Rebecca trained in London with Kidsons and, on qualifying, spent some time as Chief Accountant of a manufacturing company. She now has her own small practice in Gloucestershire that comprises of owner managed businesses and small companies.
She also lectures extensively for a range of professional bodies, accountancy firms, commercial organisations and the Inland Revenue. Demand has grown for Rebecca on the lecture circuit where she is well known for her refreshing, enthusiastic and entertaining presentation style as well as having a practical and down-to-earth approach to tax.
I'm wondering when tax changes were only introduced if they were of benefit to the taxpayer? That certainly was not true in the late 1990's when self assessment came in. A huge amount of extra work, a completely new and shorter deadline than anything we had been used to and penalties to boot.
The Regulations set out very clearly what is to be recorded - each transaction, (1)date (2)amount and (3)category (along the lines of the SA return).
Quarterly submissions are cumulative totals of the data (recorded up to the end of the quarter) for each category submitted within a month of the end of the quarter (option for calendar quarters with same 5th of month submission date).
End of period statement is stand alone SA103 / SA105 for each business (we do these already) with a declaration.
Correct errors when found. No separate submission.
Finalisation = the rest of the tax return. By 31 January after the tax year (we do already).
Income limit - agreed £10,000 is too low in my view but as far as I can see it won't move.
As to the rest of your questions - much of that depends on what software you choose and how you use it.
The unrepresented - there will be practices which focus on the smallest businesses and use free software I'm sure. We shall see.
1. and 2. My thoughts absolutely 100% - you have expressed my views exactly. The bunching of work is madness. But predicated on the tax quarters idea we now have basis period reform to contend with. More madness, and absolutely not the simplification that is claimed.
3. Goes without saying, irrespective of MTD. But persuading the Treasury that HMRC is possibly more important than the NHS for funding settlements (otherwise we couldn't pay for the NHS) has not yet proved successful.
I have always agreed that the £10,000 limit is far too low. I would have started at the VAT threshold then brought it down over time - maybe to £50,000 next and then £25,000.
But I can also see the merit in mandating proper records. We already have, and we have a £3,000 penalty for failure to keep records and as far as I can see it has never been imposed - I certainly have not seen any appeals against it, and I would expect to. Most of my clients had records I would classify as somewhere between poor and non existent (I don't regard a bag of 8 bank statements and some receipts as records). I had tried for many years to improve this but they didn't see the benefit to them (where I have I heard that before?) and weren't interested. I would absolutely agree with the statement that better records = more accurate tax liabilities (whether up or down). I would be surprised if anyone on here could disagree.
Are you saying that you allow all tags to go through without review? I'm astonished. I expect my (in-house) bookkeeper to accurately allocate every transaction, normally by viewing the photo receipt and allocating from there. Anything that they are not sure of goes to 'For Review' which flags it up. Bank feeds are great as they give you the source data, and 'rules' work well for some transactions. But not 100% - so we check the bank balance regularly to identify the odd missing one (a mystery) or duplicate (another mystery). They are rare but foul things up if not picked up at the time.
I don't pretend to speak for anyone on MTD. What I try to do is bring an accountant's perspective to the project which would otherwise be absent.
Your suggestion that my "part time" practice cannot represent what goes on in real life is difficult to understand. Do you think therefore that I have hours of time on my hands? Am I less committed to success, or the wellbeing of my staff and clients? What exactly does "part time" imply, if not to somehow reduce my experience as "less"?
The suggestion is that I have no idea what "real" practice is. So my clients are different to yours are they? Somehow less representative of the 'real world'? Far from being easier, running two businesses is a major challenge, for ever trying to balance the needs of both. The sudden need of a client against the fact that I have a lecture to prepare for and deliver.
All I was trying to do was give a bit of hope for the future, based on my experience.
