Member Since: 18th Jan 2005
2nd May 2018
..... God help us all if Brexit ends up getting scrapped too!
2nd May 2018
In my opinion this is heading in one, perhaps logical, destination which will be that quarterly reporting under MTD would ultimately only apply to VAT registered businesses.
That would then mean that the data from the VAT submissions would be used to estimate the tax liability with the year end process then also being made via software.
MTD and quarterly reporting for businesses with a turnover below £85k has always been the one part of this that I felt was going to risk going out of control. Perhaps the risk of such an unrealistic strategy being rolled out is reducing - at least until technology and more widespread behaviour by people make that a logical development (people are certainly not there yet).
We've been migrating clients to the cloud now for 18 months starting with the largest and working our way down. However, we've done it for the right reasons and not because of MTD and I have to say that I am starting to see that the year end process for us is going to be easier than was the case previously.
All MTD has achieved so far in my opinion is to cause a lot of us an awful lot of stress and anxiety worrying about how on earth we would cope.
But it forced us to move forward towards the cloud and, actually, that's been a good thing.
22nd Mar 2018
Interesting to also note they will be basing it on the QB data.
You have to wonder whether they will expect verification from a third party, e.g. accountant, to sign off such applications.
Based on recent experience over the last month the direction of travel is very much seeing new businesses signing up for cloud accounting believing the "accounts done" hype and then quite quickly realising there's a lot more to accounts/tax return prep than just putting numbers into software.
Three new clients via the QBO find an accountant service in a month offers represents a growth for us of 1% in clientele at a time when small businesses at large still have no real knowledge/understanding of what MTD means. I have to wonder whether we should all be prepared for an avalanche of work in the next few years as people realise they simply can't/don't want to do accounts. There's a lot more to it than simply attaching a bank feed and hoping for the best.
Saying all that though there's no doubt that businesses who are interested in their accounts, and are pro-active with us as their accountants, are dream cloud clients to have and the adding on of more complimentary services to the cloud offering can only be good.
However, in contrast to some firms who promote "cloud or nothing" to their clients, then I actually think there will be more than one solution to MTD and we have to be prepared to be flexible along the way.
9th Jan 2018
My view is a selfish one which is simply that I don’t want to carry January to February
I’d be well within my rights at the moment to tell about 30 clients that they’ll be late but instead I tell them and any of the other 28 we are waiting on that they need to get the records to us and we will do our best but no guarantee (we only guarantee if instructed by 30 September)
If we told them tough you’re late then the next thing I know it will be the end of April and we will be chasing to avoid £10 a day penalties
So these days I’d confess our January is self inflicted / chosen just to avoid carry over to February
I like the line in the sand of 2017 returns done and to look forward not back
6th Jan 2018
Easier said than done when you get the troops in on a Saturday and all the HMRC systems are broken!
23rd Nov 2017
I don't agree with the assumption that end clients will suddenly wish to convert contractors to employees.
The rules are actually that the service company will suffer tax deduction but does that then imply that the director of that company is then entitled to holiday pay etc?
Assuming it doesn't then you have a position where the end client may decide they want the best of both worlds e.g. the flexibility of using a third party contractor and peace of mind that, tax-wise, they are doing the right thing as, after all, if they are engaging for a shorter duration contract then they are unlikely to want the commitment to a new employee
The whole mutuality of obligation kicks in here too - the end client may have no responsibility, or intention, to give more work and that's where the balance starts to look uneasy.
So then you'd find a chunk of contractors (who are working long term for one end client and therefore you can say "fair enough") do switch to PAYE but that others retain independence, potentially suffer larger tax deductions on some contracts, but then as it settles undoubtedly argue better rates with the end client as the rules of supply and demand kick in.......
Or they "genuinely" just change the way they work either way we all know that working practices will change for such contracts.
