Breathed a little on February 1st having succeeded in filing ALL SA income tax returns required to be filed the day before. No late filing penalties for my clients - hurrah.
Then I turned to the December 31st VAT returns due for filing by February 7th - duh.
As you will have guessed, some chumps tell me they don't need me to do the detailed book-keeping anymore as they have their own newly acquired MTD compliant software.... and of course HMRC is going to collect VAT from them more accurately and completely - bahahahaha!
First set of records I examined Chump 1 had done a bank statement scrape and posted all his purchase payments as bank payments - e.g. debit expense account £1,000; credit bank £1,000. So far so good.
He then went on to post up his records from a receipts processing app and succeeded in duplicating most of his business expenses - e.g. debit expense account £1,000; credit supplier's account £1,000. Ooops!
Result (you're ahead of me, aren't you); he duplicated most of his business costs; he duplicated most of his VAT input tax and was left with a list of "unpaid supplier balances" (according to the software) but which he had in fact paid through the bank.
He was delighted that HMRC apparently owed him a VAT refund in view of all that input tax he had entered
To cut to the quick I worked all weekend Sat Feb 2nd and Sun Feb 3rd to correct all duplicate entries for the three months to December 31 2018 on an item by item basis, correcting the individual VAT input tax claims....
....and then felt obliged to discount my time to make the resulting bill for the filing of the corrected VAT return
appear "affordable".
Moving to the quarter ending March 31 2019 (filing on May 7th) all chumps who prefer to do their own book-keeping in this way (i.e. using the commercial software totally incorrectly) can submit their own VAT returns in their own right in future.
I want nothing to do with the rubbish results so easily created by chumps using the new software unsupervised ALONG THE WAY.
Rebecca urges us to use this gift of time to move clients to online record keeping. Has HMRC confirmed whether or not it will provide free software, akin to Basic Paye Tools?
"Evans hinges this background talk on Xero’s design-led approach to its software and how the cloud doesn’t require software to be installed".
...and this change in working practices has resulted in it taking much longer for users, clients and accountants, to get through the basic processing work these last couple of years we have been using cloud based software.
We are still running in tandem software on our in-house server and software in the cloud. The differences in the time taken to process transactions is noticeable.
We find we are spending extra hours on every assignment that involves remote software (and this is in Manchester with fast broadband speeds available for uploading and downloading of data).
The truth is that currently when clients and their accountants are using cloud based software they are finding the "screen refresh" time is lengthy and (tbh) just "tedious".
The transaction response times from the cloud based software are noticeably slower when you have just finished working on a job which involves posting transactions to a program installed on your own hard-drive, (desktop or laptop).
They don't seem to realise as clearly as the rest of us that the the need "to put things right" is not going to go away.
In our firm we have been using cloud accounting with a number of small clients this last couple of years. In every case we have had to spend more time "to put things right" than when we shared lists of sales invoices, customer receipts and lever-arch files of purchase invoices and bank statements.
Particular problems have arisen when accounting for Director's out of pocket expenses - e.g. small amounts of travel and subsistence - confusing cash accounts and Director's Loan accounts.
Some of the packages we have been evaluating include very strange reports. Here's just one example - Dividends set up in the default option as an "expense account" within the P&L - with the result that dividends are deducted before arriving at taxable profit - bahahahaha!
Default structure for partnership accounts; doesn't come with any "ready-made" capital accounts for capital introduced and the various partners' drawings. Surely these are some of the most clearly needed accounts you'd want to be able to access in a chart of accounts drawn up for a partnership.
In one particular case we were invited to spend a day with the software development team to explain to them the distinct features of partnership and company accounts as opposed to simple sole traders accounts (using the cash basis) and what accounts should be included when structuring various charts of accounts for different types of business. Why? Because they weren't sure they understood how partnership accounts and company accounts differ from those of sole traders (?)
To cap it all, this offer was to be accepted by us as a "goodwill gesture of working in partnership" with the software company (i.e. unpaid).
As it was in our busiest period leading up to yesterday, we politely declined the invitation.
"The MTD Team really are in a little world of their own"
This comment made me think that if Bernie Ecclestone does leave Formula 1 he could always come over here and bang a few heads together in the MTD Team.
Remember the new F1 qualifying rules that were introduced at the start of this year's season? For how many races did that last ?????
Ill-conceived, unworkable, did not achieve the desired effect; boycotted, costly to the sport, had to be reversed.
Are any dividends that are declared on investments lying within ISA wrappers protected from this treatment? Do the investments become "unwrapped" on death? Please clarify. Thanks.
We too have had issues where we have prepared the leaver details on the HMRC software and then been unable to access the P45 after the monthly payroll has been submitted.
Going to the individual employees page, the left hand panel shows there are (0) outstanding submissions and yet the access box to the P45 is blank and the narrative to the left of the box reads "unsubmitted". Very odd.
This is a particular worry even now as HMRC are now issuing P9s for 2015-2016 for people who left our employment in April 2014!!
Grateful for anyone who has also experienced this problem, has solved it and can give me a work around.
My answers
Breathed a little on February 1st having succeeded in filing ALL SA income tax returns required to be filed the day before. No late filing penalties for my clients - hurrah.
