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 johnjenkins:
By petersaxton
16th Sep 2021 10:20

I agree that HMRC are pretty hopeless in their approach, but if accountants allow their clients to enter silly figures then it will just make more work for the accountant at the year end. It would be better if clients enter correct information but incomplete. I still think accountants should ensure that sales invoices and bank transactions should be posted at the very least. That will mean there's very little work to do at the year end.

I've got a self employed non-VAT client to use Xero from 01/04/20 and he's already seeing how easy it makes it for both himself and me.

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Replying to petersaxton:
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By johnjenkins
16th Sep 2021 10:45

It's not a question of "allowing" our clients to enter silly figures, most will, however much you try to train them. How is it more work at the end of the year? You still have to check that their figures are correct. So my view is to carry on as normal. Yes I've got clients that are spread sheet savvy, but I've also got clients that, not only haven't got a clue, they don't see the need for it as their tax bill is based on the yearly amendment that we put in. Quarterly updates for the small self-employed is a total waste of time and money. We know it, HMRC know it and most MP's by now know it. It's just a question of time before someone in Government realises what a big [***] up it is and has the guts to do something about it.

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Replying to johnjenkins:
By petersaxton
16th Sep 2021 11:17

"It's not a question of "allowing" our clients to enter silly figures, most will, however much you try to train them."

This is getting silly now. If the clients are incapable of explaining the bank feeds then the accountant should do the explaining. There's not going to be many accountants stupid enough to decide to get their client's to do the bookkeeping when they are incapable of doing it properly.

"How is it more work at the end of the year?"

If there's a lot of entries wrong which have already been submitted in the totals in the quarterly returns then as well as putting in the correct transactions an accountant will have to reverse the incorrect transactions. This is more work than the accountant explaining transactions properly, maybe help by using bank rules. I think most accountants will understand why this is more work though. It will only be a shock to those accountants who don't understand bookkeeping.

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Replying to petersaxton:
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By johnjenkins
16th Sep 2021 14:07

Sorry I don't live in a perfect bubble like you do.

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Replying to johnjenkins:
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By Latinaid
16th Sep 2021 11:23

johnjenkins wrote:

If this does carry on then the Tories WILL get a big shock at the next election (I'm not saying any other party will change MTD but Boris will bare the brunt).

Maybe there's an upside to MTDITSA after all

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Replying to Latinaid:
By petersaxton
16th Sep 2021 11:35

There's not enough people worried about MTD for it to make any difference at any general election.

I doubt whether Labour, with their obsession with identity politics and transsexuals, will be elected again.

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Replying to petersaxton:
neand
By neanderthal
16th Sep 2021 12:25

hi. are you sure that, as soon as business owners and anyone else affected by this farce realise what the gvt is doing to them, putting all this pressue on them, not enough people will still be not bothered and worried? what they are trying to do to hard working people i doubt if takes place anywhere else. Turning real people (accountants and taxpayers) into robots? people have personal lives and problems too. seriously? this farce is not workable; end of.

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Replying to neanderthal:
RLI
By lionofludesch
16th Sep 2021 12:42

neanderthal wrote:

hi. are you sure that, as soon as business owners and anyone else affected by this farce realise what the gvt is doing to them, putting all this pressue on them, not enough people will still be not bothered and worried? what they are trying to do to hard working people i doubt if takes place anywhere else. Turning real people (accountants and taxpayers) into robots? people have personal lives and problems too. seriously? this farce is not workable; end of.

I don't think it's a big enough vote-loser. There aren't that many self employed. Plenty of entrepreneurs trade through companies. A lot will be using software already. Some of the rest will handle software OK. The problem ones will be the smaller, often one-man,businesses who may well not vote for the Tories anyway.

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Replying to lionofludesch:
neand
By neanderthal
16th Sep 2021 14:48

probably this is the reason they are rolling out this nonsencical farce in steps - first the self-employed and after a couple of years the ltd. that way they may get away with it.

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Replying to neanderthal:
By petersaxton
16th Sep 2021 21:00

"first the self-employed and after a couple of years the ltd."

You seem to have totally forgotten about VAT registered over £85k and remaining VAT registered. There will be at least four stages. The obvious reason for this is to reduce any work load for accountants.

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Replying to lionofludesch:
By petersaxton
16th Sep 2021 20:56

"The problem ones will be the smaller, often one-man,businesses"

These are the ones who will ask their accountant to do the work.

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Replying to petersaxton:
RLI
By lionofludesch
16th Sep 2021 21:09

petersaxton wrote:

"The problem ones will be the smaller, often one-man,businesses"

These are the ones who will ask their accountant to do the work.

