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Obviously, people will all have their own take on Neil's suggestions and will indeed have their own suggestions as well. And that's part of the problem: "policy makers" at HMG could never be accused of hard thinking, so all they usually want are easy answers. The Revenue will present a coherent package (usually complete bollox, mind, but at least it's a whole) whereas everybody else dribbles in with suggestions all over the place. It's hardly surprising the Revenue always seem to get their way.
And all that said (!), here's my own counter suggestions to what Neil has proposed:
MTD: completely agree that it needs to be voluntary for smaller businesses; personally I would suggest a threshold here of £1m as that is where businesses "get serious" and either have an in-house accountant / bookkeeper or can pay more for their external adviser.
Registration threshold: I too can't see this being halved. That said, it's always seemed to me that the threshold is set too high and personally wouldn't be averse to the idea of reducing it by say £5k or £10k pa until we arrive at a sensible limit (£50k anyone?).
Default surcharge: I'm not sure, personally, I would distinguish here between small and non-small businesses, the regime should apply across the board. If there is a need to distinguish, again I would use the £1m threshold per point 1 and for the same reasons.
FRS: just abolish the f***er! I get that it's simpler but, come on, neither the standard nor cash schemes are exactly rocket science. Plus the FRS really isn't going to sit well with MTD once that gets into full swing and we have to submit the underlying transactions.
"None of my suggestions are very radical"
Perhaps not radical but perfectly sensible.
The problem is that the Government do not think 'sensible'.
I totally agree with your suggestions Neil. Making MTD voluntary below a limit of £250K (or higher) makes so much sense. I deal with lots of small businesses similar to the ones in Blackpool. I know Blackpool well. In fact I was there today. I sometimes think HMRC are living in cloud cuckoo land to think that small businesses can somehow submit digital figures in just over 5 months time when the vast majority know nothing about it right now
What is the point in making something voluntary, that just means that no one in their right mind will volunteer, a much better suggestion would be to offer all small VAT reg businesses an incentive to get into the digital age.
I also find it very hard to believe that there are that many people in business not using computers, I mean come on, yes of course there will be a few traders who still do the books the old way and I am sure they think they are very efficient and accurate but to be perfectly honest one of the biggest issues we have found when we move clients from old systems onto more efficient book-keeping systems is that they start paying more VAT and tax, because yes, here is a shock, the books are now more accurate and more relevant!
"What is the point in making something voluntary, that just means that no one in their right mind will volunteer"
An interesting view.
In practice, people will fall over themselves to volunteer for anything that is worthwhile and will achieve positive results.
Your view that no one in their right minds would volunteer for registering for MTD for VAT just about sums up the feeling that many people have about this project - not worthwhile and not going to achieve positive results.
Offering an incentive is not such a bad idea, but that would still be a voluntary decision.
Holding guns to our heads and telling us that we MUST operate MTD for VAT or face dire consequences is the other end of the spectrum to volunteering, and is totally unacceptable.
I don't get why the article only talks about Blackpool or suggests that Blackpool should be at the back of the mind of the Chancellor.
The view that ‘Leave’ vote in Blackpool was because the people of the town felt left behind with the advances of the global economy is more reason why Blackpool should not be on the chancellor's mind. BTW I don't believe this to be the reason for leave vote, there were many other factors that led to this vote.
I personally think no matter what measures are in place, people resist change. I understand there are still hiccups in MTD but the move was bound to happen sooner or later. The way the world is moving, people have to adapt to technology if they are to prosper in today's world.
The £250k threshold suggested above would just defeat the whole purpose of MTD VAT.