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Where are you with MTD

Update me with MTD

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I see lots of very bad press for the MTD roll out by HMRC with almost all commentators, even from the Software companies ,forseeing the HoL car crash.

Where are you with it : I have 24 affecetd clients which I informed when MTD was first announced and have encouraged since then with regular updates.

from these, 7 have received an HMRC letter in the last 7 days informing them of the 1st April deadline , out of the 24 affected 2 are compliant !

As the problem of non-compliance is caused by HMRC lack  of listening to those affected and given we are less than 30 days away from the deadline , exemption 

guidance inadequate from HMRC what are your thoughts on how to proceed as clearly the take up of the piolet is inadequate to gauge the problem SMEs face  ?

 

Replies (32)

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By adam.arca
04th Mar 2019 12:36

I'm basically nowhere with it. Have been leaving the whole issue hoping for a late U turn (at least in terms of compulsion) but that doesn't look forthcoming, so this month I really need to get the ball rolling.

I already have an ASA because of the trust registration issue, but a) have no idea what to do with it re MTD, and b) am not even convinced I could log back in (even if I knew where to look for it).

As far as I am aware, two clients have received the HMRC letter and I had one for me personally as well, so I actually seem to have done "better" on this issue than many on here.

I've had conversations with most clients (and all affected clients) over the last year or so but very few seem to have taken the issue on board. Can't blame them for that because I haven't really, either.

All clients were also emailed back in Nov and I graded them all on a risk scale. Had next to no client feedback on this but at least I've got a fig leaf for my backside.

I hate bullies and "know it alls," so I hate HMRC on this issue and strongly dislike certain posters on here telling me I "must" have a Cloud solution and "must" roll it out to all my clients right now if not 12 months ago. I'm going down the "suck it and see" approach with minimum changes to existing client records and processes because that approach mirrors the way most of my clients think.

It seems I now need to crack on with the hard work of:
* give the affected clients a call
* have a "proper" conversation
* investigate bridging software options
* find out what the clients themselves need to do
* meet and set up an interim solution

Anyone got any advances on this thought process? Anything else I need to be sorting right now? Like the OP (I think), I would really appreciate any advice / pointers from the more knowledgeable
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What would also be really helpful is if Aweb could produce an idiot's guide 1 to 10 step-by-step guide to what we need to do and think about and in what order.

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Replying to adam.arca:
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By nodrogbir
04th Mar 2019 12:52

I think you are ok with it and have done what you need. You cant force the clients to comply and you should not have too. Other Accountants are far from ready it seems . Even 365 Accountants have advised HMRC they should delay.

What I would do is write a strongly worded letter to HMRC Customer Readiness Team to tell them how poor the uptake is for your clients. The more smaller accountants that protest the more they have to listen . I would also apply for exemption ( where you are experiencing problems) I would do this in letter from as HMRC deserve as much post as possible to let them feel the stress and anxiety they cause the Tax payer . FAO : Mel Stride or Teresa Middleton markes URGENT lol :)

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By Kaylee100
04th Mar 2019 12:54

Ive written to all explaining their particular position.

We have an ASA (due to Trusts) and Ive chosen a bridging product. Weve chosen 2 main packages to advise on but will work with any clients particularly prefer.

Ive offered free interviews to all current VAT registered clients who dont currently easily comply. Ive heard from about 1/4. Those I have met with its been a useful meeting actually.

Will they all comply? Who knows, they probably will by the end of the year when things are actually up and (reliably) working. If its a car crash they will have saved themselves some hassle but, as a professional, I havent held off advising clients.

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By ireallyshouldknowthisbut
04th Mar 2019 12:57

All our clients are in excel or software, so are as compliant as they are ever going to be. They have been told this is primarily a filing issue aimed at paper based accounting systems and to ignore HMRC and dodgy adverts on the TV.

For the first quarter in June, I am actually on holiday end of July/start August, so I imagine we will just duck that one if they show up on HMRC's portal and file as we do now and then play it by ear. No point sweating over it if the client pays the right amount of tax on the right day.

Ongoing we will put all clients through one portal (eg we will use bridging on our xero clients), and our internal processes will be the same. I don't know quite how the numbers get into the bridging software yet, but it cant be that hard.

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Replying to ireallyshouldknowthisbut:
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By adam.arca
04th Mar 2019 13:17

ireallyshouldknowthisbut wrote:

Ongoing we will put all clients through one portal (eg we will use bridging on our xero clients), and our internal processes will be the same.

Just wondering what you mean by this (more out of interest really than anything else as I've currently only got one client on Xero). Won't Xero submit directly to HMRC for MTD returns? Or do you mean you'll be using bridging software regardless for your own ease so that all client VAT data is in one place?

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Replying to ireallyshouldknowthisbut:
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By Kaylee100
04th Mar 2019 13:20

Our bridging has a button to click to pick up from excel (i guess we will link the required cells) then another button to transmit. It looks really easy (apart from the cell bit which Ive yet to use as Ive not got the full package). Its an annual fee so Im doing it from 1st April in line with all our software licences.

