Benneyworth: Don't slow your MTD plans just yet

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HMRC’s 2 May announcement that it was delaying some of the elements in its Making Tax Digital (MTD) overhaul should not blind accountants to the underlying direction of movement, according to tax lecturer Rebecca Benneyworth.

All told, HMRC has just under 300 transformation projects on the go, but the tax department opted to scale back their efforts on all these fronts so it could concentrate on adapting its systems to the new trading and taxation arrangements that will come into force when the UK leaves the European Union in March next year.

While some AccountingWEB members have likened MTD to watching a car crash in slow motion and cast doubts that HMRC’s digital vision will ever come to pass, Benneyworth is pressing ahead with her own plans to go digital.

“It takes time to get things right and we should applaud HMRC for listening to representations from the ICAEW and other bodies and opting to do just that. Now MTD won’t happen until it’s ready,” she said.

May accounting excellence sponsors Intuit QuickBooksAccording to Benneyworth, the biggest challenge of MTD was not the requirement to file quarterly submissions, but getting clients to keep the digital records needed to feed HMRC’s online system. The leap will be a big one for small businesses who still use paper books, spreadsheets or merely pass all their invoices and receipts to their accountant to work up.

Looking at the time and effort needed to make that switch, Benneyworth decided like many other accountants to move all her clients onto cloud bookkeeping.

“That will allow me to reap the benefits,” she said. “When MTD comes, I will be ready because I will have access to all my clients’ records.”

One project that is proceeding as planned is MTD for VAT, which is scheduled to go live next April. As part of her preparations, Benneyworth has agreed to take part in the pre-launch pilot scheme but is still waiting for the technical infrastructure work and formal guidance to be completed.

Find out how Rebecca Benneyworth’s preparations for Making Tax Digital are proceeding in the Accounting Excellence Talk with Intuit QuickBooks and HMRC at 11am on Thursday 17 May.

https://www.accountingexcellence.co.uk/talks-sign-up/?utm_source=account...

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About John Stokdyk

AccountingWEB’s Head of Insight has been with the site since 1999 and likes to spend his time studying accountants’ technology habits. When not nerding out, you can find him exploring obscure indie music and searching for the perfect organic sourdough loaf from his base in Brighton, UK.

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11th May 2018 09:37

I disagree. I think that the biggest challenge is the whole concept of making (mandatory) business between £10k and £85K (VAT threshold) go digital and file quarterly accounts (oops sorry, updates).
If you look at it from the business point of view. Do they really want to know what their tax bill is likely to be 3 months into the year? Could this be harmful to expansion? etc. etc.
So whatever way you look at it HMRC are seeking to destroy the one man band. This is why mandatory MTD will not work and I predict that it will be at least 5 years before it's voluntary and 10 before they even consider mandatory.
As for VAT registered business with a turnover of over £85K going live next April, that will be the biggest April fool joke of the year. I predict voluntary 2020 (although there are business doing the pilot now - having to double input) and mandatory by 2025.
Sorry Mel but you're dealing with real people who do real work and are the mainstay of this country.

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11th May 2018 11:21

“It takes time to get things right and we should applaud HMRC for listening to representations from the ICAEW and other bodies and opting to do just that. Now MTD won’t happen until it’s ready,”

They haven't listened to anybody, they've merely realised that it can't be delivered in the timescale originally planned. But they should have known that in the first place.

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11th May 2018 11:52

I am not going to applaud a numpty for showing a little bit of common sense.

Any more than I would have applauded Captain Smith for hitting the iceberg at 19 knots instead of 20.

Thanks (4)
11th May 2018 13:18

'According to Benneyworth, the biggest challenge of MTD was not the requirement to file quarterly submissions, but getting clients to keep the digital records needed to feed HMRC’s online system' This is exactly what I have been saying.

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11th May 2018 13:21

'Benneyworth decided like many other accountants to move all her clients onto cloud bookkeeping' sponsored by QuickBooks!

I'm QBO accredited and have just put my first client on QBO and I'm not impressed (simple things like presentation of a logo that is not square, also lack of customer account numbers needed for online payment purposes). If this is the quality of cloud software then MTD is going to be even more of a mess than I had expected.

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By morgani
11th May 2018 14:17

I think what MTD has unearthed is two very different views. You have those who believe nothing should change and the current system works well. Then you have those who believe digital is the way forward. Whichever camp you are in is up to you.

For me MTD highlighted what I already knew but hadn't taken action on. We have always been a modern firm with a modern forward thinking approach. Taking traditional accountancy and then looking at it with a customer focused view to decide what should actually be delivered. MTD and the preparation period for this made us realise that we needed to do more. I now sit firmly in the camp of 'this will be a benefit'. I don't expect everyone to agree with me but I do know it is right for me, the majority of my existing clients and my target clients for now and the future.

We will be delivering a digital cloud based solution that is about what is happening now and looking towards the future, whilst considering the past. Achieving this on a much more regular basis than once a year (and at that often 9 or 10 months later for many).

We are now far more organised, have a better client base, have improved GRF per client and deliver far better value for money.

