MTD webinar falls short of expectations

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If you are interested in Making Tax Digital (MTD), but don’t want to tackle the 243 pages and 116 consultation questions in the seven consultation documents, you might want to consider the HMRC webinar service.

It's a seminar you attend from your own desk: you can hear HMRC staff talking live (either by using the sound on your computer or else by dialing in over the phone) and watch a simultaneous slide set on your screen. You can also interact with the presenters by typing questions into a text box, and by voting in a couple of interactive instant polls.

Unfortunately, as the interaction is all controlled by HMRC (you can hear them, but they can’t hear you) there’s a certain amount of spin. For example, when I sat in on a webinar last week the presenter started by explaining that “businesses are already required to keep up to date records…” Are they though? I thought the requirement was to keep “adequate” records, and who is to say that sticking your invoices and receipts in a bag and asking your accountant to type them up once a year is inadequate for the very smallest businesses?

When I typed that question into the onscreen box, it took a while for it to be dealt with and then the answer which came back was:

“Through keeping up-to-date records in near real time instead of by processing paperwork at the year-end, businesses are less likely to lose receipts or to make basic errors. This also makes good business sense, gives them a better overview of their position through the year, and ensures that businesses have ready access to their financial information. Prompts built into digital tools will eliminate common errors, giving businesses greater certainty that they’ve got their tax right first time.”

Well yes, but that is the justification HMRC are using for introducing MTD rather than an answer to the question about the definition of records in the legislation. “Up to date,” or “adequate”? What is the definition now, and does HMRC plan to change it for MTD?

The presenter went on to explain that “there is a demand for digital”. My scribbled contemporaneous notes go a bit squiggly at that point, as there was no way to argue with her and say, yes, there is a demand for HMRC to engage digitally by - for example - letting people communicate with them by email. But that isn’t the same as a “demand” for a compulsory system of digital recordkeeping - I’m not at all sure there’s an appetite for that.

At this point we broke for a quick poll of what we thought the threshold might be for businesses to get an extra year to prepare. This is in the context of HMRC planning to make MTD mandatory for businesses with a turnover of more than £10,000 from April 2018, but to allow the very smallest businesses over that threshold to have a further year before the system becomes mandatory for them. The offered options were £15,000, £20,000 and more than £20,000. 

The responses from that particular webinar were:

  • 15,000 - 9%
  • 20,000 - 22%
  • More - 69%

This is a reflection on the apparent speed with which the whole project is moving: responses to the consultation documents are due by 7 November but the draft legislation (for inclusion in the 2017 Finance Bill) will be published for comment on 5 December. As one text exchange said:

“The consultation document says that the first software will be available in autumn 2016. Well, it is autumn 2016 now, so where is the software?”

The reply was: “HMRC are working with the software industry to get these developed. There will be more information on this shortly.”

Finally, there was an audience question on what and how many ‘errors’ do you get that you need to reduce?. The response was: “The published tax gap due to failure to take reasonable care and error is £6.5 billion."

At this point I’d given up on trying to interact with the webinar and was on Twitter saying “Funny how the actual business recordkeeping interventions programme didn’t find that missing £6.5bn eh? #MTD”

 

For readers interested in HMRC's wider approach to consultation, AccountingWEB recently attended a face-to-face Making Tax Digital for Business consultation event.

To respond to the consultation documents, Rebecca Benneyworth has put together a resource pack. Also visit the Making Tax Digital page on AccountingWEB to read the latest news and analysis.

About Wendy Bradley

Wendy Bradley is a retired tax inspector, now working as a freelance journalist.

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29th Sep 2016 12:35

I watched this - it was embarrassing that the HMRC staff did not appear convinced by their own arguments re the need for MTD. They came across as very uneasy with the whole concept. Needless to say none of my (extremely critical) comments were answered.

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29th Sep 2016 13:33

I also attended this farce.
HMRC have spin and that's all it was. I also made comments and asked questions but none of mine (as usual) were answered.
I hate the whole process of HMRC censoring these events.
The whole proposal will become reality because like everything else HMRC wants, HMRC gets and I think the powers that be who run out professional bodies are too cosy with HMRC.
It is about time we as a body, the front line accountants and tax advisors say to HMRC enough is enough! Get back to basics and lets start by calling taxpayers, taxpayers.

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29th Sep 2016 13:51

I didn't attend the webinar. I agree with all the criticisms concerning the pointlessness of it all, and the plight of small businesses who don't wish to cope with digital record keeping. What I am beginning to ponder is the situation of medium size businesses, who maintain standard accounting software, often bespoke in nature. How are these going to cope with quarterly reporting? Within the proposed time frame?

