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CIOT president calls for MTD ITSA delay | Accountingweb
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CIOT president calls for MTD ITSA delay

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The Chartered Institute of Taxation president says the current timetable for the Making Tax Digital programme is unrealistic. In attempting to digitise without first undertaking a full review, Rebecca Cave feels the programme has put the cart before the horse.

12th Sep 2022
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Speaking at the CIOT’s 2022 parliamentary reception at the House of Commons, Susan Ball, Chartered Institute of Taxation (CIOT) president, addressed three major concerns with the UK tax system.

Digitisation rollout

CIOT supports the digitisation of the tax system as set out in the government’s 10-year tax administration strategy. However, Ball emphasised in her speech that digitisation has to be rolled out in a way that everyone can cope with and benefit from.

Ball added: “The government should review the Making Tax Digital programme so it really does deliver better service to taxpayers, not simply more burdens.”

This is a sentiment that many AccountingWEB readers will agree with. 

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Replies (149)

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By Justin Bryant
12th Sep 2022 09:30

"Even CIOT feel the UK tax system needs simplifying."

That's a strange thing for CIoT to say. I would have thought it should be:

"Above all, CIOT feel the UK tax system needs simplifying."

Or words to that effect. A Freudian slip perhaps?

Thanks (2)
Replying to Justin Bryant:
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By Hugo Fair
12th Sep 2022 11:36

Almost as strange as "CIOT supports the digitisation of the tax system" ... without any explanation of what that means - or, as Rebecca says, any attempt to obtain quantification of ANY "various benefits" coming the way of taxpayers.

Nobody sane starts with a policy out of the blue and then seeks to justify it post-hoc ... as opposed to the natural starting with objectives from which both the policy AND the methodology evolve in tandem.

So, insanity? Or are the initial objectives now a mere forgotten mystery?

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By ireallyshouldknowthisbut
12th Sep 2022 10:39

Quarterly reporting needs more than a delay.

Its already strangled by the inherent conflict between the fantasy simplicity and messy reality, its really needs more than a little lie down in the corner, but putting out of its misery.

Digitisation is happening anyway, where its inherently better. You don't need to force it where its inherently worse.

There is a huge amount of work that needs doing on the existing systems. Just getting basic codings right for PAYE using RTI data would be a start. Ditto getting proper feeds of PAYE data into the tax return, 100% reliable and on the 6th April. Get that working and the benefits would be clear.

Its simply not the position of government to dictate bookkeeping methods. If it was, we would still be all using 1980's technology, and forced to download our lovely cloud data through some rubbish interface and rekey it all.

Thanks (24)
Replying to ireallyshouldknowthisbut:
By Nebs
12th Sep 2022 10:47

Why quarterly? Why not monthly, like most PAYE. Heck, you should update your digital records daily, so why not daily? Or, as you have to digitise each transaction, why not make a submission for every transaction as it happens. 3 months is just too long. Matron, where are my pills?

Thanks (14)
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By steve 12321
12th Sep 2022 10:46

It should be scrapped not delayed. It is not needed. It is unworkable. It will cause havoc and is a barrier to self-employment.

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Replying to steve 12321:
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By robertmmatthews
12th Sep 2022 12:08

I agree 100%.

As drafted it would catch my cleaner and widow cleaner. No disrespect to them but I can't imagine they are digitally minded and it would be an added cost to employ an accountant. What conceivable benefit would it be to them?

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Replying to robertmmatthews:
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By Winnie Wiggleroom
12th Sep 2022 12:37

robertmmatthews wrote:

I agree 100%.

As drafted it would catch my cleaner and widow cleaner. No disrespect to them but I can't imagine they are digitally minded and it would be an added cost to employ an accountant. What conceivable benefit would it be to them?

I do like the idea of a Widow Cleaner, they often let themselves go after a bereavement

Thanks (6)
Replying to robertmmatthews:
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By SimonP
12th Sep 2022 19:05

I'd have thought that widow cleaners are somewhat of a minority? Sounds very cliquey to me. How does one clean a widow anyway? A rub down with the Sporting Life, perhaps? Maybe a brush down with an old scrubber?

