 manic months a year and 8 months of doing nothing. Which makes it difficult to budget a smooth flow of work

2 or 3 hours work extra a quarter? lets say 2.5 ... for a charge of £125+vat each extra? Clients fees are effectively trebling

600 jobs at 2.5 hours = 1500 hours to run out in one month. 150 hours in a working month for one person

so I need 10 extra people for 4 months a year and then no work for them in the other months.

>

Which will never work, which is precisely why IMHO and as others have suggested on the thread that you need to be putting your systems in place so that you can spread the work over 12 months not 4

Thanks (1)
Replying to Tom 7000:
avatar
By bernard michael
31st Aug 2021 11:11

Tom 7000 wrote:

We have
350 Self employed jobs in carrier bags.
250 BTL landlords in carrier bags.

Its not that you have to do them every quarter, its probably going to be like vat returns in as much as you have to process the prior quarter in the following 30 days

This means 4 manic months a year and 8 months of doing nothing. Which makes it difficult to budget a smooth flow of work

2 or 3 hours work extra a quarter? lets say 2.5 ... for a charge of £125+vat each extra? Clients fees are effectively trebling

600 jobs at 2.5 hours = 1500 hours to run out in one month. 150 hours in a working month for one person

so I need 10 extra people for 4 months a year and then no work for them in the other months.

So If I pull the 30 staff off the other jobs to do bookkeeping.

Then hire more staff to pick up the overflow. So thats 1500 hours 4 x a year = 6000 hours. I need 3 more full time staff and a supervisor to drag the work in.

Staff cost average 40k x 4 = 160k
overheads 56
total cost 210k

Fee income 600 x 4 x 125 = 300k

Now the big question s are

1. What will a client used to paying 250+ say when you tell them its now 750+
2. But the bigger question is where am I going to find four competent people to do all this..when its hard emough finding them now and the whole world will want them in 2 years . my thoughts are take on a couple of trainees now and get them trained up cracking this out....


Surely your 4 manic months is true if they all have the same quarter ends or will they become statutory. Also what about the period when you're doing annual work
Thanks (1)
Replying to bernard michael:
avatar
By Hugo Fair
31st Aug 2021 11:44

See the proposed changes to basis periods (in several other threads on here)!

Thanks (1)
Replying to Hugo Fair:
avatar
By bernard michael
31st Aug 2021 12:05

[quote=Hugo Fair]

See the proposed changes to basis periods (in several other threads on here)!

[/quote

Thanks I missed those

Thanks (0)
Replying to bernard michael:
By petersaxton
31st Aug 2021 13:27

The base period is for the year. You can still stagger return periods and in fact have shorter return periods. I wont be messing about like that.

Thanks (0)
Replying to petersaxton:
avatar
By Jo Nokes
31st Aug 2021 14:54

It's all very well to suggest you can stagger basis periods, but the fact is, most adopt a 31 March year end so the result is going to be a lot of work in July, October etc. Yes, you can do the work from month 1, but it is less cost effective to open the files three times a quarter, rather than once every quarter. Small amounts of extra time mount up. And i am still waiting to find out how you process the ed of year return when your clients use different software. i don't think it's viable to stick everyone on Xero.

Thanks (1)
Replying to Jo Nokes:
By petersaxton
31st Aug 2021 18:13

Of course you can only work on a client for a month rather than spread the work over four months but you only have yourself to blame if you then say you are too busy that month.
I think it's viable to have all my clients using Xero. I dont want to spread my work over several software packages. I just wont be as efficient on them all.
I'm not sure what your point is regarding the end of year return. I don't know whether you mean the 5th MTD return or the yearly tax return or company accounts.

Thanks (0)

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