How and when shall we advise clients about MTD?
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I think MTD is a good move forward. I want it sooner. There are bound to be teething problems. This can be sorted.
I will not be as gentle as you are with our clients. It will be a simple and a clear message. it is an HMRC requirement, it needs to be done and we will support you. There is no pont going softly softly with this.
Thankfully a large number (at least 85%) of our clients are using cloud software, that means for us MTD will not be such an issue that AW's community has made such a huge deal out of. Of course, it is a major change, it is a good change.
AE, again a complete meal was made out of this. Same goes for RTI. For us, since we had to work with it, we adapted and we have not had any major problems. I prefer RTI to annual HMRC reporting.
There is something in the British psyche that is so resistant to change. We still use imperial measurement!
I have no idea, none of my 50 clients use spreadsheets or accounts programs, therefore I am the only one to do their bookkeeping and accounts and at the age of 66 find it almost impossible to understand what is happening anyway.
How the hell do you cope if 90% of client list use spread sheets or manual records!
What if 100% do ?
I don't have ANY clients who use accounting software - other than me doing it for them, obviously.
There is something in the British psyche that is so resistant to change. We still use imperial measurement!
That comes across as rather condescending which, I hope, wasn't your intention. There are plenty of people (admittedly now of a certain age) who still use Imperial, myself included, and there are plenty of people who regard the British resistance to change as a generally good thing, again myself included.
Thank you I was begining to think I was losing the plot, maybe I am, but as we get older it is more & more difficult to keep up or find somebody who will explain it in terms we understand.
Very good point. Very few accountants have over 50% of clients using computerised accounting.
Raju Mehta
It's good for you if the majority of your clients are using cloud software. However, across the 5.5m private businesses in the UK, I estimate (June 2016) around 0.5m are using cloud software, with perhaps 1.5m on desktop software and 3.0m to 3.5m using no accounting software or Excel.
It is the latter group that will be materially affected by MTD, and I imagine that it's because your own customer base is skewed towards the first tranche that MTD seems to be relatively straightforward.
There is something in the British psyche that is so resistant to change. We still use imperial measurement!
So do the Irish - in conversation. No one tells you how many kilometres it is to somewhere. It's always miles.
There's no NinePointSixMileBridge or EightMileTown.
More seriously - sure - people can be educated. But not in the timescale allowed. There aren't enough accountancy/bookkeeping staff available to make this work as HMRC expect.
MTD is going to happen, so there is no point in whinging about it. It's like other changes introduced like self assessment and compulsory online filing.
It might be too rushed, but that's outside our control. The big issue is that we still don't know which clients are going to be affected, and frankly I think that it's disgraceful that HMRC haven't made their mind up on this. If clients have to change their record keeping, I want them to do it in April this year, so that we can iron out errors and training issues before the system goes live from 2018. I don't want to be scaring small clients and then find that HRMC actually makes a decision that they are excluded.
I've already identified those clients affected by the original proposals (unincorporated >£10K) and categorised them, using the same categories. I'll get in touch with anybody over the VAT threshold first, and consider the smaller ones in descending order of turnover.
Personally, Jennifer, I think you're over-thinking this one and over-worrying too.
We need to tell clients and, where it's important to individual accountants that they're in there first for whatever reason, then they need to be getting the message out sooner rather than later because, contrary to what you're thinking, my experience of the last couple of weeks is that the issue of quarterly reporting is starting to penetrate a few skulls in the self employed world.
That said, I'm going to be keeping it vague, perhaps on the basis that, as HMRC are employing the mushroom policy on accountants, then I'm going to employ it on my clients and (of course) place the blame for that squarely at HMRC's doorstep.
Personally, I'm not one for over-planning anything. We know MTD is coming, it's looking very like HMRC are going to get everything they want with little to no compromise but, nevertheless, there's still the hope that a little sense will be seen and there will be decent modifications around the edges; there's also still the hope, although I admit it's looking a little forlorn, that implementation will be delayed. People who launch in now with both size nines are going to look pretty silly if the goalposts shift. Or to put it another way and using that staple of my auditing days, it's better to be approximately right rather than precisely wrong.
That's been my approach. I've already discussed MTD in general terms with the vast bulk of my clients although it is now time to start getting a bit more specific with them.
The problem is that is still very difficult because HMRC haven't come up with their final set of criteria.
It's all very frustrating.
The majority of our clients use cloud accounting software
Some don't use it but we have no idea when to move them when we don't know how the pricing of software is going to work. Someone is going to pay for the "free" software. Who the client or the accountant.
Will clients move. If they could cope with MTD then they also clever enough to file their self assessment return now unless I am missing something.
Its far far too early to discuss software etc with clients when nearly everything is still up in the air and HMRC may change the goalposts which will then mean contacting clients again. I agree you should email clients in very general terms- MTD is coming so beware or be doomed.
Contact clients later when there is certainty as clients will come back with lots of questions which cannot be answered at this stage
Further testimony today: watch live on Parliament TV....
3.30pm Finance Bill Sub-Committee
Subject: Draft Finance Bill 2017
Witness(es): (at 3:45 PM) Ms Tina Riches, National Tax Partner , Smith and Williamson Mr Michael Steed, Co-chair of ATT’s Technical Steering Group, Kaplan Leadership and Professional Development Ms Rebecca Bennyworth, Council member, Institute Of Chartered Accountants In England and Wales (ICAEW) Mr David Lyford-Smith, Technical Manager, Institute Of Chartered Accountants In England and Wales (ICAEW)
Location: Room 2, Palace of Westminster
I will wait on legislation being pretty much a done deal before telling clients. So right now I am about to brief all FRS VAT clients their 4 options from 1 April.
I am pretty relaxed about MTD because it looks as if my plan to go for MTU where necessary will make the cut in the proposed law. MTU = Making Tax Up - see earlier posts of mine for details.
I won't be imposing major system changes on any clients but will offer system changes. This thing is going to fall flat on its face, further down the line lots of people are going to look silly because the Cloud systems are not up to the job. See my earlier posts on the major flaws in Cloud software which most book-keepers can't detect, and if they detect them they can't fix them.
So relax. A shambles it will be. Keep high quality records and you will start to stand out from the crowd who've plunged over the cliff with flawed software.