Re MTD - surely, given the advertised implementation dates, it should be a bright green at this stage, not being the subject of an argument about whether its amber/borderline red!!
And looks like we will all get a new number - a Unique Customer Record (UCR). So we will have unique NI numbers, Unique Taxpayer References, a new UCR, a government gateway sign on, with a different sign on for agents, a different sign on for in year CGT, a different Trust registration system, a Personal Tax Account, and now a Single Customer Account (SCA). Then there's VAT, ATED, PAYE, etc etc
Something tells me that the SCA won't be all its cracked up to be.
Referring to it (whatever 'it' is) as a 'bootcamp' just seems a bit aggressive in this context - it just smacks of forced labour....
.....which, thinking about it, is what MTD ITSA is going to be like for most people..... if it comes to pass.
Secondly, unless the software houses know more than we do, as Hugo says, so far HMRC have produced next to nothing in terms of concrete statements and real, practical guidance.
This is a far cry from the excellent run up to the change from PYB to CYB in 1996/97.
It was hardly an 'attack' on service levels. The letter was very polite and almost apologetic in tone - 'Dear HMRC, very sorry to bother you, but would you mind answering the phone a little quicker, many thanks, your obedient servants...'
If the professional bodies don't publicly hold HMRC to account, who will??? They need to be far more forceful and more public in their criticism.
The dashboard is rubbish- complete waste of time and does not accurately reflect reality.
Fact - letter received this week resolving an HKRC error and penalties caused by a duplicated UTR - almost exactly a year after my complaint!! That is cr*p service.
'The programme will expand in 2023/24 to test simple, mandated customer journeys at volume and to start testing more niche customer groups.'
Hilarious. Still testing the simple stuff in 23/24!!
Someone get HMRC to re-read the Carter report from many years ago, the gist of which was that HMRC must ensure that software must be fit for purpose before being implemented.
Testing software for millions of people on a select group of taxpayers (allegedly only NINE people/landlords) is beyond a joke. How can such a small group be representative of the millions who will have to use this rubbish.
Most of our clients would fall in in the 'niche' category - multiple businesses, properties, partners, etc, and I guess that would be the same for a lot of represented taxpayers. so, we're still in the dark about what these quarterly dates actually look like......
But this is where HMRC annoy me. If you ever try to argue that a FTT decision is relevant (I've had this with ATED and other appeals), you are simply told that FFT decisions are not binding - which we all know is true. But my experience is that in arguing with HMRC, they refuse to even consider a FTT decision that does not support their view.
But in this instance, in EIM23215 HMRC quote the 2 decided cases in their favour as if they set a precedent. They should not have it both ways - but they can, because they can spend years arguing the toss without worrying about the cost or time involved.
This article really p's me off.
I don't think there are many accountants that don't want an easier life.
The trouble is that most accountants can see that what is being forced on the unsuspecting taxpaying public will not make anyone's life easier - not HMRC, not the accountant, and not the taxpayer. There are no winners here - apart from Sage, et al, selling their singing, dancing software.
It would be great if all clients kept their records accurately and digitally - but that is a utopia that is long way away from where we are, and forcing MTD is not going to magically make your average plumber (other tradespeople are available...) understand how to accurately maintain their accounting records.
My issue is that MTD drags in individuals and micro businesses who will now have - without exaggeration - over 10 times as much admin to deal with as they have now. My example below, which I gave in the answers to the previous article, shows what that might mean to a ordinary person with 3 sources of income - currently requiring only ONE annual Tax Return:
"1. They won't be able to use the HMRC system once MTD gets going - it will HAVE to be third party software.
2. They might have to do quarterly returns/final recs for different sources of income. Eg someone with ordinary rental, FHL and self-employment now prepares ONE Tax Return after 5 April. Under MTD that person would do a quarterly MTD return for EACH of those sources if combined T/o was > £10k. So that's 12 quarterlies per year, plus a further 3 end of year reports - 15 effective Tax Returns. Instead of one. Moronic.