As I said, their accountant may say no.

What then ?

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Replying to lionofludesch:
By petersaxton
16th Sep 2021 21:12

Get another accountant

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Replying to petersaxton:
RLI
By lionofludesch
16th Sep 2021 21:23

petersaxton wrote:

Get another accountant

I don't think there will be enough. There's not enough bookkeepers and accountants to cover the work

Now what ?

Keep burying your head in the sand. It's OK - not your problem. It's some poor taxpayer's problem.

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Replying to lionofludesch:
By petersaxton
16th Sep 2021 23:05

There's plenty of accountants who are organised to use online bookkeeping.

The accountants who can't deal with the variety of taxpayers are the ones who will lose their clients to the accountants with the right attitude.

The accountants with their heads in the sand are the ones who panic whenever there's any change.

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Replying to petersaxton:
RLI
By lionofludesch
16th Sep 2021 23:37

petersaxton wrote:

There's plenty of accountants who are organised to use online bookkeeping.

The accountants who can't deal with the variety of taxpayers are the ones who will lose their clients to the accountants with the right attitude.

The accountants with their heads in the sand are the ones who panic whenever there's any change.

No need for accountants to panic. If there's too much work they can always exit a few clients.

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Replying to Latinaid:
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By johnjenkins
16th Sep 2021 14:08

PML

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Replying to petersaxton:
paddle steamer
By DJKL
15th Sep 2021 11:08

How, only totals are being transmitted to HMRC re MTD for vat, is MTD IT sending individual details of each transactions?

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Replying to DJKL:
By petersaxton
15th Sep 2021 18:26

Nobody is "sending" individual transactions. I am sure the next stage of MTD will be HMRC accessing data on the server.

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Replying to petersaxton:
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By Hugo Fair
15th Sep 2021 19:23

By "the server" presumably you only mean any located in the 'cloud'? So the rest of us, who use our own physical servers accessed via VPNs or whatever, will remain invisible to HMRC snoopers ... although I'm not sure whether you regard that as a sensible thing to do or as being almost treasonable.

Not that it matters because the likelihood of Parliament allowing any UK govt the powers necessary to farm data from private citizens/companies, unfettered by a claim that it is required for reasons of national security, is similar to the survival chances of a snowball in hell.

I quite like the chutzpah with which you move from demanding that others quote their sources to blithely repeating something (again & again) of which you are merely 'sure' ... but why are you so convinced of this being the end-point for MTD (and HMRC in general)?

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Replying to Hugo Fair:
By petersaxton
15th Sep 2021 20:55

"By "the server" presumably you only mean any located in the 'cloud'? So the rest of us, who use our own physical servers accessed via VPNs or whatever, will remain invisible to HMRC snoopers ... although I'm not sure whether you regard that as a sensible thing to do or as being almost treasonable."

What is the difference between a server owned by Xero or a server owned by an accountant?

"will remain invisible to HMRC snoopers"

It would appear that you are totally ignorant of the powers of HMRC to access information. They don't need a national security angle to access information from taxpayers. I'm sure that any legislation enabling HMRC to access digital bookkeeping records will include access to the records of accountants who think they are being clever.

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Replying to petersaxton:
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By Hugo Fair
15th Sep 2021 21:57

At the start of this sub-thread you said "HMRC can look at accounting servers to do inspections" as part of the justification of MTD - "I've given at least one valid reason".

I took this to mean that HMRC (without notifying individual taxpayers) could trawl thousands or millions of servers - presumably using AI bots to identify potentially 'odd' transactions or more likely trends in data - as a means of turning their enquiries into targeted rifle-shots instead of shoot-and-hope random efforts. This is technically quite feasible - but only where they could access the servers without taxpayer permission (which would be those held in the cloud) and only if they had the powers to do this ... which they don't.

If you merely meant that they could be given permission by an individual taxpayer to access their server on-line, then this is already an option (i.e. is neither enabled by nor made easier because of MTD). In practice, this facility is used not a lot and only as a precursor to possibly commencing an investigation - not to randomly trawl for potential targets.

FWIW any client of mine that gave HMRC permission to directly login to their server would be instantly removed from my books. Not because there is anything to hide, but because there's no single common data standard - so the likelihood of HMRC screuuing up some live data is only exceeded by the near certainty that they wouldn't understand what they were looking at.

Bots would be a much better idea, but we haven't yet (and may never) accept the type of central control/diktat of, say, the Chinese!

P.S: You really must get a hold of your tendency (nay need) to have the last word ... and try to desist from phrases like "you are totally ignorant". A psychiatrist would have a field day!