Thanks (2)
Replying to robertmmatthews:
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By Rgab1947
13th Sep 2022 09:22

If an accountant would be prepared to do the work. Doubt their admin, if it exists, would lend itself to an accountant being able to give a fee they could support.

I for one will not touch a sole trader or unincorporated landlord.

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Replying to Rgab1947:
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By Paul Crowley
13th Sep 2022 11:00

There we go
As you and many other traders are not going to be impacted by MTD it is not difficult for some people to consider the matter really is a problem for others.
I agree your comment
Only short cutting the system is a viable option for those that have over 100 clients impacted.

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Replying to steve 12321:
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By Elizabeth Rubidge
13th Sep 2022 11:06

Totally agree...

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By johnjenkins
12th Sep 2022 10:43

Laugh, I nearly paid my dues.
This is pathetic. EVERYONE IN THE ACCOUNTANCY PROFESSION KNOWS THAT MTD IS NOT A BENEFIT TO ANYONE. As for QU - there is no justification for this ludicrous piece of rubbish.

Thanks (24)
Replying to johnjenkins:
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By Paul Crowley
12th Sep 2022 11:42

WE all know, cos we have to plan to deal with it
HMRC and THE POLITICIANS have absolutely no clue, they believe software is magic and needs no planning.

Thanks (7)
Replying to Paul Crowley:
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By Red1960
12th Sep 2022 12:16

You forget to mention the software developers who stand to make a fortune from this shambles.

Thanks (6)
Replying to Red1960:
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By Paul Crowley
12th Sep 2022 12:36

There exactly is the issue
HMRC have bamboozled themselves into thinking human free operation of the tax system can work and that the taxpayers should be paying for it

Thanks (5)
Replying to Paul Crowley:
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By Rgab1947
13th Sep 2022 09:23

Too much Harry Potter movies watching.

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By GHarr497688
12th Sep 2022 10:45

This is disgusting to read. Since 2015 I feel I am living in hell. Infact it's affected my health and finances. I have now arranged to off load my clients on the basis that MTD ITSA is wrong at many levels. I know full well that many taxpayers are not capable of keeping digital records and for me to keep them would cost too much , also the admin burden for a small business is totally unfair. Now to read that the rollout is coming in 2023 and 2024 then to see a delay is being requested is too much. HMRC have mandated this now and so it MUST go ahead , HMRC have had from 2015 (9 years) to progress this project and to put innocent people through this trauma and then keep delaying is wrong. They either go ahead and cause mass disruption to the tax system or scrap the project. It really is that simple.

Thanks (23)
Replying to GHarr497688:
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By steve 12321
12th Sep 2022 10:53

Spot on - it is disgusting. We need common sense to prevail here asap. Taxpayers having to foot the bill for this is appalling but it is no-one else's money being wasted.

Thanks (15)
Replying to steve 12321:
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By bendybod
12th Sep 2022 11:02

I've lost track, amongst the very small percentage of my clients with whom I've bothered to discuss it yet (pending inevitable changes yet), of the number of clients who have said "well that will be the time to give up".

Thanks (11)
Replying to GHarr497688:
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By Paul Crowley
12th Sep 2022 11:45

Do not offload yet
It is inevitably going to be kicked down the road

Thanks (5)
By jon_griffey
12th Sep 2022 10:55

Delay? Why do our professional bodies insist on pussyfooting around? They should be calling for the whole project to be scrapped. We don't just want 'delay'

Thanks (46)
Replying to jon_griffey:
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By Southwestbeancounter
12th Sep 2022 11:39

Spot on Jon! No other option makes any sense whatsoever!

The digitalisation from our end should be where we, as agents, can have access to much more accurate and timely information in respect of our clients and can, for instance, correct notices of coding online etc - i.e. useful stuff!

If they want 10x monthly or quarterly tax payments then fine but that can be totally separate from MTD.