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29th Sep 2016 14:37

Sounds like a replay of the webinar on the "2019 retrospective tax charge on contractor loans".
Looks like we didn't miss out.

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29th Sep 2016 16:41

I probably attended a webinar on a different date as the poll results were slightly different: The "More" option referred to above hit 73% on my webinar.

I felt the HMRC staff made a decent attempt to answer as many procedural questions as possible, from which I derived the following key take-aways (I have a Chat Log of the session to back this up):

1) You will only be penalised (subject to criteria yet to be determined) for a *late* quarterly return. The *information* in each return can be modified in subsequent quarters and you only sign up to the accuracy of the numbers in the final year-end submission. There will be no penalties for incorrect quarterly updates.

2) All accounting /tax adjustments (accruals basis, stock, capital allowances etc.) can be left out until the final year-end submission.

3) Frequency of tax payments will not be mandated to increase during the life of this Parliament. Payment dates will not change.

From the above, the quarterly information, categorically, cannot be relied upon for a more accurate tax assessment, and the collection of tax will not be accelerated.

Given these clarifications, I was suddenly struggling to understand the point of the whole expensive exercise? Unfortunately, my question to HMRC staff on this wider point remained unanswered :-)

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29th Sep 2016 17:34

@Jonothan The "why" is simple ; HMRC are implementing a political hobby horse, which is blind. lame and will fall at the first hurdle.

HMRC do not ask "why?", they just do as they are told, and keep repeating the mumbo jumbo about better record keeping.

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29th Sep 2016 17:59

I too attended this one thinking that it would be worthwhile breaking my vow of never attending any - 'Talking points' or 'Working Together' again. I should have known better - waste of time.
I too feel sorry for the presenters (OK they could always refuse to do the presentation) but they are only pushing HMRC's view (make that 'dream' ....
https://www.accountingweb.co.uk/tax/hmrc-policy/making-tax-digital-hmrc-...)
The Working Together face to face meetings were much better - you actually felt you were getting somewhere But only about half a dozen of us ever turned up. Apparently about 780+ listened in this time.
I wouldnt waste your time next time - you would be better employed responding to the questions asked in the Consultation Documents with a cc to your MP.

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30th Sep 2016 09:16

So, no accurate quarterly reports required (and how would HMRC know if they were complete fiction?) no change to the collection of tax and no clue how their 'customers' will take to this nonsense. Reminds me when I worked for a high street bank when the staff were required to submit regular answers to questionnaires on selling 'stuff' (credit cards and life insurance-we all know how that ended up). Out of pique I randomly ticked the boxes and obtained low score. Chastised by my manager, next time I went round all the staff with the correct answers and made sure we got a 100% score - and 'won' a hanging barometer. Deep joy!

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By AJS1
30th Sep 2016 12:21

Despite all the information about MTD out there I still don't get it. Having run my own practice for 27 years and can't even see the logic behind this.

If they want quarterly accounts, just say so and they will be prepared and submitted like you do with vat returns. None of this MTD rubbish. When RTI came out then I got that, this I don't

We all know that it is about getting more money from the taxpayers and yes self employed are poor at keeping records, but this will not help solve the problem but create even more them and us situations. Years ago you would pick the phone up chat a situation through with an inspector and sort it. Whilst the helpline to SA is good IMO now a days, we all no that it won't sort the issue out.

We carry on until they move the goal posts again.

One day HMRC might actually tell us what this all means..........!

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30th Sep 2016 13:21

Has anyone been to one of the face-to-face meetings yet? I am considering going but there are none close by so it will be a lot of travelling for little point if it goes along the lines of the webinar by the sounds of it!

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to justtoconfirm
03rd Oct 2016 11:04

justtoconfirm wrote:

Has anyone been to one of the face-to-face meetings yet? I am considering going but there are none close by so it will be a lot of travelling for little point if it goes along the lines of the webinar by the sounds of it!


I went to a face-to-face meeting fairly early on in these proceedings and discovered that HMRC could not answer any question that was outside the standard responses. I suspect the same will apply now, so will not bother going out of my way to attend.
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to Homeworker
03rd Oct 2016 20:36

I went to a face to face event where the HMRC officer didn't know the difference between a sole trader and a company so what hope do we have.

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By gordo
30th Sep 2016 20:46

Can we send this thread to HMRC as a response the 'condoc'?

