MTD: 12 technical questions

questions
iStock_asiseeit_questions
Share this content

MTD for business (MTDfB) is being developed in an agile manner, which allows technical issues to be addressed as and when they arise. However, this means the entire MTD project has not been thought through from end-to-end.

Rationale

HMRC now says its main reason to drive through MTDfB, is to collect more tax from small businesses, particularly those who are trading below the VAT registration threshold. The additional tax revenue will apparently be generated by businesses recording their transactions on a more timely basis, and as a result their accounts will be more accurate, leading to more tax becoming payable. We don’t have to agree with this logic to understand it.

The other justification HMRC offers for MTDfB is that it will help small businesses understand how much tax they need to pay. Using this information, they will be able to make regular voluntarily tax payments throughout the year, which will ease the nasty surprise of the big tax bill which becomes due months after the year end.

Remember, MTDfB is just part of the full MTD project, which will ultimately remove the need for individuals to complete an annual tax return. All the information received by HMRC from third parties will be reflected in the individual’s personal digital tax account, which the individual can access at any time and approve as a correct statement at the appropriate time. 

Mechanics

In summary, these are the seven steps of the MTDfB process:

  1. The business keeps its records in a digital format, on a timely basis
  2. Quarterly update: The business reports to HMRC summaries of income and expenses (in prescribed categories), primarily to prove it has done step one
  3. Reflection: HMRC computer takes the reported results and updates the taxpayer’s digital tax account with the expected tax position. There is no human intervention by HMRC at this stage
  4. Understanding: The business owner accesses their digital tax account which indicates how much tax they will have to pay on profits
  5. End of period statement: The business owner reports to HMRC the final figures for the accounting period including any accounting adjustments. This statement must be made by the earlier of 10 months after the year end, and 31 January after the year end
  6. Figures from step five are reflected in digital tax account and business has final figure of tax due for the trade, but not necessarily for the whole tax year
  7. Final declaration: This is the new name for the SA tax return, which must be filed (as now) by the later of 31 January following end of the tax year, or three months after HMRC sends a notice to the taxpayer to make a return

Questions

1. Partnerships are responsible for keeping the accounting records and making the update report at step two, but that update doesn’t include a partnership share statement. Thus steps three and four do not occur for a partner in a partnership. The partner will only have his digital tax account updated with the tax he has to pay after the partnership has completed step five.

How does MTDfB help a partner understand the tax he has to pay?

2. Unincorporated businesses will be required to start complying with MTDfB from the beginning of the first accounting period that starts on or after 6 April 2018 (if turnover for the last complete accounting period is £83,000 or more), or 6 April 2019, if turnover is less than £83,000 but more than £10,000.

Will there be legislation to prevent businesses from changing their year-end to 31 March, in order to delay falling into to MTD?

3. The quarterly updates must be transmitted using accounting software, including an add-on to a spreadsheet. HMRC will make regulations to define the standards this updated data will be required to meet. HMRC does not expect accountants to intervene at this stage and review each update for accuracy and disallowable items.

If an accountant submits the update on behalf of his client knowing that it contains inaccuracies, is the accountant breaking the professional standards code: Professional Conduct in Relation to Taxation?

4. A business with a 30 April year-end will have to make its end of period statement (step five above) by the earlier of 10 months after the year end or 31 January following the year of assessment. However, the profits for an accounting period: 1 May 2018 to 30 April 2019, will form part of the self assessment for 2019/20, but will have to be reported within that tax year: by 3 January 2020. This is before the end of the tax year (2019/20) for which the profits will be assessed.

How can the tax be calculated for this 30 April accounting period at the time of the end of period statement?  

5. All VAT registered businesses will be required to join MTD from a period start after 1 April 2019 (date not confirmed), in order to make MTD update reports of data which is currently reported on the VAT return.

Will the business have to submit an MTD update alongside the VAT return, or will the VAT return and the MTD update be one and the same process?

6. There have been a number problems which have exposed errors in the standards set for tax return software by HMRC. It is clear that standards which all software producers are obliged to comply with to submit tax returns on line are not in line with tax law in every respect.

