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MTD ITSA won't happen

6th Oct 2021
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Why? Because there is no incentive for the software industry. Pre MTD VAT most software was desktop for which a perpetual licence could be purchased for a one-off payment. Sage Essentials could be bought for less than £100. I had clients who used the same version of Sage for 15 years. Sage could not convince customers to pay them more money unless Sage introduced some ‘must have’ features, or unless there was some huge change in tax that necessitated new software. That’s why MTD was a godsend to the software industry. MTD VAT was the reason that would compel software users to upgrade. The software industry aren’t fools so they decided not to sell one-off perpetual licences for MTD versions of their software, but to only make MTD software available by subscription. Now that the software industry has got all these customers on compulsory subscriptions, what incentive is there for the software industry to put resources into MTD ITSA? There’s no doubt that changing software for incorporate ITSA is a much bigger project than the changes required for MTD VAT. How would the software industry recover the costs? From future subscriptions. But hold on, the software industry already has all MTD VAT customers on subscription. Will MTD ITSA create enough new customers to justify the huge cost of changing the software for MTD ITSA? I doubt it. That’s why I think the software industry’s enthusiasm for MTD VAT will not be repeated in MTD ITSA. And if the industry is less willing to supply the software, it can’t happen.

Replies (4)

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By johnjenkins
06th Oct 2021 15:07

Interesting take. I think it will happen but not including quarterly updates. I see these coming in at a much later date.
Coming back to IT, I think IR35 has put off many good IT people so it could take a lot longer to come on line. Now, given the cost to HMRC and Government having other things to spend our money on, the whole project could be delayed until after the next GE.

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By GHarr497688
07th Oct 2021 12:53

Lets hope that the Software industry get into bed with the Accountants rather than HMRC.
At the moment I am totally against the Software houses for fudging the Accountants.

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Replying to GHarr497688:
By Open all hours
11th Oct 2021 12:43

Be careful what you wish for. We’ll be heading the way of vets and undertakers soon enough.

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By Paul Crowley
07th Oct 2021 14:05

I am sure it will happen
HMRC could not justify wasting so much money
But it will fail in its objectives and be a running sore, bleeding money, time, and resouces thoughout the smallest of trades and landlords
The proportionate increased costs at the lower end is outrageous

I agree, zero free usable software

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