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MTD ITSA: Software and tax calculations | AccountingWEB
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HMRC answers your MTD ITSA software questions

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Rebecca Cave put some readers’ questions to HMRC about MTD-compatible software and who will be responsible for calculating the tax payable under MTD ITSA and got some surprising responses.

7th Sep 2022
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We put some of your questions about who will be responsible for calculating the tax payable under Making Tax Digital for income tax self assessment (MTD ITSA) and MTD-compatible software to HMRC. Here are the responses. 

Free software 

At the beginning of the Making Tax Digital (MTD) saga back in 2016, HMRC promised that there would be free software available to allow simple businesses to file under MTD. “Simple” in these terms means a sole-trader business that is not VAT registered and doesn’t run a PAYE scheme. AccountingWEB readers want to know what is happening regarding HMRC’s free software for submitting tax returns.

HMRC replied: “HMRC is committed to ensuring free MTD ITSA software products are available for the smallest businesses with straightforward affairs. Many MTD software products will also allow these same customers to report information about their personal income and make a final declaration of their total income and a self-assessment of their tax liability after the end of the tax year. 

“In cases where a customer’s software does not support personal income reporting, HMRC will continue to offer a service through which customers can report this income (and make the final declaration). For non-MTD customers in income tax self assessment, the existing online SA return service will continue for the time being.”

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Replies (81)

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By NotAnAccountant2
07th Sep 2022 16:07

Well, that clears up one thing:

Quote:
“In cases where a customer’s software does not support personal income reporting, HMRC will continue to offer a service through which customers can report this income (and make the final declaration)"

Perhaps I'll dust off my efforts from a year ago and try and move it forwards now that I only have to worry about the property and self employment bits.

Thanks (1)
Replying to NotAnAccountant2:
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By Hugo Fair
07th Sep 2022 16:34

Yup ... the 'death of the tax return' doesn't apply if the return in question is a SATR!

Which is just as well as something's got to work ... and "MTD software products will also allow these same customers to report information about their personal income" is not only hopelessly optimistic but (deliberately?) incomplete.

Do HMRC really expect these new products to cope with EVERY reportable/taxable event currently covered under SA?

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By Hugo Fair
07th Sep 2022 16:39

*Interesting* (but possibly not thought through) HMRC responses:
"An agent will be able to do this (meet MTD ITSA reporting obligations using MTD-compatible software) on a client’s behalf, either through access to their client’s software .."

So the absolute no-no of an agent signing-in to a client's software in order to make submissions ... is suddenly OK?

Thanks (8)
Replying to Hugo Fair:
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By creamdelacream
07th Sep 2022 18:06

I think they mean the agent can be authorised within the software and make the submissions on the client's behalf, just as with MTD VAT now.

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Replying to Hugo Fair:
By Charlie Carne
08th Sep 2022 11:42

Since when has accessing clients' software been a "no-no"? Cloud accounting products ( like QBO and Xero) have been doing exactly that for years. The software even records who is signed in and who made the submission.

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Replying to charliecarne:
Morph
By kevinringer
08th Sep 2022 22:13

We have agent portals for some software such as Sage and QBO, but we can't possibly buy agent portals for all software, especially for software for which we only have one client using. If we don't have agent access, we have no choice but to log in using the client's credentials.

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By Hugo Fair
07th Sep 2022 16:50

Some non-answers (or just nonsense) ... ?

“Once data has been entered into the spreadsheet, any further transfer, recapture or modification of that data must be done digitally.”
* How do you correct a typo in your spreadsheet if it's your digital source from MTD's perspective?

"HMRC believes the best customer experience is gained where a customer uses fully integrated software that does both record-keeping and submissions"
* I believe that the best of travel is first-class on an aeroplane ... but that doesn't mean that I can afford to do this (or that it would be beneficial for anyone except the airlines).

“It is acceptable to use one piece of software for submitting quarterly updates and separate software to make the final declaration and self-assessment.”
* So who is making corrections/amendments (and in which piece of software) prior to declaration?

“The taxpayer will still be responsible for confirming that the information they are submitting to HMRC is complete and correct and for making their self assessment. HMRC will provide the tax calculation but the customer must declare they agree that this is their liability for the tax year.”
* Chilling (if hardly surprising) indeed.
The average taxpayer is as yet unaware of how much data supplied by HMRC is either incorrect or missing ... so they'll have to learn to ignore everything pulled through by the API and start from a blank sheet - which is where their responsibilities & liabilities commence.