Which independent body will audit the MTD software standards set for tax computations, and certify that those standards are compliant with tax law?

7. If the MTD software produces an incorrect calculation of tax liability, so it is impossible to submit the final declaration without creating an error in the tax due, how will the taxpayer submit his final declaration?

Will there be a paper alternative in such cases where the software fails?

8. How will companies report to HMRC each individual dividend they pay to shareholders?

How will HMRC ensure that dividend information ends up on the correct taxpayer’s personal digital tax account? 

9. Trusts will also have to comply with MTDfB if the trust has trading income or rental income in excess of £10,000 for the year. Does a trust have a personal digital tax account?

If the trust doesn’t have such an account how will a trust get a reflection back from HMRC of the tax it should pay?

10. How will banks and companies correctly identify the recipients of interest when reporting to HMRC those interest payments?

How will HMRC allocate the savings income to taxpayer’s personal digital tax accounts?

11. How will a bank know that interest paid to a trustee is paid for the benefit of the trust and not for the trustee personally?

Will the interest end up on the trustee’s personal digital tax account?

12. Individuals who receive rental, partnership, or investment income from abroad often don’t have access to the underlying expenses and receipts.

Will such individuals be required to report such income under MTDfB?

There are a growing number of technical questions about MTD. These are my top dozen. Please add your own questions below and we will endeavour to obtain answers from HMRC or from the tax professional bodies as appropriate.

About Rebecca Cave

Consulting tax editor for Accountingweb.co.uk. I also co-author several annual tax books for Bloomsbury Professional and write newsletters for other publishers.

Replies

Please login or register to join the discussion.

By Tornado
06th Apr 2017 10:56

Thank you Rebecca.

MTD is still c**p, unworkable and unnecessary but your article, in contrast, is brilliant.

Thanks (15)
06th Apr 2017 10:58

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].

Real-time/Daily/Weekly/Monthly/Quarterly?

Thanks (1)
avatar
06th Apr 2017 11:00

Hi Rebecca,

Still unclear on this one....

5.End of period statement: The business owner reports to HMRC the final figures for the accounting period including any accounting adjustments. This statement must be made by the earlier of 10 months after the year end, and 31 January after the year end

So for a December 2019 year end, the earlier of the two is 31 January 2020? A Month to complete the end of year process?

Thanks (11)
avatar
By raju m
to mattoldfield
10th Apr 2017 16:24

For 31 Dec. 2019 year end, the reporting deadline must the earlier of 31 Oct. 2020 or 31 Jan. 2021. Therefore 31 Oct. 2020.

Raju Mehta

Thanks (2)
avatar
to mattoldfield
10th Apr 2017 16:51

I'm pretty sure i've read somewhere that it is 31 January following the end of the tax year in which the accounting period ends. - so it will be October 2020.

Thanks (0)
avatar
By mabzden
06th Apr 2017 11:24

As an Aweb reader, thank you to the three contributors above for asking sensible MTD questions. We've all had a moan (myself included) so maybe it's time to accept this is happening and be constructive.

Thanks (0)
to mabzden
07th Apr 2017 07:47

As one who's been around a good while (I'm 61 this year) far be it from me to come across as against change. Indeed, given a sensible approach, I'll genuinely embrace it and, see it for the opportunity that it might be. After all, it's highly likely that there will be more work around.

My angst surrounds the fact that HMRC isn't leading us down the path of mutual co-operation and adoption of the new systems, it's taken a more arrogant approach and feeds us with information, on a need to know basis. This viewpoint is evidenced in that, even though the ink isn't dry from the recent Budget statement and, the revised criteria hasn't been embedded, pilot schemes, for a "chosen and select" few, are already taking place. Again, I could see the logic in all of this if, over a period of say two or three years, more and more users were able to join this pilot, thus ensuring a modicum of success.

From what I see, on a day to day basis, HMRC is only a shadow of the department, which it once was and, from a professional viewpoint, I've lost much of the respect that I had for it and the people who work there. Much of my contact is; generally inconsistent in response and, even more worrying, occasionally - incompetent. HMRC often ignores legislation and, instead, substitutes HMRC "guidelines"! Take a look at the HMRC website, if that statement doesn't sit well for you.