Thanks (15)
Replying to jon_griffey:
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By Jo Nokes
12th Sep 2022 11:56

We'll be waiting a long time before ICAEW calls for its postponement, or (better) its abandonment. I'm appalled at the lack of punch from the PBs. It's taken too long for the CIOT to make this statement, but better late than never

Thanks (18)
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By CLKBooks
12th Sep 2022 11:03

I'd also add they need to resovle the Single head of service issue before rollout. Currently you can only have one tax agent for self assessment, meaning it is not possible for the bookkeeper to submit the quarterly updates and the accountant to submit the EOPS.
EDIT: Adding that HMRC are aware but cannot resolve this until April 2025

Thanks (9)
Replying to CLKBooks:
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By bendybod
12th Sep 2022 11:04

That absolutely is ridiculous. It is bad enough in bookkeeping software where you can't have two "accountant accesses" without trying to comply with HMRC's madness with only one agent access.

Thanks (6)
Replying to bendybod:
By Nebs
12th Sep 2022 15:40

The equivalent would be one named tax inspector responsible for a taxpayers affairs, and nobody else in HMRC is allowed to do anything on that file.

Thanks (2)
Replying to Nebs:
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By spilly
12th Sep 2022 23:06

That actually might be a better way of doing things. At least we’d know who to address complaints to - or maybe even plaudits if they manage to sort out some of the horrendous issues and delays currently being experienced.

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By petestar1969
12th Sep 2022 11:00

Hmm, this reminds me of the 90's when there was push in our office to get clients to use SAGE instead of paper records.

The golden rule was if the client didn't know how to keep manual records properly, then don't put them on SAGE because they'll mess it up.

Now we have HMRC and HMG trying to force people who can't keep proper records on any system to start reporting digitally. I wonder what will happen? Will they make a mess or by some sort of miracle get it right?

Answers on a post card, please.

Thanks (17)
Replying to petestar1969:
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By bendybod
12th Sep 2022 11:04

They'll retire.

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Replying to bendybod:
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By spilly
12th Sep 2022 13:31

They’ll ‘retire’ and then work in the black economy where possible.

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Replying to spilly:
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By Hugo Fair
12th Sep 2022 14:13

Which includes so much more than just 'cash in hand' ... barter is making a major comeback.

If I accepted all the offers I've had ... my house would be clean, my garden tidy, my windows clean, my car serviced, my hair beautifully coiffed, and my belly full of home cooking - and that's just the printable ones!

Get behind me Satan (or HMRC as they prefer to be known).

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Replying to petestar1969:
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By GHarr497688
12th Sep 2022 11:09

so why don't HMRC want to listen. Everyone is saying the same thing and yet HMRC are blind. I've started to tell clients and they just don't know what to say. I just say you need to digitalise your books , file six times a year and you get a tax quote each quarter that might be wrong. The clients on average say "oh, I don't know what to do" I say well neither do I and then say HMRC offer lot's of help and support. The Accountants say MTD won't work. The IT companies are noncommittal and HMRC say it's the best thing thats ever happened to Tax. Most clients have never even heard of it ! Need I say more.

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Replying to GHarr497688:
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By petestar1969
12th Sep 2022 11:42

HMRC never listen, they like to tell people what to do like those bosses we've all had who can never see they're wrong......

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Replying to petestar1969:
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By codling
12th Sep 2022 13:57

Quite by chance this morning I was reading Rebecca's article whilst a pest controller was sorting out a nest of very angry wasps that have been attacking and stinging at every opportunity. When he had finished he came into the office in his anti sting suit to give us his hand written invoice. He realised we were accountants and asked about MTD4ITSA. He is the first of the general public that we have spoken to that was aware of its existence but he had no idea of what it meant for him. When it was explained what this would entail (he has more than one income stream) he went ashen and explained that he kept a meticulous book with everything entered and referenced and his accountant had been very pleased with these records over the years so why would he have to change? The answer "Because HMRC says so, that's why!!" Probably in his forties and certainly quite bright and articulate but now a worried man.