Thanks (7)
Replying to Hugo Fair:
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By NotAnAccountant2
07th Sep 2022 17:47

Hugo Fair wrote:

“It is acceptable to use one piece of software for submitting quarterly updates and separate software to make the final declaration and self-assessment.”
* So who is making corrections/amendments (and in which piece of software) prior to declaration?


This is either a very clever bit of misdirection or a very incompetent response from HMRC.

(teaching you to suck eggs sorry!) There are three stages to MTD.

The quarterly stuff - despite the various issues around jointly owned property this is actually a very trivial bit of the process, time consuming and error prone sure, but trivial.

Then there's the EOPS - this makes the information for the business (SE or property) final all expenses, adjustments, income etc.

Then there's the finalization - this is where everything else is brought in, pension contributions and gift aid are the two obvious things (to me) that will make any tax calculation prior to this point incorrect at best.

HMRC don't make it clear whether the "final declaration" is referring to the EOPS - in which case how do accountants use different software to manage the data that the client has entered? - or the finalization of the tax return - which happens after the EOPS (although in practice I'd not expect people to be finalizing the EOPS until they were also ready to finalize the tax return)

Nobody with an accountant is going to want to do the EOPS - that's almost always *WHY* people have an accountant. So are HMRC saying that the accountant will be able to do it with different software (how?) or are they assuming that the taxpayer's software will do it?!!!!

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Replying to NotAnAccountant2:
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By creamdelacream
07th Sep 2022 18:12

I think it's going to work like the current FETCH system in TaxCalc whereby the final declaration (effectively the SA100 minus the SE and property supplements) will pull the data through regardless of which software submitted it. I think it is the most reasonable solution because you then do not have to have one piece of software doing everything.

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Replying to creamdelacream:
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By NotAnAccountant2
08th Sep 2022 10:18

creamdelacream wrote:

I think it's going to work like the current FETCH system in TaxCalc whereby the final declaration (effectively the SA100 minus the SE and property supplements) will pull the data through regardless of which software submitted it. I think it is the most reasonable solution because you then do not have to have one piece of software doing everything.

Once the EOPS is done I agree that there's absolutely no problem going from that to the final tax return - any more than there is any issue with my employer using a completely different system to do my P60 and P11D. My P60 (and P45) figures did flow though to my tax return successfully this year, my P11D didn't.

The problem comes with going from the quarterly figures (submitted within 30 days of the quarter end) to the EOPS.

I have to go back in time - 90s - to be able to speak from experience but I used to be self employed with an accountant who did my tax return for me.

I raised invoices to clients, I incurred expenses, I kept track of business and personal mileage in my car, I kept track of my other car expenses, I even calculated my cost per mile and make estimates of costs of running an alternative vehicle as I was doing a very high mileage where fuel efficiency of different vehicles was potentially significant enough to justify changing my car.

But at the end of the year I gave all of my records/invoices/receipts to my accountant and he did whatever magic he did to get to the figures for my tax return. He calculated my NI liability and told me how much I'd need to pay and when. His figures were never a surprise but I didn't know how to calculate them exactly, only approximately. (Technically, given the figures he put on my tax return I could calculate the tax liability but I didn't know how to get to exactly the figures on the tax return from my invoices and receipts)

The fact is that I couldn't have done the EOPS myself. The adjustments were relatively small in my case but not zero but my business year and the tax year didn't align and I never fully understood how that worked.

Perhaps I could do the EOPS myself now if I were still self employed - but I'm not confident that I could (I'd probably get something close enough that only an accountant would know it was wrong and why). But that's with 30+ years of interacting with the tax system, even if only as an employee who has to do a tax return. I'm sure my 25 year old self couldn't do it.

How does the accountant convert the quarterly figures, done in some random bit of software by their client, into the final accounts for the EOPS? And correct any mistakes in the client's data?

Thanks (2)
Replying to Hugo Fair:
Tornado
By Tornado
08th Sep 2022 14:13

"* I believe that the best of travel is first-class on an aeroplane ... but that doesn't mean that I can afford to do this (or that it would be beneficial for anyone except the airlines)."

