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Delay MTD ITSA to preserve integrity of tax system

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Leading tax and accountancy bodies called on HM Treasury to delay the mandation of MTD ITSA, and the switch to the tax year basis, both of which are due to take effect on 6 April 2023.  

20th Aug 2021
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Five professional accountancy and tax bodies (ICAEW, CIOT, ATT, ICAS and LITRG) have written to Jess Norman MP, financial secretary to the Treasury, asking the government to reconsider the timetable for the change in basis periods to the tax year basis, and the mandation of MTD ITSA, both of which are due to come into effect in April 2023.

The public letter is not just accountants whinging that they won’t have enough time to educate clients about the changes (although this is true), the professional bodies are concerned that the current timetable will put the integrity of the tax system at risk.

The areas of strain on the tax system and the accountancy profession outlined in the letter from the professional bodies include:

MTD for VAT

Although 1.3m businesses were required to start submitting their VAT returns using MTD software from April 2019 (some were deferred to October 2019), only 1.16m are currently signed up to MTD for VAT.

It is a credit to the accountancy profession that this transition has gone so smoothly, HMRC research on the impact of MTD for VAT has shown that 754,000 businesses took advice from their accountant about MTD. Also, 41% of self-employed individuals have increased their use of tax agents since the introduction of MTD.  

The HMRC helpline was put under considerable strain by the introduction of MTD for VAT with average waiting time for a call to be answered doubling from 5 mins 21 secs in March 2019 to 10 mins 48 secs in May 2019. 

Around 750,000 businesses that registered for VAT on a voluntary basis will be required to enter the MTD for VAT regime from April 2022. Some 350,000 businesses that are voluntarily registered are already submitting VAT returns under MTD.

Further pressure will be put on the remaining 140,000 businesses that were mandated to join in 2019, but have not done so. This means that nearly 580,000 businesses will require advice from accountants on MTD for VAT before April 2022.

New penalties for VAT

April 2022 will see the introduction of a completely new penalty system for late filing and late payment of VAT. This will affect 2.5m businesses, but there has been very little HMRC education about this change. 

The new penalties will be based on the number of points a business gathers for non-submission of returns, but each tax will have its own system of points. The business (or tax agent) will have to keep track of multiple points racking up for different tax returns.

Tax year basis

The tax year 2022/23 is the proposed transition year to the switch to the tax year basis from April 2023. As I highlighted in July this change in basis periods will mean that one-third of partnerships and 7% of sole traders will be assessed on more than 12 months of profit in 2022/23, increasing their tax bills unexpectedly when many businesses are struggling to recover from the pandemic.

In total, around 360,000 businesses will be affected by the transition to the tax year basis, all of which will need detailed advice from their accountants.  

In addition, where more than 12 months of income is assessed in 2022/23 this will have a knock-on effect for income-related charges and deductions, so special rules will have to be written to provide adjustments in all these areas:

  • student loan repayments
  • national insurance contributions
  • high-income child benefit charge
  • capital allowances
  • pension allowances
  • relief for losses
  • cash basis limits
  • averaging of profits for farmers and creative artists
  • working and child tax credits
  • tax payments on account.

Is there time to write new rules for all of these areas before the beginning of the transition year on 6 April 2022?

MTD ITSA mandation

As I revealed early this month the change in basis periods will mean a big bang start to MTD ITSA on 6 April 2023, when around 4.3m individuals and businesses will be required to start filing quarterly MTD submissions and to keep digital records. Of these businesses it is expected that 2.8m will require advice from accountants before they start submitting under MTD ITSA.

There has been a very limited MTD ITSA pilot running, which was supposed to be expanded by now to cover the “vast majority of sole traders and landlords”. However, as of August 2021 all of the following are still excluded from the MTD ITSA pilot:

  • partnerships
  • individuals with more than one trade/ profession 
  • UK landlords letting property overseas
  • non-resident landlords letting UK property
  • anyone who has taxable income from sources other than their trade/profession.

There are currently only seven providers of software suitable for use in the MTD ITSA pilot.