It's clear that, we on "this side" have to content ourselves with the mushroom diet - kept in the dark and, fed on s**t.

Thanks (15)
avatar
By mabzden
to Chris Mann
06th Apr 2017 13:30

I don't disagree with what you've said. As an Aweb reader I feel all these complaints have been aired (Rebecca's last article attracted nearly 150 comments) and I, for one, feel the debate now needs to move on.

If you feel you're being locked out of the trial process there's a blog post written by one of the software developers involved in the trial. It says anyone can sign up in mid-May, although somehow I doubt there'll be a stampede.

See the link below:
https://www.accountingweb.co.uk/community/blogs/mattbailey/mtd-pilot-day-1

Thanks (1)
avatar
to mabzden
10th Apr 2017 13:08

mabzden wrote:

If you feel you're being locked out of the trial process there's a blog post written by one of the software developers involved in the trial. It says anyone can sign up in mid-May, although somehow I doubt there'll be a stampede.

See the link below:
https://www.accountingweb.co.uk/community/blogs/mattbailey/mtd-pilot-day-1


I would very much have liked to be able to sign up for the trial, as I am really struggling to cope with all of this, but as a partnership, we are unable to do so, so I will have to wait until this goes live!
Thanks (0)
avatar
By suewell
to Chris Mann
07th Apr 2017 08:00

HMRC have launched their version of the NHS fiasco of information sharing. Of which billions were spent trying yo impliment it, but systems crashed, patienter records were mislaid. This will not end well for some of you or for the HMRC who may end up paying huge sums in court costs as I predict lots of complaints and challenges over tax due. Its a hurried plan with no future thinking. Rushed through because of the growing deficit.

Thanks (4)
avatar
By mabzden
06th Apr 2017 11:29

Sorry, a technical hitch occurred and my post was repeated...

Thanks (0)
avatar
By mabzden
06th Apr 2017 11:36

And again. Damn this internet thing. I blame David Gauke.

Thanks (3)
By Tornado
to mabzden
06th Apr 2017 11:35

I can be very constructive given projects and circumstances that are likely to work.

MTD in principle is OK, as many people agree, but there is little to be constructive about in the way it is being introduced at the moment.

Sorry about the technical problems you are having with posts. Think about all those people who are going to be forced to use accounting software that they do not understand. The problems you are having could end up as nasty fines for those that have similar problems in using MTD software.

Fortunately for you, AWEB do not impose fines for such errors.

Thanks (7)
By Tornado
06th Apr 2017 20:00

"MTD for business (MTDfB) is being developed in an agile manner, which allows technical issues to be addressed as and when they arise. However, this means the entire MTD project has not been thought through from end-to-end."

A great definition of 'agile' oft quoted by HMRC and promoted as a feature but in reality it just means that they are making it up as they go along.

What better way to design and create the most significant change to our Tax Administration system in decades then?

Ruth Owen and Jennie Granger are both leaving HMRC in a hurry, long before MTD gets going. Surely they would want to hang on to bask in the glory of the project?

Thanks (5)
06th Apr 2017 11:54

What I find interesting is:

1. What happens if a business met the criteria for MTD, but has filed an unsolicited tax return instead?

2. What happens if HMRC have issued a tax return, MTD path is followed by the business? Ie what happens to fine and penalties for not filing the tax return

Dividends for micro-Ltd co's will be a nightmare to get right as it will mean a huge amount of extra data will need to be submitted. HMRC haven't even started to think about that yet - or at least in public. The only realistic way of doing it will to have something like RTI for dividend decelerations. It will make ACT seems like a good idea.

