Accountants are lazy
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"MTD is not a slightly different method though".
What is it then?
I spoke with VAT inspector recently and asked him his opinion and he couldn't give two hoots about it.
Internally they are not interested about.
Until there is transcational data filed its of no benefit to them, (his own words).
There you go Glenn. HMRC aren't interested. Why? because they haven't got a clue and they couldn't care less. When things go wrong, which they will, HMRC will say "not our problem, it's a problem between IT and the clients". That really is going to work isn't it? Do you honestly think it's going to be that easy to get transactional data out of all the business world, especially the smaller ones? Just look at bank streaming and the like, which has been about for a while, and all the problems they are having and that is just with a few businesses. I'm strongly convinced that MTD as was originally intended will not happen.
You have failed to answer the question.
What is MTD if it not filing your vat return by a different submission method.
The reason HMRC staff at the sharp end are not bothered about it is does not effect them. They will get the same information they get now.
There lives will not change.
Transactitional data does not have to be filed yet and probably wont need to be for some time, but again it wont be hard as you can do it now, assuming you dont make your VAT figures up, the individual transactions will be there to be filed by software or bridging software.
MTD that was originally intended is not happening it is significantly dumbed down version of it.
MTD stands for Making Tax Digital. This is a load of rubbish as many business use digital methods to arrive at their VAT and Accounts already, just not in the format HMRC wants. What HMRC want to do is have sight of every transaction a business makes without opening an investigation (which I don't think is legal). The fact that they only want VAT box figures now is irrelevant. A lot of business will have to change the way they record transactions to suite HMRC and not the way the business operates. For many this may mean a lot of duplication and or buggeration. All this in the name of "it will decrease errors". So a client buys a new car, claims the VAT back and puts the expense under additions . Please tell me how MTD will stop that?
Before MTD, clients were required to keep individual data for their VAT returns.
If they use spreadsheets now they will still be able to with bridging software.
How is it irrelevant that you don't have to file individual transactions now, you don't have to, it may never happen. Or more likely it will happen when the system is able to deal with it.
It wont stop the error you mention, but surely you would not allow a client to claim for a car on his vat return, worst case you would pick it up at the year end. This wont stop errors happening but it will spot hopefully big errors like you mention or are you suggesting clients should claim cars and get away with it.
Millenium Bug, GDPR, Brexit & MTD were all supposed to be armageddon events that would ruin everything, the reality is the next day the sun still comes up and life goes on. If everyone took note of the media and scare mongers no one would get out of bed each day.
30 years ago people would just be told to man up and deal with it, but your not allowed to use phrases like that these days, sadly.
MTD won't stop any errors, but that is what we were told why MTD is here. Of course we would pick the car error up. The point was that MTD was sold to Parliament on the premise that it will reduce errors.
Have you costed out exactly how much extra cost MTD will be for your clients (not so much now, cos as you quite rightly say you're swopping one way of filing for another) once the full transactional MTD comes in force 1/4/2020, that's just over a years time?
I'm a great believer in getting on with it but when someone tells me how to keep my records on the premise it will stop me from making errors I do get the hump.
I haven't even got a problem with submitting transactional data, just the time scale which HMRC think they can achieve what to them will be euphoria.
The cost will be nil, as the transactional data is already there. it might take a second or so longer to upload it to the system.
You first said that HMRC wanting individual transaction data was illegal, now you don't have an issue with it.
Ultimately MTD will reduce errors or deliberate fraud why do you think it will not.
Things like VAT carousel etc would surely be acted upon more quickly etc.
The only thing I disagree with is that small business make all the mistakes. For error spotting looking at the day to day transactions of larger entities will yield more tax for the treasury.
...."the reality is the next day the sun still comes up and life goes on".....Sorry, I thought you lived in the UK! Where else is MTD being introduced - the Caribbean?:-D
Oh, how I wish that your clients have read this post. The hilarious typos nearly had me dropping my quill pen!
I find the smugness of your response beyond belief. Even the best software and practice management in the world cannot force clients to respond to increasingly urgent requests in a timely fashion.
So, you can't believe the amount of anger that Mark's article has produced? Well, join the real world and see what it's like for the thousands of small practices that have to service millions of clients each year.
I imagine that you are quite selective in your clientele as Mark Telford probably is as well. That's fine but I have to say thank you to both of you for pricing all the clients that the majority of us deal with out of that market.
Mark's firm has a pricing structure that most of us could only dream of. From £2,100 per annum plus VAT for a one or two person business, apparently not registered for VAT, is a fee which only the ill-informed would pay. 200 clients at that level alone would produce £420,000 per annum, and mostly up front. That is without considering the more expensive packages. Well, good luck to him.
There is certainly one thing I can agree with. Coping with MTD is a car crash waiting to happen.Why do you think that only 4.000 have joined the MTD pilot? Perhaps it is because this is an ill-conceived, poorly advertised and, in my view, wholly unnecessary measure promoted by an under-staffed, out of touch HMRC that is not fit for purpose.
Note that HMRC, as of today 11th February, has not yet released the figures of outstanding tax returns following the deadline of 31st January. Has compliance gone backwards?
Terry - why would you not be selective in who you work with?
By specialising you can provide a far better service as you can focus on the specific requirements of that client type.
Whether that is a £300 fee for a subcontractors tax return or a £10,000 fee for a range of services for a limited company.
If you try and be all things to all people the level of service will slip.
Maybe your level of service might slip (probably because you don't know what an Accountant is). An Accountant, as opposed to a number cruncher or value added merchant, is all things to all people.
John - if I tried to be all things to all people, then standards would slip.
Which is why I don't. I'm very specific on the types of businesses we work with.
We don't work with just anyone.
A modern accountant's role is very different to what it was 10 years ago. In the same way as a modern business owner's requirements are very different.
Technology has had a huge impact and allows accountants who 'get it' to provide far more to their clients.
"We don't work with just anyone" Do you mean you don't work with people who are intelligent and can spot a con man a mile off?
"A modern Accountant's role is different to what it was 10 years ago".
An Accountant's (now I'm talking about an Accountant not a marketeer) role hasn't changed in the last umpteen years. Technology and the tools we use might have done but not our role.
I'm sure all our readers "get it".
I don't think Mark's firm's fees are an issue, they are transparent and potential clients/clients have a choice, so I cannot see how it can be considered a 'con'. Like me he probably offers what clients perceive to be value for money services, yet I charge more than most local accountants. Clients are 'happy' (through gritted teeth, but in some cases actually happy!) to pay because they think I am better for some reason.