New penalties for ITSA

The same “points means penalties” system that comes into effect for VAT from April 2022 will apply to submissions filed under MTD ITSA from April 2023.

HMRC confirmed there will be no soft landing for this new penalty system although it will be completely novel for taxpayers and accountants to get to grips with. 

What will happen?

There is no guarantee that Treasury ministers will listen to these sensible objections by the professional accountancy and tax bodies, but if they don’t, a period of chaos and disorder in the tax system will certainly be the result.     

Replies (117)

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By snickersinatwix
23rd Aug 2021 10:27

In the old days, HMRC treated agents with respect (I also remember going to sessions at HMRC offices to learn about self assessment, and also being able to speak with specific people about specific clients etc etc). Now they just seem to treat us with utter contempt. I am not sure what happened. Their pathetic emails headed "HMRC Help and Support" don't wash it when you can't speak to a real person on the phone.

True, there have been some rogue agents out there who need to be shut down, but let's not assume we are all that way please. I do my best to ensure my clients pay the correct amount of tax at the correct time, and have lost clients who do not like the fact that I won't let them bend the rules. Yes some of my clients probably could do their own accounts etc but they refer not to. would they be correct if they did? Sometimes? Yes of course we charge a fee, but I do believe that we are helping to uphold the integrity of the tax system.

Our current system works very well for us now. Clients send in their rental statements once a year and we prepare the accounts and tax return. Can we do this 4 times a year for them within one month of the end of the quarter (which will be the same quarter for everyone)? Absolutely not.

I realised with horror not so long ago that we have over 200 clients with rental income. I think you could count the number that keep records electronically on one hand. And why should they? Why do they need to pay for software to record money coming in from a letting agent once a month? They don't have a business bank account to link into the likes of quickbooks or xero who will charge through the nose for this in any case. There is no double entry bookkeeping going on for most of them. I would like HMRC to tell me exactly WHO is going to be saving money with this fantastic new system, and exactly WHO is going to benefit, because I cannot see it.

Will it save our clients money? 100% absolutely not. It will cost them much more.

Will it prevent errors? Again, absolutely 100% not as the clients will try to do it themselves in the new system because we won't be able to cope (retirement never looked so promising).

In recent years, HMRC et al have forced more and more onto our clients and therefore us - RTI, auto enrolment, GDPR, MTD for VAT, IR35 to name a few, Don't get me started on furlough although I accept that that was unexpected and exceptional. The big boys and the software providers all think it is fantastic. they are rubbing their hands with glee. I don't think most taxpayers are aware of what is about to hit because no one has checked with them.

Meanwhile HMRC are taking months and months to simply open the post let alone process it, and don't even try to call them.

THIS HAS GOT TO STOP!!!!

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By johnjenkins
23rd Aug 2021 10:35

I'll keep it simple. "Preserving the integrity of the tax system" PML.

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By Bdwmacc
23rd Aug 2021 10:54

I find this a ridiculous situation. Some of us accountants have spent months converting clients to new ways of thinking over the new MTD and invested money in new systems - and now the ‘big boys’ decide they haven’t got the time to get people ready. And we’re the ones who’ll look stupid when our clients will accuse us of scare mongering and profiting from the change.

Let’s just get on with it. But we won’t, because the big companies put their profit above their clients needs.

Ridiculous!

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Replying to Bdwmacc:
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By johnjenkins
23rd Aug 2021 11:16

I can totally agree with you and totally disagree with you. there are many business and Accountants all geared up, ready to go. There are also just as many who aren't up to speed and some never will be. This is the technological difference between "high Techies" and "low techies". Until this problem is resolved, and only time taken for many to play catch up will do the job, things will remain static.

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Replying to Bdwmacc:
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By GHarr497688
23rd Aug 2021 13:11

You should sit with me and my clients of 55 plus and then resubmit your review.
I was one of the first Accountants to use computers back in the late 70"s and also was involved with Self Assessment - one of the first to use SAGE and also use Xero.
I know what I am talking about and this idea of ALL using computers is totally unfair and a real burden for older clients or those not tech savvy. I hope you can see my point. One size does not fit all.