22nd Nov 2017
The devil in the detail:
3.7 Off-payroll working in the private sector – The government reformed the off-payroll
working rules (known as IR35) for engagements in the public sector in April 2017. Early
indications are that public sector compliance is increasing as a result, and therefore a possible
next step would be to extend the reforms to the private sector, to ensure individuals who
effectively work as employees are taxed as employees even if they choose to structure their work
through a company. It is right that the government take account of the needs of businesses and
individuals who would implement any change. Therefore the government will carefully consult
on how to tackle non-compliance in the private sector, drawing on the experience of the public
sector reforms, including through external research already commissioned by the government
and due to be published in 2018.
22nd Nov 2017
I totally agree with you Roy and, whilst we have been rolling QuickBooks Online out from our largest clients down, so far this year there has not been a single client that has decided to start dealing with the prep/management of their accounts themselves.
Just this week three clients contacted me with queries about getting information from QuickBooks (where we do all the data entry/management) and one now wants us to prepare budgets etc next year for them - a real breakthrough moment. The trend is that clients are seeing this as a step up in our service not an expectation of a step down in our bills.
Ultimately for all the advancement of tech, datafeeds etc require review and that requires knowledge to know if something is right or wrong. Bankfeed data learns but only if you teach it correctly in the first place.
For our smallest business clients then, lets be honest, they are never going to want to become bookkeepers and if we get their systems running smoothly then why would they want to jump ship?
Personally I'm glad we chose QuickBooks over the hype of others as at this point I feel that we are in control. Clients actually tend to be more scared of software than they would have been, say, to a red ledger book but the reality is still the same which is that if clients present us with data there is inherent risk and most importantly they are going to be spending their time and later in the year paying us for our time in fixing it.
QuickBooks Assistant sounds like something we can sell to our clients as an added benefit e.g. if we are helping you manage your accounts then when you ask the question you can have greater confidence that the answer you get back will be correct. When you think about it as well, being able to ask a question such as "what was my profit in January" is better than a client trying to manually find the report.
18 months ago this all scared the hell out of me but right now we all need to force ourselves to take a leap of faith.
I'm hoping the leap of faith will ultimately maintain our fee level, or increase, and reduce our working week down to a lovely round number like 40 but that is truly a leap of faith!
18th Nov 2017
Bank feed and automatic ‘coding’ is all well and good and may be reasonably reliable but it still needs overseeing and management.
More submissions and deadlines will make us managers of data rather than creators of data and the same may be said for bookkeepers.
To put it another way we are in charge of the robots.
For now though the simple fact remains that with bills and receipts it’s easier for the client to just bag things up and it’s quicker for my staff to enter (into cloud software) the bills manually rather than take a photo or scan and then code each one which is a FAR longer process than my staff entering between 2-4 per minute at a normal pace
And as for jobs of the future well, right now, think of those thousands of trainees studying aat etc reading the tone of the article.
12th Nov 2017
The problem then becomes the fact that many businesses will not want to take contractors on as employees so, whereas you might assume that these changes spell the end of one man band contractor companies, in fact they will still be in demand but the negotiation as to contract price will become rather more heated.
Surely the issue is separating short-term contracts from longer term contracts? Longer term contracts where contract A moves to A+ moves to A+++ dodging the rules with clever contract wording should be the target but three-six month assignments being hit as well? In my opinion that will just cause an initial rush to take the PAYE roles followed by a demand -v- supply price change as the pool of contractors constricts and the tax ends up getting passed to 1. the business engager and 2. their customers.
In the real world business wants the ability to hire and fire at will depending on the contractors performance - easy to do with a contractor but try to do that with an employee! Warning 1, warning 2, final warning - risk of wrongful dismissal claim etc etc - many might prefer to pay the contractor a bit more to remove that problem.
Surely just the existance of the fact that the client could just dismiss them is an indicator of independence and risk, and the fact the genuine independent contractor would accept that is evidence of it? I don't recall ever seeing such a direct question on the employment status indicator tool?