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03rd Oct 2016 10:48

What did you expect? It's HMRC. They have decided to do something, and are now wheeling out the same spin used for every change that has a detrimental effect on people just trying to run a business. Nothing you say to them will make them change their minds.

Don't waste time trying to change their minds, just wait for the 'final' version to arrive then work out the easiest way of dealing with it.

For those once a year small clients, it's 4 estimates based on last year and the final actual figures after the year end. If HMRC think they will force micro businesses to embrace digital they have another think coming, especially for the older generation.

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03rd Oct 2016 10:51

I think that the above is an honest and accurate picture of a lot of HMRC webinars and round table discussions. I have attended some of these and basically if you ask a question that is not on the crib sheet of responses, it's either ignored (lack of time), or kicked into the long grass (that's a level of detail we've yet to get to).
The impression given is that somebody in HMRC policy has said "this is the answer we want" and has then backsolved the consultation/discovery phases of the interaction with advisers. The ONLY objective is to give HMRC a tick in the box that the consultation has taken place (which is then ignored and forgotten). MTD is one area. We will see it in IR35, disguised remuneration, deterrents to avoidance, etc.
The only way to bring HMRC to book would be for the entire profession to withdraw any form of cooperation with what is a broken system. That though will never happen.
In the meantime HMRC will continue to go through the motions and tick their boxes and their masters will continue to claim that they are listening. All ery pointless and not a little depressing.

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03rd Oct 2016 11:00

I joined one of these webinars for the first time (and last) it was a waste of time like mtd is going to be

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03rd Oct 2016 11:22

A colleague of mine attended an "Iris World" seminar in Birmingham last Thursday and there was an HMRC Spin-doctor there to discuss MTD. Apparently he got a right mauling from Anita Monteith so perhaps I was too harsh on our representatives.

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By Peter-S
03rd Oct 2016 11:28

So what HMRC are implying is that those clients that currently keep up to date records and use a computer package to do so do not make basic errors. Fascinating world they live in.

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03rd Oct 2016 11:38

As usual, HMRC provide very low level staff to host these webinars, so they don't understand the level of detail required to cover the issues that experienced accountants are concerned about. Much of the presentation is "fluff", aimed at an inexperienced audience and talks about the generalities of "being digital", rather than the realities and implications of forcing businesses to file something (anything) FOUR times DURING each year, rather than ONCE, many months AFTER the end of each year.

Since the webinar information flow is almost exclusively one-way, HMRC could provide a much better service by having senior staff put together a much more detailed presentation aimed at a higher level audience. This presentation should deal with the important questions that the accounting profession have expressed great concern about (eg on aWEB) and not waste our time with the generalities. This need only be recorded once and made available at any time to the target audience.

Why waste HMRC time setting up and presenting multiple live sessions? The only "return" communication is via written questions from the audience and, since the webinar audience attendees are chosen at random, the questions from all webinars are just as relevant (or irrelevant) to any attendee of any webinar, so HMRC could add a list of all of the key questions and answers to a single webinar recording, or to a web page listing key questions and answers.

This process feels like HMRC are offloading the important issue of getting feedback from the profession by delegating it to junior staff as they don't really care what we think. Why should they? After all, it's not like HMRC understand that we have experience of how a small business really operates! Doing it this way allows HMRC to claim that they have got feedback from x thousand accountants and that they have taken our views into account. Any commercial business that dealt with its "customers" (sic) this way would be bust inside a year.

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03rd Oct 2016 11:49

The problem with withdrawing co-operation is that it is not for Accountants (Agents) to take the high ground. It is for the small business (by it's representatives (not us)) to say to government via their MP's that this is not a workable proposal and we will block the tunnel if you don't think again. Will it happen? We could play our Trump card and get Farage to organise something.

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03rd Oct 2016 12:36

Consultation period ends 7th November 2016, Draft Legislation to be presented 5th December 2016. There's no way the Draft legislation can take full account of the responses gleaned from the consultation in just 4 weeks. I'm hoping that the Treasury will have the good sense to bring in a de minimis turnover level for 2018/19 of £83,000 (same as VAT threshold) and buy themselves and the many millions of small business another 12 months to get MTD right.

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03rd Oct 2016 12:48

I read the entire consultation documents and got the impression it was written by a sixth former as part of a school project.

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03rd Oct 2016 12:57

I don't actually need to read all of this to know I agree with it. Perhaps the question box should allow us to ask HMRC staff if they could prepare client information, either from the cornflakes packet, or the duplicated pdfs of CC payments for unidentified private expenditure at a shop indicated only by its address, at an industrial estate with 30 separate units, all with the same street address.