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By spilly
24th Aug 2021 13:35

I’m starting to think that I have almost reached the limits of my ability to learn new software, let alone negotiate my way through the hoops that HMRC make us go through every time they introduce something new. MTD VAT was bad enough!

Some of my subbie clients can barely read, let alone work a computer. And not all in the older age bracket either. I suspect they will just disappear into the black economy rather than pay me to make multiple submissions for them.

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Replying to spilly:
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By DJKL
24th Aug 2021 15:05

Know how you feel, I am slowly learning to use Key Prime from Landmark (Property /estate/agriculture/accounts), slowly is the operative word, I at least understand where the debits and credits ought to land and can correct any errors (eventually), a layperson not really understanding debits and credits imho would make a right hash.

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Replying to Bdwmacc:
By ireallyshouldknowthisbut
23rd Aug 2021 15:37

Bdwmacc wrote:

I find this a ridiculous situation. Some of us accountants have spent months converting clients to new ways of thinking over the new MTD and invested money in new systems - and now the ‘big boys’ decide they haven’t got the time to get people ready. And we’re the ones who’ll look stupid when our clients will accuse us of scare mongering and profiting from the change.

Let’s just get on with it. But we won’t, because the big companies put their profit above their clients needs.

Ridiculous!

@BDW, quite which is why we have not been pushing clients into doing this stuff when its far from certain it will happen, or at what level. I can see the £10k threshold going to £30-45k which will mean a huge chunk of mine are taken out. Equally I can see only VAT reg busineses going in on the first wave.

Far too many unknowns at this stage. The original timetable for this was what April 2017? Thats years and years of extra compliance costs if you went for it back then.

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Replying to Bdwmacc:
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By Jimess
24th Aug 2021 17:34

I disagree with your sentiments - many small practices have clients that just cannot cope with technology for one reason or another, and some simply do not want to. I have used technology in accountancy since it's very early days - in the late 70's the firm I worked for introduced computerised accounting - granted there was only 1 computer for the whole firm, but we had to work with it. Then along came Sage, Opera and a whole tribe of bookkeeping software that we all had to become familiar with to enable us to help clients. For the firm I later worked for the early 1980's brought Auditman and then along came the various brands of accounting practice software. Many accountants, who have gone through the developments of accounting software over the years are not averse to technology, but they have the experience and awareness to see the pitfalls of pushing clients into using accounting software when for many years they have had to substantially correct their record keeping and put their accounts in order before they are submitted to HMRC, clients who have little or no formal bookkeeping or IT knowledge, and are too busy, too disinterested or just do not have the capabilities to embrace digitisation of their record keeping. People should have the freedom to make the choice of how they operate their businesses, to be able to develop and accounting system that works for their business or circumstances - it is entirely wrong that they are being forced down a particular road because someone, somewhere, says that everybody must do this and they think that everybody has digital access and the capabilities to use it. We are dealing with human beings, not robots.

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By DMBAcc
23rd Aug 2021 11:10

HMRC, if this new world is so lovely than sell it like a salesman and make it voluntary to your “customers”. Customers!!! Has anyone had anything supplied to them by HMRC? They obviously do not understand the basic English language.

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By execprac
23rd Aug 2021 11:21

Rebecca please speak to HMRC again! ... and get the MTD ITSA Threshold increased to a sensible level ... at least the VAT Threshhold ... and then lets have some real consultation.

This is absolutely pointless administration and burden on small businesses (or their Accountants) with no return for HMRC or benefit for the tax payer. Accountants will not be able to charge for the unnecessary work that will end up on their desk (computer) and standards will drop as a result.

Accounting for paperclips was never worthwhile

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By tedbuck
23rd Aug 2021 11:21

Well, well - fancy the accountancy bodies doing something - will wonders never cease? I'll bet it was nice and friendly and chummy, pretty please etc.

I think, as suggested in the last article on this that the answer is to get the media on to the case, plus Nigel of course.