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Replying to ireallyshouldknowthisbut:
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By legerman
04th Mar 2019 13:53

ireallyshouldknowthisbut wrote:

Ongoing we will put all clients through one portal (eg we will use bridging on our xero clients), and our internal processes will be the same. I don't know quite how the numbers get into the bridging software yet, but it cant be that hard.

If the software allows you to submit to the HMRC API I see little sense in exporting to bridging software, it's creating an extra unnecessary step imo.

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Replying to legerman:
By ireallyshouldknowthisbut
04th Mar 2019 14:17

The point is, if you have one interface, you are dealing with one set of software problems.

If we have to use Xero, Quickbooks, Kashflow, SAGE, etc etc etc etc then its a lot of different nuances to get to know which might be for one single client.

Moreover if you do it using (say) Xero, then you have problems with garbage numbers for boxes 6-9 , as well as sometimes box 2. Bash it through excel and you can make any adjustments you like, vs sitting there recoding a bunch of stuff.

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By 1 2
04th Mar 2019 13:53

Are these clients using suitable software already? If so, it'll be a 5min job on the HMRC portal, wait a few days for acceptance, then a 5min job on the software.

If they're not on suitable software yet, you/they have a bigger issue.

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By DaveyJonesLocker
04th Mar 2019 13:55

I know in my head what will need doing but not making any firm plans. Got burnt doing that for full on MTD.
Another client today (non Vat) asked what needs doing from 1st April thanks to the misinformation from QuickBooks advert.

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By legerman
04th Mar 2019 13:58

I'm ready but not doing anything until April. 1st clients don't have to be submitted by 7th August so I'm biding my time until I see whether this is a *hitstorm or a storm in a teacup. I do all my clients bookkeeping and submit VAT anyway so other than setting them up there's nothing for them to worry about.

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Replying to legerman:
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By nodrogbir
04th Mar 2019 15:41

We have a mix of clients , the ones we do the book-keeping for are not such a problem. A few clients that complete their own VAT are concerned as most do not own a computer. Those who are worst affected are mid 50s coming up to retirement and in a one man self employed business with a turnover of under £120,000. At this point all anyone is doing is entering Outputs and Inputs on Xero or Sage just to comply with the rule. Really is crazy as this was never the intention in the long term MTD vision of HMRC.

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Replying to nodrogbir:
By ireallyshouldknowthisbut
04th Mar 2019 16:26

If all they are doing is "quarter books", why not do that in excel?

Waste of a subscription, and a misunderstanding of what is required otherwise.

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Replying to ireallyshouldknowthisbut:
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By GHarr497688
04th Mar 2019 18:03

embarrassed to say for one reason or another we dont know how to use a spreadsheet :(

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By Kaylee100
04th Mar 2019 17:32

Well, after today, I can guarantee there will be more errors not less under MTD.

First client had all sorts off issues the main one being he picked accrual accounting not cash, on moving to digital. Another was recording credit notes but they werent being allocated as refunded against invoices. It would have eventually worked itself out through bank but he literally cannot understand the system to record them that he is using. The last partnership are really trying but starting now not at year end (31st July) and they are in a right pickle as they supply lots of people with same names (small community) and are having problems with cash v accrual accounting too. Apparantly the system isnt loading properly on their poor broadband at home.

Ive done 6 hours of entirely unnecessary MTD discussions today. At what cost to whom?

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Replying to Kaylee100:
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By GHarr497688
04th Mar 2019 18:07

we have clients gone ahead on Sage One - they claim VAT on cash drawn from bank because the software defaults - they miss things out then get confused and generally its a complete mess. Take me hours to sort out the rubbish. BUT remember HMRC say - your VATs done at the touch of a button ! They will be the loser , by the time their staff have trolled through everything the cost of that will far out way any penalty . They made their bed......

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Replying to GHarr497688:
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By Cheshire
04th Mar 2019 18:20

Get them a good bookkeeper!

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Replying to Cheshire:
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By GHarr497688
04th Mar 2019 18:24

that's the point they are trying to save costs based on HMRC and Software company adverts.

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Replying to GHarr497688:
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By Cheshire
04th Mar 2019 18:36

Buyer beware, never believe a salesman and never believe adverts.

That said, I do get what you are saying.....so many TV screens broken after foot through them after every QB and MTD ad!

Ive said it before - HMRCs preference is for Accountants to become an endangered species so folk DIY and bobs it up because they want the penalty income.

Im seriously considering very early retirement.

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Replying to GHarr497688:
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By DaveyJonesLocker
04th Mar 2019 19:52

The adverts by QuickBooks and Sage are disgusting. They oversimplify bookkeeping and refer to just Making Tax Digital. Not even a small disclaimer at the bottom saying "applies to VAT only"
A plague on their houses.