..... just like MTD, which is eco unfriendly due to the massive amounts of electricity that compliance with MTD will require not to mention the millions of extra SAR's that will be submitted as people grapple with software that they do not understand and make innocent errors that look suspicious.

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By GHarr497688
07th Sep 2022 16:51

42 years in Accountancy and reading this rubbish. Makes me sick to my stomach. Lets face it now this isn't going to work is it. HMRC state:

"HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world. Making Tax Digital is making fundamental changes to the way the tax system works – transforming tax administration so that it is:

more effective
more efficient
easier for taxpayers to get their tax right"

How can putting your records into a computer alone be more effective, more efficient and easier to get their tax right.

Computers in the hands of taxpayers who don't understand technology or accounting principals will lead to inaccurate accounts and tax computations that will be such garbage no one will understand them - putting things right will take longer and cost more . Serious risks to lender and the public purse will be the result as profits stated will be wrong and tax payment on those incorrect profits inaccurate.

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Replying to GHarr497688:
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By Alanpryan
08th Sep 2022 10:23

Yes, I started in 1979 myself, and I seriously don't think they care if the information is correct - just as long as it is received digitally! The unchallenged, exorbitant CIS refund claims made by taxpayers now would seem to prove this

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By Hugo Fair
07th Sep 2022 16:55

And the only 'fun' item?

“Customers can choose whether to receive these tax estimates or not. A customer’s MTD-compatible bridging software will need to have the functionality to allow it to receive this information from HMRC using the API [application programming interface] platform.”
* Do HMRC really believe that taxpayers are waiting with bated breath to be told quarterly an estimate of their tax-bill for the year?
And what reaction do they expect when said taxpayers find that the estimate is as accurate (in either direction) as throwing a dart at a board of random numbers?

Irretrievable reputational damage awaits HMRC ...

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Replying to Hugo Fair:
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By Arbitrary
08th Oct 2022 17:23

I didn't think HMRC had any reputation left to damage, irretrievably or otherwise.

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By ireallyshouldknowthisbut
07th Sep 2022 17:31

How are other entries on the tax return dealt with?

A typical landlord would have, PAYE income, benefit in kind, bank interest, some minor dividend income, some pension, they might have student loan repayments or child benefit repayment due. This is all currently filed on the SATR in a simple manner along with the property income. That is to say all the incomes and deductions are on a single document, and the tax is then calculated.

How is that data remitted to HMRC? Or will the tax payer be required to submit a SATR without the 2 lines of property income, and then have to combine this with HMRC's tax calculation?

What is the actual process for agreeing HMRC's tax computation, which presumably wont be instant. Is this an extra return that is required? Can agents file this agreement? Or does the tax payer need to log into their personal tax account to agree it?

What is the timeframe between sending the landlords data to HMRC and getting the computation back?

Given the multiple returns and increased interactions, how much extra time to HMRC think this will take the tax payer compared to the existing single SATR form?

Thanks (6)
Replying to ireallyshouldknowthisbut:
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By GHarr497688
07th Sep 2022 17:43

Ring SAGE or Xero or any of the other idiots at these software companies in bed with HMRC - they will have all the answers apparently lol. Funny how the one's that won't be actually using MTD are the one's calling the tune!!

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Replying to GHarr497688:
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By kate123456
08th Sep 2022 14:41

GHarr497688 wrote:

Ring SAGE or Xero or any of the other idiots at these software companies in bed with HMRC - they will have all the answers apparently lol. Funny how the one's that won't be actually using MTD are the one's calling the tune!!


Funny, I actually had a row with a Quickbooks representative recently who advised me to get rid of the 'difficult' clients that are either dyslexic, elderly or simply unable to deal with paperwork or computers in general.
On another note, I have several clients that have paid the correct amount of tax, using the correct references. Their tax accounts are now showing 'tax due' and 'overpayment due' of the exact same figures. The fact that HMRC cannot even match these payments at their end makes it hilarious that they believe we can have the most advanced digital system in the world. Come on, really.
Develop this system if you like for those that would welcome it but don't make it mandatory for those whose current systems work perfectly well as they are.
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Replying to ireallyshouldknowthisbut:
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By creamdelacream
07th Sep 2022 18:22

The final declaration will essentially be the tax return minus the SE and property supplements. The PAYE/pension info can be pulled in from the API or inputted manually as it currently works and other income such as interest and dividends would work in the same way as they do now.