Until the person in the street is made aware of what needs to be done by them and the extra costs attaching to it all the noise which we make will be unnoticed. If the Politicians see their jobs in jeopardy and the Gravy train disappearing they might, just might, open their eyes to reality for once in a while. But if they can let a disaster like Afghanistan happen without actually giving it a thought then, frankly there isn't a lot of chance.

There must be an answer somewhere but I certainly cannot see it. Perhaps we should re-incarnate Guy Fawkes and point him to the relevant Postcode office. I mean what a way to provide a service? write to your friendly postcode or telephone your friendly computer. (Answer the same - none.)

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Replying to tedbuck:
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By spilly
24th Aug 2021 13:40

These supine accounting bodies may well find themselves short of members soon with the number of accountants proposing to take early retirement over this.

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By Homeworker
23rd Aug 2021 11:24

I have given up hope of any delay to this being introduced and will be retiring. I understand that the professional bodies are not able to challenge policy, only the consequences, so there is little they can do to stop this. However, I really cannot see why they cannot phase it in, instead of having everyone in from day 1. The turnover threshold has been set ridiculously low at £10k - I have clients with unemployed spouses who share property income but have nothing else, so would not even be liable to tax at this level!
All of the VAT registered taxpayers (sorry, "customers") should be able to cope with joining from April 2023 but a 12 month delay to give everyone else a chance to see how it works would really help. There are many unrepresented taxpayers out there who still don't know anything about this, as there has been so little publicity about it.
..and as for only 3 line accounts being needed, I doubt that any accountant would file these without preparing more detailed accounts first, otherwise how can the client possibly check and confirm the figures are correct.

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By execprac
23rd Aug 2021 11:39

All my clients are MTD ITSA and have compatible software ready but there is no sense in the £10k threshold and there is no benefit to them in reporting meaningless quarterly figures (that will require more analysis and communication to explain the differences!).

This is HMRC trying to fix a problem that doesn't exist for small businesses (and this will not "trap" one errant tax payer much less an evader!) and places an unnecessary admin burden/cost on everyone! The present system is not broken although it is still in great need of simplification, which is where the focus should be!

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Replying to execprac:
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By johnjenkins
23rd Aug 2021 11:48

No doubt the OTS will become the OfMTDS with the same effect.

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By Nick Graves
23rd Aug 2021 11:47

There are too many tax (or ex-) inspectors posting perfectly salient comments on here to believe that everyone within HMRC is utterly imbecilic.

I am becoming increasingly suspicious that MFTFD is being deliberately designed to fail.

What better way to close down all the small businesses than to penalise them into insolvency for failing to file correctly?

The small entrepreneur will own nothing and be happy...

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By Nebs
23rd Aug 2021 11:47

Has anyone asked the unrepresented taxpayers what they think of it? I've spoken to a couple, neither knew anything about it. And how many are there, many of whom will be knocking on accountants doors all at the same time - 2 weeks before the first submission is due.

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By Mr J Andrews
23rd Aug 2021 11:51

Not too late have bodies with clout come up with this public letter.
Did they not read the HMRC propaganda at the outset - spelling out how marvellous it would be for small businesses to spend so much extra time on useless administration instigated by an Osborne whim. Or did they not see the anticipated grief, worry and pain facing the nation's OAPs relying on their renal income as their pension ?
Sadly under the incumbency of HMRC's James Harra , we don't ''WORK TOGETHER'' any more . God knows why he's been allowed to reduce the Revenue's standards to a third world service , alienate the accountancy profession and Joe Public alike and not face up to the reality of MTD's gross shortcomings.
Rebecca , forget so called public letters- sit Harra , Jess Norman , Rishi Sunak around the table with you and a few other members of these professional bodies for 10 minutes and I guarantee some sense would be knocked into their ####less brains.
But that would be too easy.

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By mydoghasfleas
23rd Aug 2021 12:15

I hope Jess Norman does not write to HMRC about this. The letter will be sidelined for 4 months, then forwarded to the wrong person, who will send out a holding letter, saying it has been passed on to someone else. I too remember the gearing up to SA and current year basis but that was when there were local tax offices and the local Inspectors.