3. They will be penalised for missing any of the submission deadlines each year - all 15 of them!"
In this example the additional bureaucracy produces nothing of benefit to the taxpayer or HMRC. The OTS should step in, and should HAVE stepped in, to advise HMRC that this, as it stands, is not a sensible step. And that's before we get to the HMRC software issues.
That's why I am 'resisting' MTD - its a good reason.
Make the Turnover limit the VAT threshold - that would be so much more sensible and workable, and more likely to garner support from the people that sort out HMRC **** every day of the week.
Thanks for the article Andrew - but a lot of this is old news.
In 2015 (along with about 10 other accountants from the SW area) I accepted an offer to meet with HMRC reps to discuss the Making Tax Easy (or whatever they called it then) project. 3 hours of travelling and 4 hours listening to HMRC reps who had no real idea of how businesses work.
It was explained (by ALL attendees) that the proposals were unnecessarily complicated - if HMRC wanted to accelerate tax payments, then just change the rules so that taxpayers paid quarterly or monthly ("like your electricity bill" as the HMRC guy said at the time). Simple. And that suggestion is still being made now.
Also - just to correct your article - the Kanter report is dated March 2021, but the research (such that is was) was done in Feb/March 2020. As noted in the report the respondents were the simple 'MTD for VAT' taxpayers. The later 'more complex' VAT businesses joined in October 2020 and were not asked for their views (per the Kanter report). Hardly representative from that standpoint.
Notably, of course, the vast majority of these businesses were already effectively reporting monthly
- so they were not being asked to submit any more returns than they were before - just a different methodology!!
And as for a sample size of 30 odd businesses representing the views of the 13 million people who will be affected by MTD Proper - what a joke!
HMRC would get a much better idea of the view of the average person using the HMRC online software for one Tax Return per year that if it was explained that:
1. They won't be able to use the HMRC system once MTD gets going - it will HAVE to be third party software.
2. They might have to do quarterly returns/final recs for different sources of income. Eg someone with ordinary rental, FHL and self-employment now prepares ONE Tax Return after 5 April. Under MTD that person would do a quarterly MTD return for EACH of those sources if combined T/o was > £10k. So that's 12 quarterlies per year, plus a further 3 end of year reports - 15 effective Tax Returns. Instead of one. Moronic.
3. They will be penalised for missing any of the submission deadlines each year - all 15 of them!
(I'm 54 next month so I'm pleased to learn that I'm still young and can use a c0mput@r properrlee - even the psell checker.)
I just can't believe that people actually believe the drivel they write about how easy MTD will be. I've spent the last 30 years helping intelligent, professional people through the labyrinth of the UK tax system - and I'm busier today than I've ever been. Why? Because despite all the promises, and AI developments - computers cannot make judgments, they don't understand the nuances of accounts and tax. Human input and guidance is needed - and to some extent, as things get more complicated, even more human input is needed -to sanity check the programmed, limited decision making ability of computers.
Open Banking - what???
'By leveraging Open Banking, Ecospend allows taxpayers to make payments to HMRC directly, quickly and securely.' Yes - do that already - its dead easy and takes a couple of seconds. How is OB going to automate that for me. And am I happy for that automation?
20 years after we've gone through the car crash that will be MTD, so in 2043, some bright super millennial will say - 'I know what's easier than doing 5 Returns a year! Why don't we simplify it to 1 a year! 80% less errors, more tax collected and easier for taxpayers to cope with.....'
Sorry - I wasn't clear with that last comment! Its easier for me with the consultants because they have payslips - I was wondering how you cope with GPs and calculating pension growth without any payslips... do you calculate/project or just wait for AAPSS??
My answers
Re MTD - surely, given the advertised implementation dates, it should be a bright green at this stage, not being the subject of an argument about whether its amber/borderline red!!