Thanks (3)
avatar
06th Apr 2017 12:57

Some suggested answers:

1) It won’t.
2) Yes. SchA1 TMA1970 Para 18 (3) [although see also 18(4)]
3) Probably
4) It can’t
5) We don’t know yet; hopefully there’ll be details in the promised condocs.
6) Interesting question – especially given that these days it’s mostly software developers highlighting the flaws to HMRC
7) Yes – s8 (1D)(a) clearly retains non-electronic filing; nothing in 8(1AC) precludes use of non-electronic filing for MTD
8) Goodness knows.
9) Good question
10) For DRD purposes, HMRC allocate joint accounts by £/X where X = number of signatories – and there is no mechanism in law to change that without formal appeal against an incorrect notice, even where HMRC (via Form 19) or the banks already know about the uneven allocation.
11) Question for the Banks, rather than HMRC (though no less important for that) .
12) There’s no indication from Draft SchA1 in the Finance Bill that they won’t be.

Thanks (2)
avatar
to Jason Piper
06th Apr 2017 12:07

And another question:

A taxpayer with only one source of taxable income, a trade with an EoPS, wants to file just once. p/e 30 April, EoPS is all ready to go on 29 Feb next. A SchA1 Para 8(4) declaration should also meet the requirements of s8 (2) TMA as the “Final Declaration”, so here’s your genuine simplification/benefit: finality 10 months after period end, all submitted and done. Except… you can’t file online, in year (The List, Item 1). You have to file the EoPS at PE+10months, but can’t file the Return until April 6 next. How does this make life easier for the taxpayer?

Thanks (1)
avatar
By morgani
06th Apr 2017 12:25

Rebecca,

I like the questions. The answers really are needed as they are essential to the system working.

1 - What happens to allocation of the personal allowance. So when a client reports income for Q1 will HMRC take 1/4 of their PA to work out the likely tax? If yes how will this help a seasonal business? If no then smaller businesses will not get a true reflection i.e. £10000 profit in Q1 = no tax due. Taxpayer thinks great and spends the money. They will then have a shock in Q2.
As for the above how will this apportionment work for anyone with a non standard year end i.e. not 31/3 or 5/4?

2 - If as in your question 4 above how will this work by the time they get to submitting in January 2021? They will then be reporting the 'new tax return' for April 2019 and the end of year summary for April 2020 at the same time. How will this make how mcuh tax they owe clearer? I can see clients paying all of it, none of it or even something else.

Thanks (0)
avatar
By GW
06th Apr 2017 12:34

Another question:
Exactly what and how much detail will have to be kept electronically? I see from what has been released so far HMRC are proposing a Statutory Instrument that lets HMRC issue a "note" that defines what needs to be kept and how, presumably this could be ammended whenever HMRC feels like it without proper scrutiny.

For example: At present in our office we run a spreadsheet to record what goes through the petty cash tin, then approximatly weekly post a journal onto the accounting system for the total of the transactions. Is this going to be allowed or are we supposed to record every pint of milk purchased as a seperate transaction on the accounting system? If we buy milk and stamps in the same visit to the shop, can we record this as one transaction?

Thanks (1)
avatar
to GW
10th Apr 2017 11:09

In this digital nirvana, what possible use could you have for stamps?

Thanks (1)
avatar
to leon0001
10th Apr 2017 12:18

There will also be no time for a break for which you may have previously considered adding milk to a beverage or two either

Thanks (1)
06th Apr 2017 13:25

I want to give this and other articles, a thumbs up.

Sift please bring in thumbs up link to featured articles (also blogs).

Thanks (3)
06th Apr 2017 17:15

A very useful article, the most interesting sentence in which is "we don’t have to agree with this logic to understand it".

Isn't it the other way round? Surely we need to understand the logic to agree with it?

Am I alone in thinking that HMRC's stated justification defies logic? How will any of this improve the quality of record keeping, and in any case who is to say that improved record keeping would not result in a reduction in the tax take rather than an increase.

Thanks (14)
avatar
By 0705736
to johngroganjga
10th Apr 2017 15:40

Presumably HMRC will be scrutinising end-of-period-statements and disallowing lots of adjustments which they will say should have been posted at the time of the transaction, so (as they weren't posted at the time for whatever reason - e.g. bills mislaid down the back of the office sofa and recovered 6 months later) are therefore not allowable.