Having been on both sides, I can honestly say there were good relationships because the tax agents and the Inspectors wanted to maintain credibility with each other. Local Inspectors had a better idea of what was going on in their district and the standards of work submitted. Equally, the local accountants knew who they were dealing with. I do not advocate a return to those days, there was plenty wrong but at least opinions were respected and passed on. These days hearing that there will be a consultation is taken as meaning, "it's been decided, now for a bit of lip service."

Has anyone met Al Gore-Rhythm because he has a lot to answer for?

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By raju m
23rd Aug 2021 12:41

MTD is a load of B????????????????

All businesses should close down and everyone should start claiming state benefits.

The bank of England can borrow and print money .

Everyone can relax and enjoy life.

Goodbye MTD.

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By lh3f9764bg1g
23rd Aug 2021 13:52

If I remember correctly there was an extensive, early and prolonged advertising campaign aimed at the self-employed before the introduction of Self-Assessment - when, do you think, HMRC are going to start the advertising for MTD ITSA? I mean they are going to have such a campaign, aren't they? Surely?

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Replying to lh3f9764bg1g:
By Nebs
23rd Aug 2021 19:16

lh3f9764bg1g wrote:

If I remember correctly there was an extensive, early and prolonged advertising campaign aimed at the self-employed before the introduction of Self-Assessment - when, do you think, HMRC are going to start the advertising for MTD ITSA? I mean they are going to have such a campaign, aren't they? Surely?


I remember it. It was originally going to be called Simplified Assessment, HMRC had loads of advertising stuff made up that had SA in big letters everywhere, then people said it wasn't being simplified, so they changed it to Self Assessment so as they could still use the advertising. True or not, I don't know, but I heard it from a few Tax Inspectors
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Replying to Nebs:
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By johnjenkins
24th Aug 2021 09:10

Very true. I was there, like many other posters on this site, at the very beginning. Even though there was a bit of opposition HMRC consulted us at every stage of the process and took our views on board. The concept was right (everything on one return per annum) that is why it worked. The only thing I and many others didn't like was the dates of payments. most of us went for 31st March and 30th September.
Again the concept of MTD is right for the future but where in the hell does quarterly returns for non vat business come in?????????????????? If you want to go down that road you have to make every business register for vat and no money changes hands between registered business. Of course HMRC won't do that because they would lose loads a dosh.

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Replying to Nebs:
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By DJKL
24th Aug 2021 15:07

Was that Hector?

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Replying to DJKL:
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By Jimess
25th Aug 2021 13:50

That's it! Hector the Inspector in his bowler hat and pin stripe trousers! I could bring the picture of him to mind but not the name.

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Tornado
By Tornado
23rd Aug 2021 14:21

THIS IS NOT OUR RESPONSIBILITY

Ultimately, it is the responsibility of HMRC to ensure that those affected by taxation know what they are required to do and also the responsibility of HMRC to ensure compliance.

It is NOT our responsibility to take on this task and we certainly have no responsibility to make the impossible work.

If HMRC want us to assist them with their responsibilities then they need to properly liaise with us and give us some incentive to help them, they cannot just assume that we will just do it. They need to ensure that they have helplines available to assist millions of people at the same time all asking the same questions and many probably saying that they cannot do what they are required to do and could HMRC help them as they have asked numerous Accountants to help them and none have the time nor inclination to assist.

The responsibility of MTD lies solely with HMRC and it is they that need to be really sure that they are capable of dealing with this, not us.

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Replying to Tornado:
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By tedbuck
23rd Aug 2021 14:44

I completely agree but can you see them stepping up to it?
They haven't the staff that could even understand the problem nor does the Great Man presumably care two hoots about Joe Public when he can pontificate through his minions about what a great success MTD is/will be. They also don't have the ability (or can't be bothered) to answer the telephone and presumably won't have staff who could stand a chance of understanding what they are being asked. I mean, imagine an HMRC person being asked a question about 'how do I convert my hand-written cash book to a spreadsheet' or ' how can I afford the computer and the software to record my rental income'. The mind absolutely boggles.
The worst thing of all is that they actually seem to believe that MTD is a miracle cure and that records will magically become better instead of errors becoming less obvious because ' the computer did it'. Naivety in the belief that money won't go in the back pocket because there is a computer somehow doesn't convince my cynical mind.