The tax will be calculated the same way it is now and shown to the tax payer/agent instantly. Agreeing and submitting is set to work in the same way as I understand it.

They have indicated that the tax estimates following the quarterly updates will be correct - you know what I mean by "correct" - within 1 hour.

No idea on the last question

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Replying to creamdelacream:
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By Hugo Fair
07th Sep 2022 20:07

I'm just curious, but all 3 of your responses on here today have an undercurrent of certainty regarding either what HMRC mean or are planning. Do you have an inside track to MTD info?

I ask, not for the sake of arguing, but because several of your points are not in line with what I've heard and/or extracted from various software developers.

Frankly I'm becoming less concerned with the viability/difficulty of compliance for taxpayers & agents ... with the deadline clock ticking ever faster, I'm now solely focused (as I believe Rebecca is) on trying to get one comprehensive & consistent 'story' from HMRC as to how the various components and processes will work.

So anything that fills in one or more of the voluminous holes in that 'guidance' is welcome ... as long as it is the official line not just guesswork (which therefore means I ignore such guesses even when they emanate from HMRC sources).

For instance, per your specific post to which I'm responding here, my experience of the accuracy (and more importantly completeness) of "interest and dividends" being 'pulled in' when I complete my SATR online is poor.
What I can't get anyone at HMRC to understand/admit is that (for an unrepresented taxpayer) 'partially correct' data is worse than no data. It makes the person flip-flop between doubting their own understanding and a growing realisation that HMRC aren't infallible.
At best a lot of time is wasted - and at worst the taxpayer is 'encouraged' to take whichever set of figures results in less tax (irrespective of the rules).

BTW - as mentioned in an earlier post by NotAnAccountant2 at 17:47 today - it is still unclear where a lot of amendments and additional data are to be entered.
There is a less than clear cut-off once the QUs have been 'corrected' (possibly not for the final time) ... but before the 'final declaration'.
Which items or types of data belong in an amended QU - which in the EOPS - and which somewhere else (especially if you find something needs to be changed *after* the declaration)?

These kinds of issue (and there are many, many of them still outstanding) are not just matters of guidance/communication ... they go to the heart of practical issues regarding who does what & when, with what software and with whose authority?

Thanks (3)
Replying to Hugo Fair:
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By creamdelacream
07th Sep 2022 21:56

I said the employment/pension info can be pulled in as it currently can from the RTI system) The interest and dividends would work the same as they do now.

I do not have any inside knowledge, I have just attended the webinars and asked questions.

I am not 100% certain this is how it will work but that is my understanding so far from what I have seen and read.

I agree that getting info from the PAYE/pension submissions can sometimes be inaccurate but you can manually override the figures from the P60 the client has provided if needed. I would have thought they would need to ensure a much higher level of accuracy for MTD ITSA for it to function properly. However, like you I'm not holding my breath.

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Replying to creamdelacream:
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By Jo Nokes
07th Sep 2022 23:09

I had a case just to day, where a client has three separate pensions, and tax deducted, but the Fetch from TaxCalc shows no information whatsoever. This function is shown as Beta, but it's been operating for several years. I would say in some 50% of cases, this function doesn't give you the inforamtion you need. Even when it works, the pension figure is just one total, even though it is clear that HMRC have the separate figures available.

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Replying to Jo Nokes:
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By Winnie Wiggleroom
08th Sep 2022 08:50

Precisely why Taxfiler steadfastly refuse to pre-populate returns, the data is totally inaccurate, we have a H&W company, same salary, same PAYE scheme one shows the other does not.

My first question to HMRC would have been - What are HMRC going to do differently to get this right after it being incorrect for all these years, are they able to assure us that every single piece of data that they have been sent for an individual will show up?

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Replying to Winnie Wiggleroom:
By ireallyshouldknowthisbut
08th Sep 2022 09:28

Agree with Winnie, if the new tax return is going to pull data from HMRC systems...........they need to get those underlying systems right for starters........or they are just building on top of a half functioning system.

A really basic point would be to pull the P11D deadline forward 3 months so the data is available in April for tax returns. We do about 10% of our tax returns in April..and often have returns stacked up waiting for the one number.

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Replying to ireallyshouldknowthisbut:
ghm
By TaxTeddy
08th Sep 2022 10:14

I think we have highlighted a fundamental problem here.

