Save content
Have you found this content useful? Use the button above to save it to your profile.
Expect delays image
istock_expect-delays_mrdoomits

HMRC faces growing pressure to delay MTD ITSA

by

MTD ITSA project needs to be delayed by at least a year to properly address and resolve areas of concern, the Administrative Burdens Advisory Board (ABAB) has urged HMRC. 

2nd Dec 2022
Save content
Have you found this content useful? Use the button above to save it to your profile.

The influential group of business operators and tax advisers have called on HMRC to delay MTD ITSA for at least a year, as concerns around compliance costs and burdens associated with the digital project still haven’t been resolved. 

The annual report from ABAB is damning about MTD ITSA but succinctly outlines the five areas of concern that HMRC needs to address before rolling out the digital project:

  • The pilot programme: The report called this “mission-critical”, noting that “MTD ITSA is a far more complex proposition than MTD for VAT”. So ABAB said “it is vital that as many real-life scenarios as possible are thoroughly tested through the pilot”. However, the independent group pointed out that the restriction of the pilot to businesses with a 5 April year end are hamstringing the programme.

  • Basis Period Reform: ABAB concluded that the reform will only add further complexity for the affected businesses and questioned whether necessary support and easements will be in place.

  • Alignment with tax year: The report also criticised the alignment of MTD ITSA quarterly reports with the tax year rather than the accounts year. The report said this decision was “unexpected and potentially adds further complexity”

  • Error correction: The report revealed that HMRC will require an error or omission in an MTD ITSA quarterly reporting to be corrected by resubmission of the return for the period in which the error or omission arose (unlike MTD for VAT). ABAB called this “inconsistent” and noted that this will increase the number of submissions. 

  • Other issues: ABAB listed the other unresolved issues that HMRC needs to tackle before rolling out ITSA, including the need to authorise multiple agents, how to deal with estimated profits for non-fiscal year-end businesses and the best way to deal with jointly let property all remain unresolved.

The influential group, which has the likes of Paul Aplin and Rebecca Benneyworth sitting as advisers, concluded that MTD ITSA needs to be delayed by at least a year for these issues to be resolved.  

Despite these five major concerns ABAB didn’t go as far as saying the project was completely off track, highlighted positive conversations with HMRC about prompts and nudges and the tax department’s intention to work with accounting tech providers to build this functionality into their software.

But the group flagged concern that bridging software is unlikely to include prompts, which is why HMRC needs to build this feature into the single customer account. 

Elsewhere, ABAB welcomed the tax calculation functionality although questioned its usefulness for anyone with complicated affairs, and called on the tax department to engage with the 400 plus MTD for VAT software providers to include basic MTD for income tax functionality. 

The report was published on Day Two of AccountingWEB Live, where panels and conversation across the exhibition show floor was consumed by predictions of possible delays or concessions. 

Considering the possibility of a delay announcement, Rebecca Benneyworth acknowledged in her opening keynote on day one of the Expo that “it’s all gone very quiet” over at HMRC. While TaxCalc’s Dean Shepherd predicted a two-year delay on the Tax Talk Live panel, quipping that "HMRC is trying to take an oil tanker and turn it into an aeroplane".

Basis period

The basis period reform was another major area of concern for ABAB and had a separate section in the report to summarise the impact on small businesses. 

The report outlines that the reform will mean that an estimated 528,000 sole traders and partners with non-tax year basis periods will no longer be able to calculate their annual tax liability on the basis of a single set of accounts. Instead, the report explained that these sole traders will have to apportion the results of the accounting periods which fall in part into the tax year. 

It is even worse for the 278,000 sole traders and partners who will have to apportion two years’ results, and who will have to use estimates for the second year rather than actual figures. In a further blow, the complex transitional rules come in as MTD ITSA is introduced. 

ABAB acknowledged that some businesses could change their accounting year but pointed out that there is a good reason why sectors like farmers and hospitality have accounting years that don’t align. 

“Basis Period Reform has been framed as a simplification and we understand the thinking behind it. But it delivers quite the reverse for a significant number of businesses, bringing them added compliance burdens and risks of errors.”

The report also covered other burdens like customer experience, the single customer account, off payroll working and more. 

 

Replies (118)

Please login or register to join the discussion.

Locutus of Borg
By Locutus
02nd Dec 2022 16:40

I question the whole purpose of MTD ITSA. What does it seek to achieve? The belief that it somehow closes the tax gap was surely debunked some time ago - genuine errors tend to go both ways and gaps in software bank feeds are not uncommon.

The cost and inconvenience to micro businesses and landlords of MTD ITSA is not trivial.

If it *really* is considered necessary then surely restrict it to those businesses above the VAT registration threshold, which are are likely already using software (mandated if VAT registered) and probably familiar with a quarterly reporting regime in the form of VAT returns.

I'm not sure anyone benefits from MTD ITSA other than the software suppliers.