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Replying to tedbuck:
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By lh3f9764bg1g
24th Aug 2021 15:02

I haven't seen bookkeeping software yet that is capable of the job or . . . . . more accurately . . . . . I haven't seen software yet that is idiot proof to the extent that mistakes (sometimes massive) can be avoided. Furthermore . . . . . . it's a time consuming business using such software when compared to our old way of doing things (in our case that'll be spreadsheets). I would be very wary indeed of setting up clients with bookkeeping software and then letting them loose on it. If this job was easy - everybody would be doing it!

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Replying to Tornado:
By SteveHa
23rd Aug 2021 15:07

Tornado wrote:

THIS IS NOT OUR RESPONSIBILITY

Ultimately, it is the responsibility of HMRC to ensure that those affected by taxation know what they are required to do and also the responsibility of HMRC to ensure compliance.

Quote:

The responsibility of MTD lies solely with HMRC and it is they that need to be really sure that they are capable of dealing with this, not us.

Except it isn't, is it. Tribunal after tribunal has confirmed that ignorance of the law is no excuse, and so HMRC take this to mean that they have to do diddly squat to inform anyone. And diddly squat is what they do.

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Replying to SteveHa:
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By raju m
23rd Aug 2021 15:15

By doing diddly squat HMRC could charge billions in penalties and their staff could receive big bonuses and rewards. Win win for HMRC.

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Replying to raju m:
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By tedbuck
23rd Aug 2021 16:02

AAh! And there you have it. Taxation by stealth by way of fines - look at GDPR fines.
Look at ICO dishing out notices to all and sundry at £35 a time. Look at VAT penalties and so on.
I think I saw a data breach by the GDPR people but didn't notice them getting a fine. Then there are all the HMRC people who leave their computers on trains - no fines for them.
And what about the ministers getting their mates PPR contracts - no fines for them either.
But let Joe Public be a day or so late filing his quarterly submission and the whole weight of HMRC will fall on him. Doesn't matter that HMRC doesn't do anything on time these days. I suggest we all have a go at them for the fees cost of their time wasting and see how they like it.
And what about the waste of money that requires HMG to need to collect so many taxes. Mainly mismanagement in the NHS but no-one will actually admit it.
Rant over - pro tem at any rate.

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Replying to Tornado:
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By GHarr497688
23rd Aug 2021 15:31

If I am not retired by 2023 I will call HMRC the worst government department around and then I will ask my clients to call them up. So far I have put up with MTDfVAT, AE,RTI,Furlough,SEISS and AML - thats my lot I have had enough of this game. If HMRC want everyone's books on a computer then either they will do it themselves or they will have to find "others" to do. Either way the tax system and taxpayers books will be rubbish and the tax system will severely compromised. I really hope the Professional Bodies , Accountants and Taxpayers fight the Software magnets and HMRC tooth and nail . I pray it all goes horribly wrong for them to a point where Joe public see Government for what it is!

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Replying to GHarr497688:
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By bluebaron
23rd Aug 2021 17:23

Well put. I'm so fed up of these "once in a generation" changes that we have to deal with every couple of years (add the new Companies Act to the list!). I already resent having to submit payroll information to HMRC every month, instead of once a year. I refuse to get involved in submitting sole traders' accounts four or five times a year.

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Replying to Tornado:
By Nebs
23rd Aug 2021 19:19

They sold all the carrots and spent the proceeds on sticks.

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By carnmores
23rd Aug 2021 16:56

History repeats itself first as tragedy and then as farce, first RTI then MTD and now this.
as detailed above they simply don't listen and frankly couldnt be bothered anymore

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By HLB
23rd Aug 2021 18:00

I wonder if HMRC will resurrect Hector the Inspector and advertise the coming changes as they did with the introduction of Self Assessment. Somehow I doubt it very much.

I don’t think it’s a coincidence that for the last few weeks I have had details of practices for sale. I had already decided to retire in 2022 before the MTD ITSa revised timetable was published and do not envy those who have years to go to retirement.