Thank you for your comments. When I started my practice I was not a well known tax lecturer, just a mum starting out in business to support my family (my husband was not earning). I went into lecturing to keep me up to date with tax - I found it difficult to keep up to date and knew that if I was teaching it I would have to keep on top of it every day. So I'm not a tax specialist turned practitioner, but a practitioner first. And like many who have been in practice a long time, as you say, you serve businesses out of loyalty and duty rather than any other motivation. What I have not done is dumped clients in favour of more profitable work, as I can make a living alongside my practice through lecturing - which happily I have proved successful at.
My commitment to my client businesses is very important to me - I work (like many on here) evenings and weekends to fit around their needs. But if hairdressers were good at bookkeeping they would not need me - and mine aren't. Accepting that and changing what I did - having failed to change what they did - was my saving. And digital tools allowed me to do that.
In this article I have not expressed my current opinion on MTD at any point. I just wanted to share my experience that the changes are possible. Even for a practice like mine where far from having time on our hands (as one response indicated) we all have other jobs and are incredibly busy.
Up to 25??? I don't actually think there is a limit.
It is 4 updates per business on a quarterly basis - this is just a submission of the data in the records for each quarter on a cumulative basis. Record keeping done = press the button.
Plus one EOPS per business (we already do this - it's called SA103 / SA105 but it will be filed stand alone).
10 separate trades is 10 x 5 = 50 (not kidding)
David, the point in the quarterly submissions is that they are merely a submission of the transactions recorded for the period. They are not returns, nor is anything more needed than to click submit if using software. Obviously more is needed if using spreadsheets as bridging software will have to be used.
Once accountants get the difference between "returns" and "updates" then MTD becomes solely about the accounting records, which have to be digital.
I agree that many businesses and almost all landlords won't see any benefit, but when did changes in the tax system need to be for the benefit of the taxpayer?
John - it has to start somewhere, and whenever it starts it will be flaky. It will improve over time. I don't see that as a reason not to start.
While I'm on I agree with the views on here that there is no (obvious and tangible) benefit to business owners in MTD. Nor was there when self assessment was introduced - a huge increase in workload on the profession and by association our clients. Changes in the tax system come around - the new CGT reporting requirement is utter madness, HICBC even worse, but it is the world we work in. There won't often be a benefit to taxpayers (almost never). But unless we change career it comes with the turf.
My answers
I'm wondering when tax changes were only introduced if they were of benefit to the taxpayer? That certainly was not true in the late 1990's when self assessment came in. A huge amount of extra work, a completely new and shorter deadline than anything we had been used to and penalties to boot.
The Regulations set out very clearly what is to be recorded - each transaction, (1)date (2)amount and (3)category (along the lines of the SA return).
Quarterly submissions are cumulative totals of the data (recorded up to the end of the quarter) for each category submitted within a month of the end of the quarter (option for calendar quarters with same 5th of month submission date).
End of period statement is stand alone SA103 / SA105 for each business (we do these already) with a declaration.
Correct errors when found. No separate submission.
Finalisation = the rest of the tax return. By 31 January after the tax year (we do already).
Income limit - agreed £10,000 is too low in my view but as far as I can see it won't move.
As to the rest of your questions - much of that depends on what software you choose and how you use it.
The unrepresented - there will be practices which focus on the smallest businesses and use free software I'm sure. We shall see.
1. and 2. My thoughts absolutely 100% - you have expressed my views exactly. The bunching of work is madness. But predicated on the tax quarters idea we now have basis period reform to contend with. More madness, and absolutely not the simplification that is claimed.
3. Goes without saying, irrespective of MTD. But persuading the Treasury that HMRC is possibly more important than the NHS for funding settlements (otherwise we couldn't pay for the NHS) has not yet proved successful.
I have always agreed that the £10,000 limit is far too low. I would have started at the VAT threshold then brought it down over time - maybe to £50,000 next and then £25,000.
