Managing Director Movemybooks
13th Jul 2017
I might be being a bit thick here, but aren't the first and third bullet points in HMRC's press release contradictory?
"only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and only for VAT purposes"
"businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020"
One statement suggests that digital records will not be a requirement for non VAT registered businesses (at any immediate future date). The other alludes to digital records being required for (all) businesses by 2020.
John, can you clarify please?
30th Jun 2017
Just responding to you saying "According to HMRC’s numbers, 99% of VAT returns are done online, 98% of Corporation Tax and 86% of Self-Assessment returns are done online, so using the MTD interface to quickly upload data throughout the year won’t be that much of a leap."
Err, no. VAT returns can be filed by typing totals into an online form. Most tax returns (personal and corporate) are filled via software used by accountants. In all three scenarios there is no current requirement for the business concerned to have digital records.
You see no leap because you are looking at the wrong jumpers.
9th May 2017
Hi again everyone.
I can see the merit in much of the comments of all parties here and I certainly did not intend to suggest that there are NO opportunities to provide advisory work.
Nor do I wish to belittle anyone's efforts to advise clients on new ways of working - and generate fees from doing so. This is exactly what we should be doing.
But I refer back to my original reply and ask again: how many of the "magic bullet" services listed in 1-14 by Rob Nixon would the vast bulk of your self-employed customer base want and be willing to pay for?
9th May 2017
Hi, yes, of course there is always advice that can be given - even to the smallest and simplest of clients.
But will they pay for it? And will they pay enough to cover lost, bread and butter accounts and tax return work?
A plumber with a £400 fee for a simple accounts exercise and tax return would be unlikely to pay the same £400 for the advice you mention above, I would argue. Especially when it's increasingly the norm nowadays for firms to provide advice free as part of a fixed price compliance service.
Advisory work is more interesting and is valued by clients but I do not personally believe that the compliance fee base in a typical small accountancy firm can be replaced with advisory fees from the same clients.
8th May 2017
Professional practice software (from the likes of IRIS / Digita / Sage etc) is mainly used for reporting - printing and filing accounts and tax returns.
Sole traders are not currently mandated by law to produce a set of accounts (in formal printed form as facilitated by the software I am referring to). The vast majority of companies (as they qualify for the Micro Entities regime) can now produce very simple 2-page accounts documents, again no need for powerful reporting software.
That leaves tax returns. MTD will sweep away the requirement to produce a printed, or any other type of, tax return for sole traders and, eventually, companies.
Practice management software will probably become essential. Accounts and Tax Return production software I argue will become redundant.
So I stand by my original assertion.
4th May 2017
Hmm... 4.2 million of the 5.5 million UK businesses employ nobody but the owner. That is to say they are self-employed individuals.
How many self-employed clients (read plumbers, designers, hairdressers) will want and pay for the services listed 1-14 above?
The "you can replace compliance income with advisory income" suggestion is the biggest misconception in the accountancy industry today.
There, I said it.
4th May 2017
I think it's the cloud software providers who are emphasising cloud software in the context of MTD. MTD only requires use of digital methods, which, of course, includes desktop software.
And, watch this space - we're going to see a lot of software designed for tax and accounts compliance in accountancy practices get "retired" over the next few years. Why? Because MTD, simplification and deregulation mean its not going to be required.
28th Apr 2017
Where do you get your 97% figure from please?
27th Apr 2017
As someone much cleverer than me said, Excel is the second-best tool for everything.
6th Apr 2017
Hi Rebecca, good article this.
Do you have any more detail on what I think will be the most important question for accountants in practice:
What constitutes "a timely basis"? [for the keeping of digital records].