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Replying to Hugo Fair:
By petersaxton
16th Sep 2021 08:04

"FWIW any client of mine that gave HMRC permission to directly login to their server would be instantly removed from my books. Not because there is anything to hide, but because there's no single common data standard - so the likelihood of HMRC screuuing up some live data is only exceeded by the near certainty that they wouldn't understand what they were looking at."

You really need to learn about the concept of read only access.

When you start to understand the notion of "national security" you will not get so excited about compliance checks.

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Replying to Hugo Fair:
By petersaxton
15th Sep 2021 21:08

https://www.gov.uk/vat-record-keeping

"HMRC can visit your business to inspect your record keeping and charge you a penalty if your records are not in order."

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Replying to Hugo Fair:
By petersaxton
15th Sep 2021 21:15

"I quite like the chutzpah with which you move from demanding that others quote their sources to blithely repeating something (again & again) of which you are merely 'sure' ... but why are you so convinced of this being the end-point for MTD (and HMRC in general)?"

You dont seem to understand the difference between people saying HMRC have said something (a past event) to somebody's opinion of what will happen in the future. If HMRC have indicated something it is sensible to ask for a link so that context can be evaluated. If somebody has an opinion it would be ridiculous to ask for a link.

Consider what happens in Brazil.
https://docs.huihoo.com/oracle/jd-edwards/enterpriseone/applications/9.1...

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Replying to petersaxton:
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By Matrix
14th Sep 2021 12:34

Where did you get the info that you could submit for any quarter (on this or another MTD thread if I recall)? ATT have just advised that all the submission quarters are the same.

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Replying to Matrix:
RLI
By lionofludesch
14th Sep 2021 12:48

Matrix wrote:

Where did you get the info that you could submit for any quarter (on this or another MTD thread if I recall)? ATT have just advised that all the submission quarters are the same.

I don't know that that's true. If you decided to have, say, a February year end, the way I read it is that your submissions run to quarter ends based on February and you'd obviously have to apportion to get your tax year basis period.

Having said that, I haven't seen anything particularly clear cut, so far. It's all been very vague. Almost as though it hasn't been thought out very well.

But it might be worth considering April or May year ends if spreading the workload is an issue for the practice. February - probably not.

Much depends on how much you can coax clients to do.

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Replying to lionofludesch:
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By Matrix
14th Sep 2021 14:32

If the changes to basis periods go ahead my understanding is that everyone’s quarter would start April 2023 and all the quarters would be the same.

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Replying to Matrix:
RLI
By lionofludesch
14th Sep 2021 22:18

Matrix wrote:

If the changes to basis periods go ahead my understanding is that everyone’s quarter would start April 2023 and all the quarters would be the same.

I read it as your quarter end is based on your accounting year. Which does not have to be 31 March.

But I don't want to be dogmatic about that ahead of a cogent set of rules.

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Replying to Matrix:
By petersaxton
14th Sep 2021 18:38

I think it was an AccountingWeb webinar. There may be conflicting views because HMRC don't seem to have sorted themselves out yet.

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Replying to petersaxton:
Tornado
By Tornado
14th Sep 2021 14:09

petersaxton wrote:

The solution would be for taxpayers who can't do it themselves - of which there will be many - to use an accountant who can do it and is willing to do it.

It's a pity that HMRC are not being realistic.

The real solution is to make MTD optional which would also be the cheapest for many people as well.

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Replying to Tornado:
By petersaxton
14th Sep 2021 14:22

That would just mean that people wouldnt do it.
It wouldn't achieve what HMRC want.
It's not a realistic option.

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Replying to petersaxton:
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By johnjenkins
14th Sep 2021 14:37

What HMRC want and what they will get will be two different things. As was all their projects other than SA, which was the only one that had the right concept.

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Replying to johnjenkins:
By petersaxton
14th Sep 2021 16:14

If people dont have the right information on accounts servers and the wrong information will be being submitted then HMRC will get penalties as well.

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Replying to petersaxton:
Tornado
By Tornado
14th Sep 2021 17:03

petersaxton wrote:

If people dont have the right information on accounts servers and the wrong information will be being submitted then HMRC will get penalties as well.

I am not quite sure I fully understand your reply but it is fair to say that any penalties imposed on HMRC will be paid from our pockets. Make more people in HMRC responsible for their actions, with appropriate personal penalties, and we would soon see a change in the way things are done.

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Replying to Tornado:
By petersaxton
14th Sep 2021 17:30

HMRC will get the penalties paid by the taxpayers for submitting wrong and late information

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