And looks like we will all get a new number - a Unique Customer Record (UCR). So we will have unique NI numbers, Unique Taxpayer References, a new UCR, a government gateway sign on, with a different sign on for agents, a different sign on for in year CGT, a different Trust registration system, a Personal Tax Account, and now a Single Customer Account (SCA). Then there's VAT, ATED, PAYE, etc etc
Something tells me that the SCA won't be all its cracked up to be.
Just an observation (or two):
Referring to it (whatever 'it' is) as a 'bootcamp' just seems a bit aggressive in this context - it just smacks of forced labour....
.....which, thinking about it, is what MTD ITSA is going to be like for most people..... if it comes to pass.
Secondly, unless the software houses know more than we do, as Hugo says, so far HMRC have produced next to nothing in terms of concrete statements and real, practical guidance.
This is a far cry from the excellent run up to the change from PYB to CYB in 1996/97.
It was hardly an 'attack' on service levels. The letter was very polite and almost apologetic in tone - 'Dear HMRC, very sorry to bother you, but would you mind answering the phone a little quicker, many thanks, your obedient servants...'
If the professional bodies don't publicly hold HMRC to account, who will??? They need to be far more forceful and more public in their criticism.
The dashboard is rubbish- complete waste of time and does not accurately reflect reality.
Fact - letter received this week resolving an HKRC error and penalties caused by a duplicated UTR - almost exactly a year after my complaint!! That is cr*p service.
'The programme will expand in 2023/24 to test simple, mandated customer journeys at volume and to start testing more niche customer groups.'
Hilarious. Still testing the simple stuff in 23/24!!
Someone get HMRC to re-read the Carter report from many years ago, the gist of which was that HMRC must ensure that software must be fit for purpose before being implemented.
Testing software for millions of people on a select group of taxpayers (allegedly only NINE people/landlords) is beyond a joke. How can such a small group be representative of the millions who will have to use this rubbish.
Most of our clients would fall in in the 'niche' category - multiple businesses, properties, partners, etc, and I guess that would be the same for a lot of represented taxpayers. so, we're still in the dark about what these quarterly dates actually look like......
Shambles.
That's an interesting link.....
But this is where HMRC annoy me. If you ever try to argue that a FTT decision is relevant (I've had this with ATED and other appeals), you are simply told that FFT decisions are not binding - which we all know is true. But my experience is that in arguing with HMRC, they refuse to even consider a FTT decision that does not support their view.
But in this instance, in EIM23215 HMRC quote the 2 decided cases in their favour as if they set a precedent. They should not have it both ways - but they can, because they can spend years arguing the toss without worrying about the cost or time involved.
I think you've misunderstood my comment (or it wasn't clear enough!). Or were you joking?? Hard to tell.
What I meant was that to be caught in the MTD net a person's turnover should not be £10k, but rather the VAT threshold - currently £85k.
This article really p's me off.
I don't think there are many accountants that don't want an easier life.
The trouble is that most accountants can see that what is being forced on the unsuspecting taxpaying public will not make anyone's life easier - not HMRC, not the accountant, and not the taxpayer. There are no winners here - apart from Sage, et al, selling their singing, dancing software.
It would be great if all clients kept their records accurately and digitally - but that is a utopia that is long way away from where we are, and forcing MTD is not going to magically make your average plumber (other tradespeople are available...) understand how to accurately maintain their accounting records.
My issue is that MTD drags in individuals and micro businesses who will now have - without exaggeration - over 10 times as much admin to deal with as they have now. My example below, which I gave in the answers to the previous article, shows what that might mean to a ordinary person with 3 sources of income - currently requiring only ONE annual Tax Return:
"1. They won't be able to use the HMRC system once MTD gets going - it will HAVE to be third party software.