Thanks (3)
By Tornado
to 0705736
10th Apr 2017 16:13

I am not sure you need to worry too much about HMRC picking up anything and doing something about it. With this sort of 'tick-box' approach to Tax Administration, the idea is to cut the number of people who have any specialist knowledge and use people who do not need any tax and/or accountancy skills.

Sure, MTD is likely to pick up millions (probably billions) of anomalies in the submissions, but HMRC staff, (that would be Rob & Jennifer who are the only ones left), will be unable to cope with even just a fraction of these anomalies and probably push off home early when they have had enough.

HMRC have alienated Accountants, Book-Keepers and other professionals who have been policing the system for years, but if HMRC feel that Rob and Jennifer are up to the job, then good luck to them.

Cue for me to push off home early as well.

Thanks (3)
to Tornado
10th Apr 2017 17:25

I tend to disagree with you. Personally I think HMRC are using the whole exercise as a money maker. They will be hoping that people try to go it alone and not use accountants. This in turn will result in more mistakes, where HMRC will take the P*** with penalty's and the poor [***] at the other end will just accept it because they assume HMRC must be correct and they don't have the knowledge to stick up for themselves.

I think the whole thing has not been thought out and is being rushed through to get the money coming faster. However, I also think it's an opportunity for accountants to significantly increase their fees for the undoubtedly increased workload that will come our way. I for one am already priming my clients for sizeable fee rises in the next year.

Whilst we looked at IXBRL and RTI with trepidation they had a logic behind them and had been thought out relatively clearly. This latest farce on the other hand.....

Thanks (3)
to Tornado
10th Apr 2017 17:25

I tend to disagree with you. Personally I think HMRC are using the whole exercise as a money maker. They will be hoping that people try to go it alone and not use accountants. This in turn will result in more mistakes, where HMRC will take the P*** with penalty's and the poor [***] at the other end will just accept it because they assume HMRC must be correct and they don't have the knowledge to stick up for themselves.

I think the whole thing has not been thought out and is being rushed through to get the money coming faster. However, I also think it's an opportunity for accountants to significantly increase their fees for the undoubtedly increased workload that will come our way. I for one am already priming my clients for sizeable fee rises in the next year.

Whilst we looked at IXBRL and RTI with trepidation they had a logic behind them and had been thought out relatively clearly. This latest farce on the other hand.....

Thanks (0)
to Tornado
10th Apr 2017 17:25

I tend to disagree with you. Personally I think HMRC are using the whole exercise as a money maker. They will be hoping that people try to go it alone and not use accountants. This in turn will result in more mistakes, where HMRC will take the P*** with penalty's and the poor [***] at the other end will just accept it because they assume HMRC must be correct and they don't have the knowledge to stick up for themselves.

I think the whole thing has not been thought out and is being rushed through to get the money coming faster. However, I also think it's an opportunity for accountants to significantly increase their fees for the undoubtedly increased workload that will come our way. I for one am already priming my clients for sizeable fee rises in the next year.

Whilst we looked at IXBRL and RTI with trepidation they had a logic behind them and had been thought out relatively clearly. This latest farce on the other hand.....

Thanks (0)
to Tornado
10th Apr 2017 17:25

I tend to disagree with you. Personally I think HMRC are using the whole exercise as a money maker. They will be hoping that people try to go it alone and not use accountants. This in turn will result in more mistakes, where HMRC will take the P*** with penalty's and the poor [***] at the other end will just accept it because they assume HMRC must be correct and they don't have the knowledge to stick up for themselves.

I think the whole thing has not been thought out and is being rushed through to get the money coming faster. However, I also think it's an opportunity for accountants to significantly increase their fees for the undoubtedly increased workload that will come our way. I for one am already priming my clients for sizeable fee rises in the next year.

Whilst we looked at IXBRL and RTI with trepidation they had a logic behind them and had been thought out relatively clearly. This latest farce on the other hand.....

Thanks (0)
avatar
to rob winder
11th Apr 2017 10:05

Rob have you got hiccups?

Thanks (1)
to johnjenkins
11th Apr 2017 10:12

For some strange reason when I make a post it sometimes appears numerous times!