A tremendous amount of experience will be lost to the profession but HMRC won’t notice as they no longer look at much anyway. This is NOT progress.

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Replying to HLB:
Tornado
By Tornado
24th Aug 2021 09:43

'I wonder if HMRC will resurrect Hector the Inspector'

We used to cut out Hector in cardboard and put him on the top of the Christmas Tree every year. We might revive that tradition to remind us of the time when HMRC comprised real people who had responsibility and cared enough to co-operate with us rather than dictate to us as is today's fashion. (We all know what happens to Dictators in the end).

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Replying to Tornado:
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By lh3f9764bg1g
25th Aug 2021 10:07

What, do they end up in UAE with a helicopter full of cash? Or in America with a plane load of shoes? Or in Jeddah with all those cars and all that money?

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Replying to HLB:
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By carnmores
25th Aug 2021 09:42

Great Post spot on

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Replying to HLB:
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By Jimess
25th Aug 2021 13:59

I don't think Joe Public would know what a tax inspector looks like these days, they don't seem to exist any more, just "Officers" and "Higher Officers". No use rolling out Hector again, he's a world away from the HMRC of today, I am very sad to say.

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By snickersinatwix
24th Aug 2021 08:25

Is it actually legal to impose a system on taxpayers which means they have to spend money to file a tax return?

Taxpayers will have to have a computer and they will have to have the appropriate software. We still have some clients who do not have a computer, hard though this may be to believe in this day and age. and as for software - I think I can safely say that currently, none of my rental clients spend money on software to record their rental income. Yes they pay our fees, but what about all of the unrepresented taxpayers out there?

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Replying to snickersinatwix:
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By lh3f9764bg1g
24th Aug 2021 08:39

And when are they going to tell all of those unrepresented Taxpayers of the trouble that lies ahead of them?

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Replying to snickersinatwix:
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By ClaireR75
24th Aug 2021 21:17

I currently process my own tax return and its on a spreadsheet and costs me nothing more than my own time... In 2023 I'll have to spend probably a minimum of £20 per month, £240 pa on a piece of software which tells me nothing that I didn't already know... I feel like it's another stealthy tax and lining the pockets of the likes of quickbooks, sage, xero.... And you can't stop paying because if you do all your data disappears becomes unaccessible ..... Cheesed off doesn't come close....

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Replying to ClaireR75:
Morph
By kevinringer
25th Aug 2021 09:18

Claire, HMRC say you will be permitted to use spreadsheets and bridging software. But a spreadsheet capable of handling MTD VAT is an order of magnitude more complex than MTD ITSA. Accountants might be able to operate a spreadsheet but Joe the Plumber won't.

Thanks (2)
By Nebs
24th Aug 2021 14:17

How about industrial action. Everyone chips in to cover the lost fees, then the accountants that do their tax returns send disengagement letters to our 650 MPs, citing increased pressure of work due to MTD.

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Replying to Nebs:
Tornado
By Tornado
24th Aug 2021 15:19

I guess that a high percentage of MP's will fall into the HMRC trap and have to deal with MTD for Self Assessment Income Tax anyway on other income, so it may be just a matter of waiting until they realise the full extent of their own obligations before something happens.

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Replying to Tornado:
Morph
By kevinringer
24th Aug 2021 17:15

I would suspect most MPs would pay for an accountant and would probably not notice the doubling in fees. But aren't MPs excluded of filing online anyway? In which case, maybe they're exempt from MTD?

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Replying to Tornado:
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By Ajtms
27th Aug 2021 14:07

MP's Judges, staff and pensioners of the Home Office and Foreign Office are excluded from MTD and they have never been allowed to file their returns electronically. We have always to send them in paper. Their returns are dealt with at PD1 who answer the phone immediately and provide a great service other than denying the taxpayers electronic lodgement or access

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By raju m
25th Aug 2021 10:53

Very soon most small accountancy firms will have negative Goodwill.

They will have to start paying to buyers when they want to retire and sale the firm.

Thanks (1)

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