*edited for word missing because thought it but didn't type it. Perhaps HMRC should be asked if they could spot their own mistake so quickly and correct it.

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By taxinfo
03rd Oct 2016 13:04

I agree Steve. I don't need to read all of this to know I'm a naysayer but I have done.

The thing is ... the unfortunate front line HMRC drones who are charged with offloading this (insert your free choice of descriptive word here) nonsense do not, and never will, know the answer to the most crucial question of all.......

WHY?

What is the point of this?

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03rd Oct 2016 13:27

Like a few of the responses on here, I too attended the Webinar, asked questions, got some "stock" answers but again most were ignored.
On one of the Webinars I attended, I asked the question - What about Accounting Standards. The reply was not published but the answer was "what are they?".
I have written to my local MP and the BBC but don't hold out much hope that I will be heard.

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By malc901
03rd Oct 2016 14:23

At present the only discussions I've seen are within the accountancy profession and there is little awareness of these proposals by the general public. Once they become more aware I foresee a large backlash against them. I'm surprised the topic has not been taken up by any newspapers or other media organisations.

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03rd Oct 2016 15:38

That's because today's meeja is another Gov't propaganda mule, just like HMRC.

The days of intelligent, investigative journalism are largely over.

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to Nick Graves
03rd Oct 2016 16:44

C'mon Nick. Are you really saying that Kim getting robbed of £2m jewelry isn't worth headline news (especially the bit about being tied up).

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to johnjenkins
03rd Oct 2016 17:08

johnjenkins wrote:

C'mon Nick. Are you really saying that Kim getting robbed of £2m jewelry isn't worth headline news (especially the bit about being tied up).

TTIUWP!

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to Nick Graves
03rd Oct 2016 17:21

Use your imagination. That's what HMRC are doing.

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By kfh
03rd Oct 2016 16:41

As a small business it is hard enough doing the work and the paper work associated with that without trying to do quarterly accounting, even approximately. I can see a big driver for a cash economy here. Until they do away with cash that is.
I am surprised that anyone expects better from any Government department or Government in general. I doubt that any senior civil servants have any real business experience and if they are to get on they have to “get with the agenda”, doubtlessly thought up at great expense to the tax payer by the graduate trainees from the large consultancies. Don’t let me start on my experiences with them. I was one of the civil servants who did not “get with the agenda” and got things done instead, it was hard work. Our career politicians are more interested in attaining and retaining power than helping their constituents, with a few notable exceptions, and are more interested in playing politics than doing anything constructive.

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03rd Oct 2016 17:40

have a go - you know you want to!

Tuesday 25 October 13:00 to 14:00 Register now for this session
Subject – Making Tax Digital: An opportunity to give us your views and responses to the six Consultation Documents released on 15th August 2016.
These interactive sessions will be run on the ‘CITRIX’ platform.
The organiser will run through how to ask questions on the day. If you have any questions for our subject matter expert prior to the meeting, please send them to: [email protected].
There are also 20 Agent Toolkits available for you to download and use.

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By taxinfo
03rd Oct 2016 19:01

OK. Time for us all to swamp the event in DDOS style.

For any who haven't seen this yet ....
https://www.accountancyage.com/2016/10/03/mtd-a-multi-billion-pound-cost...

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By RobertD
to taxinfo
04th Oct 2016 05:11

taxinfo wrote:

OK. Time for us all to swamp the event in DDOS style.

For any who haven't seen this yet ....
https://www.accountancyage.com/2016/10/03/mtd-a-multi-billion-pound-cost...

£1,250 cost for the transition to MTD! What about the ongoing costs?
HMRC will throw a £750 incentive over 3/4 years like they did for Paye and believe that's fair.

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By crislar
03rd Oct 2016 19:02

With HMRC webservices on IPv4 Internet addressing only and no plan to be publicly available on IPv6 addressing I fail to see how the Government can claim to be fully *online* itself and start to lecture businesses particularly fellow professionals on managing online services for all UK enterprises.

For those who are not technical. The Internet ran out of new IPv4 addresses a couple of years ago. This means that increasingly the edge of the Internet in the UK is sharing addresses in ways that can and does break applications and security protocols. IPv6 its replacement is available but the Government has for years refused to adopt it. Even last summer 2015 the Government CTO claimed IPv6 is not needed.

So the digital divide in UK is very deep. The deepest bit is inside the public sector. The same issue can be seen higher up the stack in the applications and data handling at HMRC.