Thanks (0)
By Tornado
to rob winder
11th Apr 2017 11:12

I think the problem is that it takes a long time for posts to be processed by AWEB after clicking on the 'Submit' button and some people think nothing is happening so press the 'Submit' button again which then sends another copy of the post.

Press 'Submit' once and then wait, perhaps half a minute or more, for the post to be accepted.

You cannot delete duplicate posts but some people edit them to include just a short text of perhaps 'Duplicate Entry'.

We hope that MTD software will be faster and more reliable but who knows?

Thanks (0)
avatar
By 0705736
to Tornado
10th Apr 2017 18:00

Whilst I agree with what you say generally, my comment was based on the assumption that when HMRC conduct an enquiry in future they will expect to look at the end-of-period-statement to make sure that it doesn't include a large wodge of transactions (expenses) which hadn't been posted at the correct time (i.e. when they were incurred) or which aren't backed up by vouchers. HMRC have understandably been trying for years to eliminate estimates from accounts, and it seems to me that quarterly "updates" based on the actual transactions for a period are their latest weapon in that fight. I certainly didn't mean to imply that they would be going through all these updates etc as they come in, but if you're picked out for an enquiry then they will surely have a look to see whether you've made an effort to comply with the new system, otherwise why bother with it all?

Thanks (1)
avatar
to 0705736
11th Apr 2017 10:09

If you start eliminating estimates with expenses then you have to disallow an estimated add back for personal use. What about an estimate for "cash work"?
I don't see any difference in Income and expenditure, just the way it's reported.

Thanks (0)
By Locutus
06th Apr 2017 19:20

HMRC now says its main reason to drive through MTDfB, is to collect more tax from small businesses, particularly those who are trading below the VAT registration threshold. The additional tax revenue will apparently be generated by businesses recording their transactions on a more timely basis, and as a result, their accounts will be more accurate, leading to more tax becoming payable.

But genuine errors are both ways.

The other justification HMRC offers for MTDfB is that it will help small businesses understand how much tax they need to pay.

But they won't know what their real tax liabilities until after the end of year adjustments have been made.

It is this sort of muddled thinking within HMRC or probably more likely The Treasury that has lead to this mess.

Thanks (6)
avatar
By Matrix
06th Apr 2017 21:49

My question is whether there has to be a reconciliation between the quarterly returns and the end of period statement?

Thanks (2)
avatar
to Matrix
10th Apr 2017 16:37

Per the HMRC webinar on MTDfB at the end of March they do not intend for there to be a reconciliation of the quarterly submissions to the year end one - the reason, they say, for MTDfB is to ensure businesses record their transactions digitally.

Thanks (0)
to JamesLambert
10th Apr 2017 17:44

I'm not trying to be flippant with you James, but with HMRC:
So we can put in zero quarterly returns and not worry about the records until the end of the year then put the final accounts in?

So a lot of people once they realise this will stick to fingers up to MTD and more or less continue as usual?

"the reason, they say, for MTDfB is to ensure businesses record their transactions digitally." - presumably this includes manually inputting data into some digital media to report to HMRC. So its just as likely to be riddled with errors as the current method of... manually inputting data into a software package.

They seem to be creating a lot more work for all concerned for no real benefit.

Thanks (2)
06th Apr 2017 21:55

Who decided to add the fb to MTD to now become MTDfb.

For business is the last thing this pile of crap is.
Who makes this up.

How will cramming the information together within 4 weeks of the quarter end make it more accurate, most of accounts will be full of estimates.

Thanks (8)
avatar
to Glennzy
07th Apr 2017 10:20

Well said Glennzy!
I could think of other words for fb instead of for business :)

Thanks (4)
avatar
07th Apr 2017 16:58

I wonder how many small businesses will be encouraged to take cash but ensure they pay for expenses via card....yes I really see how this will ensure that the tax take goes up.

They obviously missed the day the 7 P's were taught: Proper Planning and Preparation Prevents Pi$$ Poor Performance...and let us be in no doubt....we may have to accept this croc of $hit but I will live to see someone land on Uranus before this achieves its original goals....