Genuinely, I think the MTDIT team have no knowledge of how bad the pull through of data from HMRC really is. My guess would be that they assume that it works perfectly whereas we all know the reality.

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Replying to TaxTeddy:
Morph
By kevinringer
08th Sep 2022 22:32

May I draw your attention to HMRC Agent Forum thread SA-9471.

SA has had just one API for the last half dozen years (it was launched in 2017). We've been banging onto HMRC for 6 years that the API is not reliable. We have raised it many times on the Agent Forum. HMRC brushed off our complaints until SA-9471 when evidence supplied by me and other agents was taken seriously for once. After a number of months, in June 2022 HMRC said:

"Recent examples of cases supplied have been helpful in identifying the root cause of the issue which relates to the data input and not the SA Pre-Pop APIs for SA cases. We are now working through options to resolve this issue. We would like to thank the agent community for their support in providing example cases which has allowed us to finally get to the root of the problem."

In other words, HMRC agree there is a problem, but don't know what the cause is or how to fix it. HMRC then locked the thread. There have been no further updates from HMRC.

When HMRC first started trying to sell MTD, HMRC said the APIs used "agile technology" which enables bugs to be identified and fixed quickly. I was under the impression "quickly" meant in a matter of days. But HMRC refused to listen to us about this bug for 6 years, and when they did listen, they have taken months and no fix.

Remember, this is just one API. There are dozens in MTD ITSA.

Key point: HMRC say it isn't the API that is faulty, it is how the API retrieves data from HMRC. As far as I'm concerned "API" is the whole process of data transfer from one digital system (HMRC) to another (our Tax Return software). After all, that's what MTD ITSA is doing.

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Replying to kevinringer:
ghm
By TaxTeddy
09th Sep 2022 09:16

Thanks Kevin - good to know.

And what I find particularly interesting is the HMRC attitude to problem-solving. If this is their approach to a long-standing single issue, my goodness what on earth are they going to do with the multiple MTDIT issues which come out of the woodwork if this ever goes live?

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Replying to TaxTeddy:
Morph
By kevinringer
09th Sep 2022 09:34

There are numerous long-term problems that HMRC have no interest in solving. I can remember 64-8 processing being raised in the days of Working Together in-person meetings. More recently I spoke to HMRC VAT Variations about a couple of problems with HMRC IT. HMRC staff told me that there is no money to fix HMRC's IT problems because all IT bug-fixing funding has been transferred to MTD. Given the massive amount of resources HMRC is putting into MTD, HMRC have very little to show for it. And meanwhile everything else HMRC falls to pieces.

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Replying to TaxTeddy:
Morph
By kevinringer
08th Sep 2022 22:34

We need to also remember that the APIs rely on the client getting it right. We all know about client input errors, but most are using spreadsheets and most clients will struggle to digitally link all the APIs. Many clients get it wrong with VAT where there are only 9 boxes. How many clients get their inputs and outputs the wrong way round? If they can't link 9 correctly, what sort of mess are they going to make of the dozens required for MTD ITSA?

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Replying to Jo Nokes:
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By Southwestbeancounter
08th Sep 2022 11:33

Jo Nokes wrote:

I had a case just to day, where a client has three separate pensions, and tax deducted, but the Fetch from TaxCalc shows no information whatsoever. This function is shown as Beta, but it's been operating for several years. I would say in some 50% of cases, this function doesn't give you the inforamtion you need. Even when it works, the pension figure is just one total, even though it is clear that HMRC have the separate figures available.


Yes we had this exact scenario only today - the client has seven private pensions but nearly all of them have started in the 2021/22 tax year so, as I had no independent check of the P60s, I had to analyse out all pension monies received into the bank account to get them to reconcile. Had it been a client who always has seven pensions and I had the relevant seven P60s then I wouldn't have worried but in this case there was every chance I was missing one as it was the first year.
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By JustAnotherUser
08th Sep 2022 09:21

Drives me crazy...

Rebecca Cave put some readers’ questions to HMRC could have been....

"Rebecca Cave put some readers’ questions to Head of Compliance Policy for MTD, Joe Bloggs and his team"

HMRC replied... could have been...

Tax Specialist Don Johnson replied.....

HMRC confirmed....could have been...

Domain Architect and Tax Specialist Maria Marzia confirmed, as per this link and guidance....