Dependency on a few core suppliers deploying closed source applications using hidden algorithms to determine what is in effect law needs far greater public scrutiny and time to do that scrutiny than the MTD program as an example is allowing.

HMRC are trying to update themselves. That is laudable. But the problem with tax is not down to the reporting from micro businesses or indeed the tax reporting by any businesses but in the byzantine complexities of the tax code and underlying political incentives to micro manage the economy and not simplify tax.

A capability to digitise government is something snake oil salesmen like to push but in practice cannot deliver without changing the analog ways of Government. Something then has to give when digitising deep services such as MTD happens.

The casualty here is the privacy of the citizen and the business entity to work with their advisors of choice by limiting the capacity or space that is needed to plan effectively.

Accounting is not just reporting a predefined view of what happened. It is as much about developing a view or interpretation and planning ahead to create and develop successful enterprises.

HMRC is not a partner to businesses. It is there for one purpose only to maximise the tax take and that requires defensive capacity for taxpayers to ensure that take is correct, fair and understandable.

The smallest businesses (micro) under the VAT threshold should certainly in my view not be included in any online always on reporting service. If they are today not doing this with their bookkeepers then how can HMRC expect realistically them to do this direct with them?

SMEs often use open and free source software and data formats. Accountants need to respect this and generally do. But particularly HMRC like the whole of Government needs to support the research and development to ensure that such software and tools are available and maintained.

Just arguing that commercial vendors will support the "market" for MTD is not sufficient market support to provide the level of effective choice and security UK Businesses deserve and should expect from their Government.

To build such a capability will take some years as well as a change in thinking and application within the public sector in how it works with the public.

Accountants can now MTD has been raised take a leading role in guiding HMRC and other Public Sector bodies to see and that their are broader responsibilities and issues that must be addressed collectively for public sector digitisation to become a success.

Thanks (9)
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03rd Oct 2016 19:05

It would be great if business organisations got involved. But if you look at the Federation of Small Businesses website, there isn't much on MTD, and what there is appears to be pretty much in favour, and very little by way of critique of the proposals, and nothing recent. There are also plenty of accountants websites appearing to praise the coming revolution, or just re-presenting HMRC's view. It's only on AW that I have seen what I regard as cogent criticism

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03rd Oct 2016 20:17

What no-one has asked is why one department of HMRC doesn't understand another.
HMRC have spent years preaching to the small businesses of our economy trying to sell them the benefits of the VAT Flat Rate scheme, thus simplifying their quarterly accounting to just turnover. Will an estimate of "NIL" for purchases for three quarters of the year still be acceptable? If the answer is yes, then what has MTD achieved? If not, then HMRC has to admit that it is an increased burden on the smaller business.

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By RobertD
04th Oct 2016 05:05

Some clear thinking here in this piece by Judith Knott

https://judithknott.wordpress.com/2016/10/02/why-how-and-when-some-funda...

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By RedFive
04th Oct 2016 08:44

Announcement yesterday from Hammond about the Brexit process and first priority is to give stability to business during the process.

How can introducing MTD during the same timescale be stability?

I will also repeat my comments from elsewhere here.

The biggest problem with MTD is the myth peddled by cloud bookkeeping software vendors in how easy it all is and can be done 'at a touch of a button'. Whether it is Xero, Sage One, Quickbooks online or any other they are all as good as an Aldi sausage. Nice packaging but full of air, water and bulls testicles.

HMRC are not concerned about the crap that will be submitted as it will give them a nice easy earner of penalties for years to come once the full reality of MTD is implemented post 2020. All picked up by monkeys in a foreign country on tuppence an hour who can log in, view the s#%t# submitted then laugh all the way to the bank as they see the millionth sole trader having put through drawings as tax deductible wages.

Won't happen on my watch though as I'll be controlling and submitting the quarterly updates provided we are not legislated out as Agents.

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04th Oct 2016 13:34

MTD should work both ways! I phoned CIS Helpline to ask about a client's missing CIS voucher: they client has sent all their emailed vouchers to me and I can't get hold of the contractor. In the past the CIS Helpline would answer these sort of queries. Not any more. They no longer have access to the info. Moving forward (or is that backwards?) only the taxpayer can request the information via the Helpline, the Helpline will forward the request to a "processing" office which will issue a written response to the client. This takes far more HMRC than the system that was in place until recently. HMRC hold all the CIS data digitally so why can't they make it available digitally? And why block the agent?

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