Thanks (3)
avatar
09th Apr 2017 13:56

Good thought provoking article. My questions:

1. Are cloud accounting companies updating their software so it works for month ends on the 5th?

2. The legislation says that MTD reports have to be submitted every three months, but does it say that these have to fit in with the business's year end? Otherwise I will divide my clients into three groups regardless of their year end date so I can spread the work evenly between the months and have some hope of surviving. I can see some distinct advantages if the two don't tie up, and no disadvantage, as I can do the yearend with the next quarterly submission.

3. I think I read somewhere that the overlap relief fiasco will disappear come MTD. Did I imagine that? If it has I can spread my clients' yearends over January, February, and March, spreading the workload, maximising the time frame for final accounts and making question 2 irrelevant.

4. Is there anything in the legislation, pipeline, or HMRC guidance regarding arbitrarily changing yearends?

fb - polite abbreviation of FUBAR? Maybe someone at HMRC has had a premonition!

Thanks (0)
avatar
By MontyB
to Digit Dabbler
10th Apr 2017 11:01

Not polite, but SNAFU is probably more apt in describing this latest HMRC fiasco................

Thanks (0)
avatar
to Digit Dabbler
10th Apr 2017 16:40

Re point 3 they did mention getting rid of overlap profits but any decision on that has been deferred.

Therefore in relation to point 4 you will be subject to the existing rules regarding changing a year end.

Thanks (0)
avatar
10th Apr 2017 11:07

Two things make me laugh on Making Tax Difficult (and now MTDfb- does the FB stand for Fu***** Bol*****):

HMRC thinks clients will voluntarily pay tax sooner. Cloud coo coo land.

HMRC thinks clients have nothing better to do than learn to use and understand a cloud based accounts system just so they can report figures to HMRC..with no accountancy training whatsoever.

I'm amused to think of the average subcontractor enthusiastically scanning all their receipts and ensuring all their records are up to date!

How exactly are HMRC going to enforce the move to a digital format on a timely basis?

How many additional employees will they need to deal with the huge pile of penalties for non-compliance, not to mention those that just decide it's all too much like hard work and drop out of the system altogether?

There is a real danger this will trigger more non-compliance and more people will be tempted to join the black economy. Which defeats HMRC's stated aim of making people pay more tax by removing accountants from the loop at the reporting stage. Who do they really think will be producing the figures for clients?

Thanks (11)
avatar
By Ammie
10th Apr 2017 11:08

Very straight forward, now convince the one man bad struggling to earn a crust and who cannot get to grips with the very basics. Irrespective of whether an accountant wants dealings with such clientele the fact remains they exist, and do so in abundance. HMRC have already started printing the penalties notices.

What a perfect world we live in and HMRC have plans to make it utopia. I have died and gone to heaven. LOL!

The next two years should be interesting and fun!!

Thanks (2)
avatar
10th Apr 2017 11:15

For some reason I thought that 31st March year ends were being treated the same as 5th April. I could really do with knowing for sure about this as quite a lot of my clients have 31st March year ends, so those that I have told will be under the regime from April 2018, may actually have another year? Is that correct?

Thanks (3)
avatar
10th Apr 2017 11:17

Will my CIS subcontractors, where they fall into the self-employed category between £10,000 and £82,999 p.a through MTD be able to claim any refunds due throgh a quarterly claim basis?

Thanks (1)
avatar
By stanbu
10th Apr 2017 11:22

Another question:

Commercial property owned jointly, not a partnership, with net property income well above 83,000. Some individuals have a share of income above 83,000, others have a share below 83,000.

When does MTD apply to this investment, 2018 or 2019? Or is it part 2018 and remainder 2019?

Thanks (2)
avatar
10th Apr 2017 11:24

Some more questions:
How does the holder of a Lasting Power of Attorney for an incapacitated individual get access to that person's personal digital tax account?
Will traders registered for annual VAT accounting have to go onto quarterly digital reporting?
Is there any published guidance for trustees of trusts?
Is there any guidance for estates of deceased individuals, particularly before grant of representation?
When will we get some hard information?

Thanks (3)

Pages