2. They might have to do quarterly returns/final recs for different sources of income. Eg someone with ordinary rental, FHL and self-employment now prepares ONE Tax Return after 5 April. Under MTD that person would do a quarterly MTD return for EACH of those sources if combined T/o was > £10k. So that's 12 quarterlies per year, plus a further 3 end of year reports - 15 effective Tax Returns. Instead of one. Moronic.
3. They will be penalised for missing any of the submission deadlines each year - all 15 of them!"
In this example the additional bureaucracy produces nothing of benefit to the taxpayer or HMRC. The OTS should step in, and should HAVE stepped in, to advise HMRC that this, as it stands, is not a sensible step. And that's before we get to the HMRC software issues.
That's why I am 'resisting' MTD - its a good reason.
Make the Turnover limit the VAT threshold - that would be so much more sensible and workable, and more likely to garner support from the people that sort out HMRC **** every day of the week.
Thanks for the article Andrew - but a lot of this is old news.
In 2015 (along with about 10 other accountants from the SW area) I accepted an offer to meet with HMRC reps to discuss the Making Tax Easy (or whatever they called it then) project. 3 hours of travelling and 4 hours listening to HMRC reps who had no real idea of how businesses work.
It was explained (by ALL attendees) that the proposals were unnecessarily complicated - if HMRC wanted to accelerate tax payments, then just change the rules so that taxpayers paid quarterly or monthly ("like your electricity bill" as the HMRC guy said at the time). Simple. And that suggestion is still being made now.
Also - just to correct your article - the Kanter report is dated March 2021, but the research (such that is was) was done in Feb/March 2020. As noted in the report the respondents were the simple 'MTD for VAT' taxpayers. The later 'more complex' VAT businesses joined in October 2020 and were not asked for their views (per the Kanter report). Hardly representative from that standpoint.
Notably, of course, the vast majority of these businesses were already effectively reporting monthly
- so they were not being asked to submit any more returns than they were before - just a different methodology!!
And as for a sample size of 30 odd businesses representing the views of the 13 million people who will be affected by MTD Proper - what a joke!
HMRC would get a much better idea of the view of the average person using the HMRC online software for one Tax Return per year that if it was explained that:
1. They won't be able to use the HMRC system once MTD gets going - it will HAVE to be third party software.
2. They might have to do quarterly returns/final recs for different sources of income. Eg someone with ordinary rental, FHL and self-employment now prepares ONE Tax Return after 5 April. Under MTD that person would do a quarterly MTD return for EACH of those sources if combined T/o was > £10k. So that's 12 quarterlies per year, plus a further 3 end of year reports - 15 effective Tax Returns. Instead of one. Moronic.
3. They will be penalised for missing any of the submission deadlines each year - all 15 of them!
THAT is the real issue with MTD.
(I'm 54 next month so I'm pleased to learn that I'm still young and can use a c0mput@r properrlee - even the psell checker.)
I just can't believe that people actually believe the drivel they write about how easy MTD will be. I've spent the last 30 years helping intelligent, professional people through the labyrinth of the UK tax system - and I'm busier today than I've ever been. Why? Because despite all the promises, and AI developments - computers cannot make judgments, they don't understand the nuances of accounts and tax. Human input and guidance is needed - and to some extent, as things get more complicated, even more human input is needed -to sanity check the programmed, limited decision making ability of computers.
Open Banking - what???
'By leveraging Open Banking, Ecospend allows taxpayers to make payments to HMRC directly, quickly and securely.' Yes - do that already - its dead easy and takes a couple of seconds. How is OB going to automate that for me. And am I happy for that automation?
20 years after we've gone through the car crash that will be MTD, so in 2043, some bright super millennial will say - 'I know what's easier than doing 5 Returns a year! Why don't we simplify it to 1 a year! 80% less errors, more tax collected and easier for taxpayers to cope with.....'
Sorry - I wasn't clear with that last comment! Its easier for me with the consultants because they have payslips - I was wondering how you cope with GPs and calculating pension growth without any payslips... do you calculate/project or just wait for AAPSS??