For those who wish to stay still delivering traditional year end accountancy services, that is fine. But it's definitely not for me.

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to morgani
11th May 2018 14:58

Good for you and your clients.

However, all these services can be provided without having to report a load of figures to HMRC every quarter which they don't have the resources to review.

Many smaller , non VAT registered clients aren't going to want any quarterly reporting service., however much we try to be positive about the benefits of keeping regular records, and frankly why should they be forced to report a load of information for no purpose?

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to morgani
11th May 2018 15:11

MTD hasn't unearthed two different views. Most Accountants move forward on a natural basis, trying out different methods. Some work, some don't.
MTD is not a natural progression is is a Mandatory Taxation Disaster (others have well apt names for it).
Being in the cloud or on planet Mars has nothing to do with the concept of digital records and quarterly reporting. Does anyone know the cost of the software?

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11th May 2018 16:12

Much as I respect Rebecca Benneyworth, as I have greatly benefited from many courses that she has run, I still think she is wrong on this.

She says “When MTD comes, I will be ready because I will have access to all my clients’ records.” That's all very well but MTD is still all based on the idea of self employed people and landlords being compelled to use digital software themselves, entering all the information and submitting their returns (sorry updates) themselves.

As far as I can see, HMRC have not moved on this and this is why, as John Jenkins says, mandatory MTD will not work.

HMRC need to recognise that they have to work with accountants and tax advisers in bringing this project in on a voluntary basis over a number of years and removing all the silly mandation nonsense.

Will they work with us? Sadly, I very much doubt it at the moment.

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11th May 2018 16:49

What a load of tripe some people write about these so-called wonderful cloud systems!

The latest one I am looking at shows aged creditors on QBO of £6,000 compared to £8 - eight pounds - in the trial balance. Utter drivel.

Neither the client or the book-keeper has a clue how this can have arisen. In fairness to the book-keeper, her key role is to make sure the bank is right, which it is compared to a £10k difference to the statements last year.

Pointing a gun at everyone's heads to force them to go digital is the stupidest thing to come out of HMRC in the last 20 years. And when you consider just how many utterly dumb things HMRC has done in that timeframe, that shows you how stupid this whole thing is.

I will be just fine, my clients will be just fine. There will be casualties over this mess, some of them in my view quite big ones. None of the wounded or dead will be on my patch, that is my sole aim.

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By Tornado
11th May 2018 18:40

Thanks for the heads up Rebecca, but the wheels in this camp have not just slowed down, but have ceased turning.

I am fed up with trying to persuade many of my clients (many with successful businesses) that they will have to stop what they are doing to spend money and time on learning how to keep their accounting records in a specific way in accounting software.

My larger clients are particularly difficult to deal with as many have bespoke accounting systems, created to make their businesses run profitably and smoothly, but are not MTD compliant. Are they really going to ditch all that investment and spend thousands of pounds more on new software, probably to be in a much worse situation afterwards.

I think they would rather pay the fines than severely disrupt their business activities just to satisfy some unrealistic crackpot idea.

Make MTD for VAT voluntary and allow a long period of time to move over, and we are taking about something more acceptable.

This is a far cry from the days when HMRC introduced special VAT schemes, mainly to reduce the book-keeping requirements of small businesses. We have now swung the other way and every one will be expected to keep meticulous records of every transaction. The obvious outcome of this is that the special schemes will become redundant as we will all be keeping records in the default format with perhaps Cash Accounting as the only alternative. No need to reduce book-keeping work any more.

HMRC need to be held account for the unreasonable violent swing away from making life easier for small businesses to making it very difficult for no acceptable reason.

My money is on a last minute 'get out of jail free' card that makes MTD for VAT to be only voluntary from April 2019 otherwise with everything else going on, the VAT revenues are going to dry up as everyone struggles to work out what they owe and how to pay it.

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11th May 2018 20:20

I think Rebecca is in cloud cuckoo land. I never hear a word of criticism of the project. HMRC put a temporary stop to MTD, not because it listened to its critics, but because the General election was called and that threw a spanner in the works. What about a mention of the cost of cloud software that traders don't need. What about the idea that the current VAT portal, with possibly just two boxes to complete (under flat rate) is perfectly effective, and the proposed system provides no more benefit. And even worse, she, and many others, only see this from the accountants point of view. What about the millions of traders who don't have accountants to help them. How will they get to grips with this MTD thing? That seems sh0cking thing to me, the idea that an app on your mobile phone will enable you to cope. I could go on, but frankly, it's just too depressing

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14th May 2018 13:39

I'm pretty sure those which are saying 'make it voluntary' actually mean 'make it so we don't have to bother'.

Which isn't very helpful.

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to andyjdicker
14th May 2018 14:07

Wrong Andy.
Firstly let me say that MTD in its present form is unworkable and not needed.
Sending in quarterly or otherwise "updates" to HMRC is a nonsense with no logical reasoning.
If HMRC are so keen to get MTD off the drawing board then there are certain business scenarios they are going to have to