But I can also see the merit in mandating proper records. We already have, and we have a £3,000 penalty for failure to keep records and as far as I can see it has never been imposed - I certainly have not seen any appeals against it, and I would expect to. Most of my clients had records I would classify as somewhere between poor and non existent (I don't regard a bag of 8 bank statements and some receipts as records). I had tried for many years to improve this but they didn't see the benefit to them (where I have I heard that before?) and weren't interested. I would absolutely agree with the statement that better records = more accurate tax liabilities (whether up or down). I would be surprised if anyone on here could disagree.
Are you saying that you allow all tags to go through without review? I'm astonished. I expect my (in-house) bookkeeper to accurately allocate every transaction, normally by viewing the photo receipt and allocating from there. Anything that they are not sure of goes to 'For Review' which flags it up. Bank feeds are great as they give you the source data, and 'rules' work well for some transactions. But not 100% - so we check the bank balance regularly to identify the odd missing one (a mystery) or duplicate (another mystery). They are rare but foul things up if not picked up at the time.
I don't pretend to speak for anyone on MTD. What I try to do is bring an accountant's perspective to the project which would otherwise be absent.
Your suggestion that my "part time" practice cannot represent what goes on in real life is difficult to understand. Do you think therefore that I have hours of time on my hands? Am I less committed to success, or the wellbeing of my staff and clients? What exactly does "part time" imply, if not to somehow reduce my experience as "less"?
The suggestion is that I have no idea what "real" practice is. So my clients are different to yours are they? Somehow less representative of the 'real world'? Far from being easier, running two businesses is a major challenge, for ever trying to balance the needs of both. The sudden need of a client against the fact that I have a lecture to prepare for and deliver.
All I was trying to do was give a bit of hope for the future, based on my experience.
You've got my vote.
Thank you for your comments. When I started my practice I was not a well known tax lecturer, just a mum starting out in business to support my family (my husband was not earning). I went into lecturing to keep me up to date with tax - I found it difficult to keep up to date and knew that if I was teaching it I would have to keep on top of it every day. So I'm not a tax specialist turned practitioner, but a practitioner first. And like many who have been in practice a long time, as you say, you serve businesses out of loyalty and duty rather than any other motivation. What I have not done is dumped clients in favour of more profitable work, as I can make a living alongside my practice through lecturing - which happily I have proved successful at.
My commitment to my client businesses is very important to me - I work (like many on here) evenings and weekends to fit around their needs. But if hairdressers were good at bookkeeping they would not need me - and mine aren't. Accepting that and changing what I did - having failed to change what they did - was my saving. And digital tools allowed me to do that.
In this article I have not expressed my current opinion on MTD at any point. I just wanted to share my experience that the changes are possible. Even for a practice like mine where far from having time on our hands (as one response indicated) we all have other jobs and are incredibly busy.
Up to 25??? I don't actually think there is a limit.
It is 4 updates per business on a quarterly basis - this is just a submission of the data in the records for each quarter on a cumulative basis. Record keeping done = press the button.
Plus one EOPS per business (we already do this - it's called SA103 / SA105 but it will be filed stand alone).
10 separate trades is 10 x 5 = 50 (not kidding)
David, the point in the quarterly submissions is that they are merely a submission of the transactions recorded for the period. They are not returns, nor is anything more needed than to click submit if using software. Obviously more is needed if using spreadsheets as bridging software will have to be used.
Once accountants get the difference between "returns" and "updates" then MTD becomes solely about the accounting records, which have to be digital.
I agree that many businesses and almost all landlords won't see any benefit, but when did changes in the tax system need to be for the benefit of the taxpayer?
John - it has to start somewhere, and whenever it starts it will be flaky. It will improve over time. I don't see that as a reason not to start.
While I'm on I agree with the views on here that there is no (obvious and tangible) benefit to business owners in MTD. Nor was there when self assessment was introduced - a huge increase in workload on the profession and by association our clients. Changes in the tax system come around - the new CGT reporting requirement is utter madness, HICBC even worse, but it is the world we work in. There won't often be a benefit to taxpayers (almost never). But unless we change career it comes with the turf.