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Replying to Cheshire:
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By Kaylee100
04th Mar 2019 20:29

At what price? They simply do not have the profits to employ a bookeeper.

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Replying to Kaylee100:
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By Cheshire
04th Mar 2019 20:41

I read something the other day, cannot recall where, that HMRC have calculated the cost to a business of MTD is £248.

Where in hell they have got that figure from I have absolutely no clue, but as ever the sheer arrogance of those in charge and the lies they are prepared to spout knows no bounds.

I recall when vat online was being forced through, it's not even that long ago. HMRC insisted that even those without the internet could do it by popping along to their local library and using the library computers. Look what happened there....thousands of libraries closed. But hey, you folks have being filing online, so tough, just get on with it somehow.

Not ideal, but could some of them afford a bookkeeper handholding/ training session?

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Replying to Cheshire:
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By Kaylee100
05th Mar 2019 04:29

Yes, they can afford that. Its what Ive been doing. But... Its too much for them to take in. They make mistakes.

Another problem I saw, reminded by another poster. They set up a code for different insurance payments and it defaulted to 20 percent VAT reclaim. I think the coding choices will be a big area for issue. Before, manually, they listed their invoices and picked the VAT up direct from them. Im trying to get them to do that now but they picked up from the adverts they wouldnt need too. (Adverts were reallly talking about adding on some sort of receipt bank but they thought the system just did it).

Anyone know how expensive and accurate receipt bank actually is?

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Replying to Kaylee100:
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By johnhemming
05th Mar 2019 07:20

Kaylee100 wrote:

Anyone know how expensive and accurate receipt bank actually is?


I don't know about receipt bank, but I am working with an AW member on a cunning plan to photograph handwritten collins books accounts and turn them into MTD complaint digital records.

This does involve using AI to analyse handwriting until we have done some experiments we won't know how well this will work, but the IT costs should not be that much. I expect it to be very dependent on the quality of the handwriting.

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Replying to johnhemming:
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By Kaylee100
05th Mar 2019 07:38

You genius!!!

I was sat with a client's husband as she maintains excellent manual records but hates computers and he and I thought we were clever in thinking of creating a retail cashbook in excel - well, we didn't think we were that clever - we thought someone would have thought of it before us and were trawling the net together looking. You've taken it that one step further - makes perfect sense.

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Replying to Kaylee100:
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By johnhemming
05th Mar 2019 09:21

I would be interested in analysing any photographs of manual books taken with a reasonably modern smartphone. If you have any I could look at please send them to me at [email protected]

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Replying to johnhemming:
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By nodrogbir
05th Mar 2019 11:14

I will be sending you some very soon. At the moment with clients calling about MTD mandation , end of year Payroll,
Auto enrolment , GDPR , plus general business advice and Self Assessment round the corner I actually feel like I may as well give up. HMRC have a lot to answer for but then again they ( or should I say we ) will pay the price as the system closes in on them.

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Jennifer Adams
By Jennifer Adams
04th Mar 2019 18:49

I've just finished sending a one page note round to affected clients telling them when their particular 1st VAT return under the new system will be and telling them not to worry as I've got it all in hand.
I've not discussed or told them about it otherwise.

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Replying to Jennifer Adams:
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By GHarr497688
04th Mar 2019 18:55

My clients just can't believe HMRC are encouraging a situation where the Accountant isn't being pushed out when its the Accountant that makes sure of compliance.
I personally am unable to charge a clients to put every single transaction on a computer so HMRC are handing compliance to clients. More fool them.....

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Replying to Jennifer Adams:
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By Kaylee100
04th Mar 2019 19:24

I assume then you do their VAT reporting? Those I do this for I havent said much too either.

Many of us are in practice, though, with clients who keep and file their own VAT returns. Some manually. Some with different digital solutions. Its these that have plenty of stuff to do.

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Replying to Kaylee100:
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By nodrogbir
05th Mar 2019 11:18

I think were HMRC have made a MASSIVE mistake is assuming clients do all the recording of transactions of a computer or spreadsheet and that they are totally computer literate and understand Accountancy and that us Accountants sit behind a desk waiting for work to come in and have unlimited resources ( mind you they would think that because they do )

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ALISK
By atleastisoundknowledgable...
06th Mar 2019 08:25

TBH (thankfully like more than I thought), I haven’t done anything, yet. Other than moan on AW that is.

No ASA, not even mentioned it to any clients. Good chance I won’t do anything until May. 2 clients have sent me an email asking “I’ve heard something on telly about MTD, do I need to do anything? Am I compliant?”.

All the vat returns we do are on Xero, as are most (but not all of our clients). A Excel client has just passed their small bkpg over to us because of MTD. I was going to run it through Xero, but they’re multi-currency so the subscription would price the job out. I’m just gonna stock their invoices back into Excel, exactly as they used to do, then use bridging software.

A handful of clients do their own returns on Sage, I’ll talk to them about bridging software in the next few months. Probably get them to send the CSV export to us and we submit, TBC.

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