HMRC reassured accountants...could have said... you get the picture...

66,000 employees.. no doubt some very intelligent and well educated people all summarised into 'HMRC', what's clear is that no one wants publicly claim they're a part of this mess nor want their names associated with it.

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Replying to JustAnotherUser:
Head of woman
By Rebecca Cave
08th Sep 2022 10:01

I need to go through the HMRC press office to pose questions. I am not provided with the names of the people who provide the answers.

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Replying to Rebecca Cave:
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By Hugo Fair
08th Sep 2022 10:21

Not *your* fault, but that's the problem right there isn't it?

If I start a sentence with 'Once upon a time ..' it will sound like a fairytale.
But it's really not that long since I used to be able to pose such questions direct to the relevant person within HMRC - i.e. the person most likely to have the requisite knowledge to provide an answer - AND be able to ask follow-up questions if the answer lacked clarity.

In those rare cases where the HMRC bod admitted to not knowing (or at least being unsure), then you could rely on an effective escalation process ... which generated a response from a named individual.

Everything now seems geared to primarily 'protecting' HMRC rather than providing answers to valid questions ... the first signs of this approach appearing during the early days of RTI (the 'live' phase not the pre-pilot phases) seem to have coincided with the increasing frequency of HMRC having to defend/promote positions on which they themselves are unsure of the details!

And that of course is the real problem, illustrated so admirably by your article.
If HMRC "don't know" then they have nothing to communicate ... and developers will use guesswork rather than specs ... and the taxpayer will ignore what appears to be no more than vague wishes (without any incentive to join in 'the game').

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Replying to Hugo Fair:
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By mikeyban
08th Sep 2022 10:33

What a load of rubbish..... If an alien had landed and looked at this you would think this was mad...... Cannot get through to HMRC..... massive back logs..... Staff working at home who cut the phone off if they do not like what they hear. Accountants leaving the profession. Clients who shut their eyes when you mention MTD.

For goodness sake with the new administration in place remove this car crash before it occurs.

I have worked in the profession for thirty years and this will not work.

If HMRC wants quarterly payments we as agents will buy into that.

Madness.

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Replying to mikeyban:
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By mikeyban
08th Sep 2022 10:34

Not a reply to Hugo.... Sorry .... just a rant

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Replying to Hugo Fair:
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By cbarling
08th Sep 2022 11:03

My brother-in-law used to be fairly senior in HMRC before he retired, working in strategy and policy. I remember asking him a question once (can't remember exactly what it was but it was fairly technical) and he neither knew the answer nor who to ask to get it.

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Replying to Hugo Fair:
Tornado
By Tornado
08th Sep 2022 15:40

"Everything now seems geared to primarily 'protecting' HMRC rather than providing answers to valid questions "

There is definitely a lot of Fire Fighting going on at the moment.

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Replying to Rebecca Cave:
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By JustAnotherUser
08th Sep 2022 10:40

Ok, thank you for your transparent response.

Thank you for sending the questions and creating this article.

It does speak volumes that this is the approach the industry has to take to try and get answers, no engagement, one way communication, likely canned responses from a knowledge base that almost definitely subject to change.

Where are the people in charge, the decisionmakers, those with deadlines to meet and the ones really responsible, they need to feel the same heat accountants feel.

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By Mr J Andrews
08th Sep 2022 10:36

Who are these mysterious HMRC officials you've been putting these questions to Rebecca ? { Only to receive the usual half baked responses }.
Next time in touch it would be useful to know when the Revenue are proposing to break the news about MTD to Joe Public. And what additional resources the Revenue plan to take on to meet with claims to Exemption from MTD and dealing with those who simply won't have a clue , let alone claiming Exemption.

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Replying to Mr J Andrews:
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By JustAnotherUser
08th Sep 2022 10:46

She has replied regarding the source above which I am thankful for her transparency.
Based on the response though, anyone can send them these questions for their half baked replies... [email protected] , maybe if everyone emails them the same questions, they may get the point.

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By steve 12321
08th Sep 2022 10:37

If I keep punching myself in the face I will realise it is painful and not needed. If I keep punching someone else in the face it probably won’t hurst so much. It feels like tax payers are being the ones being punched here and it’s about time it stopped. When you read these articles, which I am grateful for, it just sounds completely bonkers and most defiantly pointless. When you do pointless things they need to be stop. Having an accounting system is needed. But it works in different forms. It’s annual - keep it annual. Submit once a year. Let people focus on business , employment and don’t make changes that make life harder. It will not work anyway - not very well- and will cause chaos. That’s how it seems. But what do we all know?