Then I turned to the December 31st VAT returns due for filing by February 7th - duh.
As you will have guessed, some chumps tell me they don't need me to do the detailed book-keeping anymore as they have their own newly acquired MTD compliant software.... and of course HMRC is going to collect VAT from them more accurately and completely - bahahahaha!
First set of records I examined Chump 1 had done a bank statement scrape and posted all his purchase payments as bank payments - e.g. debit expense account £1,000; credit bank £1,000. So far so good.
He then went on to post up his records from a receipts processing app and succeeded in duplicating most of his business expenses - e.g. debit expense account £1,000; credit supplier's account £1,000. Ooops!
Result (you're ahead of me, aren't you); he duplicated most of his business costs; he duplicated most of his VAT input tax and was left with a list of "unpaid supplier balances" (according to the software) but which he had in fact paid through the bank.
He was delighted that HMRC apparently owed him a VAT refund in view of all that input tax he had entered
To cut to the quick I worked all weekend Sat Feb 2nd and Sun Feb 3rd to correct all duplicate entries for the three months to December 31 2018 on an item by item basis, correcting the individual VAT input tax claims....
....and then felt obliged to discount my time to make the resulting bill for the filing of the corrected VAT return
appear "affordable".
Moving to the quarter ending March 31 2019 (filing on May 7th) all chumps who prefer to do their own book-keeping in this way (i.e. using the commercial software totally incorrectly) can submit their own VAT returns in their own right in future.
I want nothing to do with the rubbish results so easily created by chumps using the new software unsupervised ALONG THE WAY.
...or were you perhaps complimented on your book-keeping?
Rebecca urges us to use this gift of time to move clients to online record keeping. Has HMRC confirmed whether or not it will provide free software, akin to Basic Paye Tools?
Have any staff at Grant Thornton "distanced" themselves from Jonathan Riley's opinions?
"Evans hinges this background talk on Xero’s design-led approach to its software and how the cloud doesn’t require software to be installed".
...and this change in working practices has resulted in it taking much longer for users, clients and accountants, to get through the basic processing work these last couple of years we have been using cloud based software.
We are still running in tandem software on our in-house server and software in the cloud. The differences in the time taken to process transactions is noticeable.
We find we are spending extra hours on every assignment that involves remote software (and this is in Manchester with fast broadband speeds available for uploading and downloading of data).
The truth is that currently when clients and their accountants are using cloud based software they are finding the "screen refresh" time is lengthy and (tbh) just "tedious".
The transaction response times from the cloud based software are noticeably slower when you have just finished working on a job which involves posting transactions to a program installed on your own hard-drive, (desktop or laptop).
Do others find this? Please just say.
They don't seem to realise as clearly as the rest of us that the the need "to put things right" is not going to go away.
In our firm we have been using cloud accounting with a number of small clients this last couple of years. In every case we have had to spend more time "to put things right" than when we shared lists of sales invoices, customer receipts and lever-arch files of purchase invoices and bank statements.
Particular problems have arisen when accounting for Director's out of pocket expenses - e.g. small amounts of travel and subsistence - confusing cash accounts and Director's Loan accounts.
Some of the packages we have been evaluating include very strange reports. Here's just one example - Dividends set up in the default option as an "expense account" within the P&L - with the result that dividends are deducted before arriving at taxable profit - bahahahaha!
Default structure for partnership accounts; doesn't come with any "ready-made" capital accounts for capital introduced and the various partners' drawings. Surely these are some of the most clearly needed accounts you'd want to be able to access in a chart of accounts drawn up for a partnership.
In one particular case we were invited to spend a day with the software development team to explain to them the distinct features of partnership and company accounts as opposed to simple sole traders accounts (using the cash basis) and what accounts should be included when structuring various charts of accounts for different types of business. Why? Because they weren't sure they understood how partnership accounts and company accounts differ from those of sole traders (?)
To cap it all, this offer was to be accepted by us as a "goodwill gesture of working in partnership" with the software company (i.e. unpaid).
As it was in our busiest period leading up to yesterday, we politely declined the invitation.
"The MTD Team really are in a little world of their own"
This comment made me think that if Bernie Ecclestone does leave Formula 1 he could always come over here and bang a few heads together in the MTD Team.
Remember the new F1 qualifying rules that were introduced at the start of this year's season? For how many races did that last ?????
Ill-conceived, unworkable, did not achieve the desired effect; boycotted, costly to the sport, had to be reversed.
Look at how long HMRC held back their attacks on film investment schemes. I can see the same thing happening here.
Are any dividends that are declared on investments lying within ISA wrappers protected from this treatment? Do the investments become "unwrapped" on death? Please clarify. Thanks.
P45s
We too have had issues where we have prepared the leaver details on the HMRC software and then been unable to access the P45 after the monthly payroll has been submitted.
Going to the individual employees page, the left hand panel shows there are (0) outstanding submissions and yet the access box to the P45 is blank and the narrative to the left of the box reads "unsubmitted". Very odd.
This is a particular worry even now as HMRC are now issuing P9s for 2015-2016 for people who left our employment in April 2014!!
Grateful for anyone who has also experienced this problem, has solved it and can give me a work around.
Best wishes all,
P2