Podcast: MTD - draft regulations

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The government has finally released draft regulations which provide the operational machinery of Making Tax Digital for income tax and for VAT.

While they have provided welcome detail for business and accountants left in legislation limbo by the events of the past few months, they have also raised plenty of questions.

Joining the AccountingWEB pod to discuss the regulations are AccountingWEB’s tax editor Rebecca Cave and Mark Purdue, Product Manager – Tax at Thomson Reuters.

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By DJKL
15th Sep 2017 18:52

Interesting.

Given the five benchmarks where does that leave Excel re vat reporting?

It appears to me the performance requirements, especially re receiving communication from HMRC, kills Excel unless some fairly sophisticated add on is to be developed and becomes available, I doubt many accountants have the necessary skills to work a DIY solution.

If the above is a reasonable conclusion the software companies just got a very captive audience which has no choice but to sign up for one of their offerings.

A cynic might believe the lobbying for Excel use has been rather neatly circumvented, any views?

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to DJKL
15th Sep 2017 20:41

They skipped over the paragraph in the secondary legislation overview where it says that users require a software program or "set of compatible software programs" which fulfill the MTD requirements.

So Excel is fine for the record-keeping part, as HMRC have already indicated. The fact that it can't do the other bits is irrelevant, once compatible apps come along.

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16th Sep 2017 09:04

I'm thinking, can you just stick the Excel totals for the month/quarter/whatever into the software?

Do I need to record all the transactions? Or just the ones on the VAT return? In other words, can I leave out wages, drawings, dividends etc etc.

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By Eric T
17th Sep 2017 10:03

Yet more talk and still no certainty. I'm tired of all this, to be honest.

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By Eric T
17th Sep 2017 11:14

Can I ask a question (I've asked this a few times on Accounting web but no one has specifically addressed it yet).
All the talk about VAT related MTD seemed to relate to "traders whose turnover exceeded the VAT Registration threshold". What about VAT registered traders whose turnover is below the compulsory VAT threshold? Are they also obliged to move to MTD for VAT or will they be able to continue with the "old fashioned" Government Gateway based submission system after April 2019?

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to Eric T
17th Sep 2017 11:23

I take it literally until they change their minds.

Which could be any time.

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18th Sep 2017 15:00

I haven't seen much from Mr Xero, has he been busy making his MTD team redundant?

It is unfortunate yet totally foreseeable given the direction of travel that excel was going to be frozen out. Xero et al have no interest in accomodating businesses and certainly not their main competition it would seem. What they are now finding is the price you pay for sleeping with the devil.

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to justsotax
18th Sep 2017 15:15

justsotax wrote:

It is unfortunate yet totally foreseeable given the direction of travel that excel was going to be frozen out.

Yet there's a potential market for someone who can recognise what people want to buy, rather than what the software house wants to sell.

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