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Replying to steve 12321:
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By Southwestbeancounter
08th Sep 2022 11:43

Totally agree, however I feel accountants are the ones being 'punched' more, at least at the moment - the blows might well be coming on the horizon for the taxpayers, it's just that most of them haven't seen them coming yet!!

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By Ammie
08th Sep 2022 11:08

One thing is for sure, my decision not to over immerse myself in the MTD fiasco until the blurry lines come into focus was spot on, as I would have been wasting unimaginable amounts of chargeable time.

It's a risk leaving it too late, but I expect that even by this time next year HMRC will still be "paddling" like mad to "iron out" unsolved issues. I expect many will not be addressed until after MTD has started rolling out and even then it will take one or two years to reach stability and sensible functionality.

I run a small practice with mainly micro clients most of which are not interested/don't care, but will soon be very interested and particularly in what my additional fees will be! Some have made the effort but are very slow in progression and produce information worse that a bag of unprocessed receipts and bank statements.

There will be a lot of "that will do" accounting!

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Replying to Ammie:
ghm
By TaxTeddy
08th Sep 2022 12:29

I'm sure you are right. And we shouldn't lose sight of continually asking the question -

WHY ARE WE REQUIRED TO DO THIS?

HMRC simply stating there might be nebulous "benefits" to the taxpayer just won't wash anymore.

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By North East Accountant
08th Sep 2022 11:14

“HMRC will provide the tax calculation but the customer must declare they agree that this is their liability for the tax year.”

Final declaration done, thank god that's all done for that tax year you think.

No way.................HMRC will assess the final tax and then for scores of cases you'll spend another year or so trying to get HMRC's incorrect assessments altered.

The traffic that HMRC are going to create with MTD ITSA in it's present form is crazy and none of it adds any value, whatsoever. Mental.

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Replying to North East Accountant:
ghm
By TaxTeddy
08th Sep 2022 12:32

Take a moment to recall the "simple assessments". Remember those? Usually they were wrong - so we then had to respond / appeal to HMRC to give them the information to correct it. Then - silence for 6 months.

Imagine that for 50-odd MTDIT final calculations and that's pretty much what we will be dealing with. Every year.

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By BryanS1958
08th Sep 2022 11:22

Why are we even asking these questions? Why isn't anyone saying to HMRC 'MTD ITSA should be scrapped'?

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Replying to BryanS1958:
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By Southwestbeancounter
08th Sep 2022 11:53

BryanS1958 wrote:

Why are we even asking these questions? Why isn't anyone saying to HMRC 'MTD ITSA should be scrapped'?


Absolutely!
That's the only question that really needs to be asked, along with when!!
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Replying to BryanS1958:
By ireallyshouldknowthisbut
09th Sep 2022 13:58

BryanS1958 wrote:

Why are we even asking these questions? Why isn't anyone saying to HMRC 'MTD ITSA should be scrapped'?

Well that is essentially what this is about, exposing the project for the complexity which accountants understand but is only just slowly starting to dawn on HMRC as to why quarterly filing is already dead and buried, they just don't understand why.

Fundamentally I don't think software developers or HMRC understand what accountants actually do. We take a hotch potch of data, fix it up and distill it into as (near as possible) set of books on which tax can be correctly charged. The skill level is huge, as the the breadth of scenarios. Its seems to think all we do is copy a couple of numbers in and run some accruals. Granted some bookkeeper_playing_accountant_dressup might do this, but the majority of us are trying really flippin hard to work out our clients profits, and work out their tax bills in as quick an efficient manner as possible, not to mention supporting their businesses.

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By Twickers Call
08th Sep 2022 13:21

HMRC is evading the questions. Not replying to the question who is paying for the software. HMRC has not answered about the free software. Keep saying they expect software companies to produce free soft ware. I wonder why private investors produce free service?
HMRC is trying to evade the issue by saying that the free software available not mentioning MTD for income tax. We all know old system still there. Who are they kidding?
Why not abolish MTD for Income tax now before it is too late for their mistakes. Wasting public money with no plans what so ever.
I hope new chancellor read about the MTD saga.

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