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By Nick Freeman
12th Sep 2022 11:05

I fully agree that simplification should be dealt with before any attempts to compel small businesses and landlords to digitalise tax practices and record keeping, starting with the change of tax year end date. Is the UK the only country in the world to adopt a non end month date?

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By Ammie
12th Sep 2022 11:11

Cut the middle man out and accelerate the payments on account, after all isn't that what this is all about? Both HMRC and the taxpayer will save fortunes on implementation and maintaining of the system, a huge part of which falls on micro businesses who are already under enough pressure.

However, that will mean less scope for revenue through penalties.

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Replying to Ammie:
By ireallyshouldknowthisbut
12th Sep 2022 12:10

All they need to do is pay interest at a sensible rate, and you would find a massive acceleration in payments.

Its really flipping simple, if I have cash in my bank account earning zero, or cash in HMRC earning 0.75%, where is going to sit? I will pay them in full for 2022 now, and some for 2023 too, and get a pub lunch on HMRC. HMRC would get billions.

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By Mike Brown
12th Sep 2022 11:15

It doesn't matter how many times the profession shouts delay or cancel, it will not happen.

Too much "group think" going on at HMRC for any external noise to make a blind bit of difference.

I have clients blaming me on a daily basis for HMRC's incompetence. This will only get worse in the years to come.

It's just a case of taking it on the chin, grinning and bearing with it or getting out of the profession.

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Replying to Mike Brown:
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By Southwestbeancounter
12th Sep 2022 11:45

Yes, but why should there just be binary options i.e. either grin and bear it or retire?!

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By adjadj
12th Sep 2022 11:21

Pilot user testing in the 2022/23 testing with not encounter the end of year scenarios until after 31 March 2023, many will not be doing end of year until after June 2023, some as late as January 2024. The pilot test results will inform the decision as to whether MTD should go live; a decsion that will need to be taken before Christmas 2023.

It appears the the number of people in the pilot test is less than 100 and none of them will testing the complexity of joint property income which affects 500,000 taxpayers.

We also learn that non business income will be supplied to the HMRC via its Update and Submit a Tax return Service. Nobody knows anything about this at this stage – is seems unlikely that its complexities (e.g CGT) can be tested within the 2022-23 pilot.

These three factors mean that going live from April 2024 with several million people carries enormous risk including the inability to collect legitimate tax revenues for 2024/25.

An widespread review is need as a matter of urgency. The review may conclude that MTD ITSA should be scrapped.

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Ray McCann
By Ray McCann
12th Sep 2022 11:30

It’s good that the new CIOT President has added her voice to those criticising MTD and service standards. Those below calling for it to be scrapped need to get a grip. The whole direction of travel is digital, paper is dead, it may take ten or fifteen years but as some point if you are not digital you will not be able to be in business in any meaningful way.

The problems with MTD include a lack of proper investment by the Government in terms of money and resources, and bonkers expectations on the part of HMRC as to its benefits above all the idea that somehow self employed individuals keeping digital records will be more compliant than is the case now and the extent to which those outside HMRC would support it. Threatening even more penalties has achieved nothing.

And some criticism needs to be directed at the self employed, throughout my career I have met hundreds of them with very many looking to have their books done on the cheap. They have, and have always had, a privileged tax position and if maintaining that means employing a quality accountant then that’s what they should do.

And if that’s not enough, I recall one who literally destroyed his entire life and that of his family because he thought £600 to bring his books up to date was too much so he went to an unqualified “accountant” who just put down what he said. And many in HMRC see this time and time again. Indeed the comments in this journal are often full of similar criticism of cheap skate non compliant clients.

Thanks (2)
Replying to RayM55:
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By Paul Crowley
12th Sep 2022 11:59

'Meaningful way'
Hogwash: gardeners and handymen, mobile mechanics and numerous other traders work with cash as a norm
I will accept that you consider such people trivial, but they are not to me.
Why should they need to buy software and pay double size fees just to keep the vision of utopian RTI tax systems going
Simple answer of course is to limit it only to those who trade above the VAT limit

The properly functioning system is going nowhere because there will still be people that need to submit tax returns that are and always will be outside of the MTD strangle hold

Thanks (14)
Replying to Paul Crowley:
Ray McCann
By Ray McCann
12th Sep 2022 13:38

You should not accept that I regard such people as trivial, that says more about you then me. There will always be a place for very small business and MTD is likely to be more of a burden than anything else to them. But there are thousands of sizeable business that are still overly reliant upon paper and to repeat in the years to come paper will be dead.

Equally I would bet that for very many businesses the only digitalisation they are resisting is in relation to tax and in many other aspects of their life they have got with the programme.

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Replying to RayM55:
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By Paul Crowley
12th Sep 2022 14:50

Standard question
What is the benefit to the tiny taxpayer of MTD?
If his records are adequate such that the tax is correct then there is zero benefit to either the taxpayer or HMRC. both are wasting resources.
What is the point of cash based three line quarterly returns that HMRC claim will not be used or read, but must be electronically corrected is an error is discovered, for a person that does not even pay any tax at all?
HMRC are unable to give answers to just about every technical question asked and refuse to reply on the supposed benefits
The non taxpayer does not even get effective tax relief on all his new costs
You are defending a Leviathan that has no purpose for traders below the VAT registration limit.
The only certainty is that VAT payments will increase substantially because so many non registered people will be paying for pointless software and needless extra bookkeeping

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Replying to RayM55:
By ireallyshouldknowthisbut
12th Sep 2022 12:16

@Ray, but tax returns are already digital.

How tax payers get their records together ought not be a matter for government.

Most of our records are digitally prepared, where appropriate.

Where they are not there is good reason for that, and quite frankly not of HMRC's concern. By the time HMRC get the figures, its all laid out and presented for them if they want to see it. Which they never do as all the tax inspectors got sacked.

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Replying to ireallyshouldknowthisbut:
Ray McCann
By Ray McCann
12th Sep 2022 13:40

How they get their records together is absolutely a matter for Government since what goes in that tax return is is very many instances totally dependant upon those records.

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Replying to RayM55:
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By Paul Crowley
12th Sep 2022 14:57

Complete twaddle
If the tax paid is correct, who has the right to say that " well, yes it is right, but you did it the wrong way. WE, your masters demand that you pay more money to get it right our way, not your way. We are right, you are wrong, even if you are paying the correct tax"

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Replying to RayM55:
By ireallyshouldknowthisbut
12th Sep 2022 15:05

RayM55 wrote:

How they get their records together is absolutely a matter for Government since what goes in that tax return is is very many instances totally dependant upon those records.

HMRC have proven to themselves during the failed "business records check" that business records are actually not too bad. HMRC wasted millions on that before abandoning the project. And those tests were often "before accountants had sorted it out properly"

By what mechanism do digital accounts, and more specifically quarterly filing make records better?

For example, for a landlord with a single let property who currently gets one bit of paper from their lettings agent, a mortgage statement, and a couple of invoices for insurance together annually? How is digitisation going to help?

You should assume they are already running a query on their online banking to check the net payments into their bank agree with the letting agent income, or at least their accountant is making them do this annually.

I would genuinely like to know how quarterly accounts are going to help this client. I cant see any benefit myself, but 5 times the work for my client, and for us.

Thanks (9)
Replying to RayM55:
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By steve 12321
12th Sep 2022 21:08

Sorry but there is no need for quarterly reporting. Annual reporting on a self-assessment basis works fine. So no "need to get a grip". It's more admin / "red tape", if you like. Digitalise if you are able to, which will be most people, but no need to introduce more work / costs if it is not needed. It is hard enough for people as it is. The real word is tough. Dealing with tax is tough, that's why, with accountants help, we get it right each year as best as we can. Sure not everyone is honest but I am sure most people try to get it right. All the extra reporting is taking away from working or creating more work. I just cannot get behind it.

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Replying to RayM55:
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By steve 12321
12th Sep 2022 21:09

deleted

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