Thanks (48)
Replying to Locutus:
avatar
By User deleted
02nd Dec 2022 19:38

The software suppliers in this have an attitude that stinks. They don't give a toss about what customers really need and have false (yes false, not even borderline false) advertising about their products and that they're necessary for ALL self-employed types

Thanks (25)
Replying to Locutus:
avatar
By Brodders
06th Dec 2022 13:55

Have always said the £10K threshold is absurd and if you insist on going ahead with this, make it align with VAT threshold because, as you say, they already are forced to do digital stuff

Thanks (0)
Replying to Brodders:
avatar
By Moo
07th Dec 2022 14:50

How many residential landlords are registered for VAT? I've never met one.
Although I agree if it was raised to VAT threshold that would take most unincorporated landlords out of MTD.

Thanks (0)
Replying to Locutus:
LL
By RickyRoark
08th Dec 2022 12:30

The purpose is easy - more power for the state. They don't believe it will close the tax gap, they want you to believe it.

HMRC benefit massively from MTD. They will need more resources to enforce it, bigger budgets, bigger pay from themselves. Parasites and villains.

Thanks (1)
By ireallyshouldknowthisbut
02nd Dec 2022 16:40

Kicking the can doesn't solve the fundamental problems, such as the insanity of requiring clients with 2 dozen transactions a year to file quarterly reports, based on what is just dogma.

its need to be fit for purposes, with a proper celling. I don't think turnover is the main driver, it should be transactional levels. Anything under 10 a month and software is generally a waste of time.

Thanks (25)
Replying to ireallyshouldknowthisbut:
Morph
By kevinringer
05th Dec 2022 10:01

I have a client with just 1 transaction a year (annual rent on farm land) who will be MTD ITSA mandated. Currently their SA Tax Return is easy: 1x rental income and 1x property allowance. MTD ITSA will increase the complexity, time and cost. And for what benefit?

Thanks (12)
Replying to kevinringer:
By ireallyshouldknowthisbut
05th Dec 2022 10:55

Quite. I deal with someone who does fireworks in their spare time as a freelancer. You can imagine what their quarterly will look like.

Nil. Nil. Huge. Nil.

All in about half a dozen transactions a year, and we use the round sum £1k on costs as there is little there.

Total income is £20k. We currently do it in about 20 minutes.

Why on earth does this need to be digital? There is a huge long tail of small businesses like this, many of which presumably are filed without an agent as they are so simple.

Thanks (9)
Replying to ireallyshouldknowthisbut:
By Charlie Carne
05th Dec 2022 12:54

I don't understand the problem you'll have with this client. In the three quarters with nil transactions, it will take you 30 seconds a quarter to file the nil quarterly update in any software that you have that is MTD-compliant. I have a very small client that pretty much stopped trading a year ago, but once a year raises a couple of very small invoices and wants to retain their VAT registration to claim inputs. I filed their VAT under MTD for the nil quarters via Taxfiler in seconds.

For your fireworks client, in the quarter that covers November sales, you can take the existing spreadsheet that you already prepare (I'm assuming from your post that you don't use accounting software for them) and link that to cheap bridging software (eg Taxfiler) and file it in 30 seconds on top of your existing 20 minutes' work. Admittedly, the filing deadline will be earlier under MTD for ITSA than 31 Jan following 5th April, but the work is essentially the same (plus 30 extra seconds four times a year).

I agree that implementation of MTD needs to be delayed by at least a year to allow proper testing of the system and I'd like to see the threshold raised considerably above £10k turnover, but the constant complaint of "what is it for" is getting very boring. You all know what it is for: whether you agree with that aspiration or not, it is to encourage digitisation of all accounting records. It is NOT about providing more information to HMRC, nor is it about paying HMRC 4 times a year, so please let's stop moaning that "if it doesn't give HMRC details of every transaction, then what is the point of MTD?". Like it or not, the world is moving towards a fully digital future and this is simply an initial step to bring accounting and tax into that future. Oh, and by the way, I feel pretty sure that after a few years of us all getting used to MTD, details of every transaction WILL be submitted to MTD, but asking for that level of detail from day one would be a huge ask and cause too many problems, so slowly, slowly catchy monkey.

Thanks (0)
Replying to charliecarne:
Tornado
By Tornado
05th Dec 2022 13:17

"is getting very boring"

It may be getting very boring for you Charlie, but you seem to fail to understand the very real difficulties that many thousands, hundreds of thousands or perhaps millions of people will have with this project and the obvious flaws that it has.

Unfortunately the 'I'm All Right Jack' view that you have does not reflect the real situation that has been repeatedly expressed thousands of times in AWEB alone over the last seven years or so.

If everything was alright, the MTD for ITSA would already be fully tested and running but we are still a million miles from that happening.

Thanks (14)
Replying to Tornado:
By Charlie Carne
06th Dec 2022 09:37

You have completely missed my point. I agree that MTD for ITSA needs delaying as HMRC's incompetence means that it is nowhere near adequately tested. I also said that the threshold should be raised to keep out the very tiny businesses (at least for some years to allow new systems to fully develop).

My point made repeatedly in these columns is that we can and should complain about the way that MTD is being implemented, but this is entirely different from arguing against its core aims. Slower progress, better systems and higher thresholds (starting at the VAT threshold of £85k turnover) would have given MTD for ITSA a smoother progress from MTD for VAT.

I specifically said that asking ""what is it for" is getting very boring" as those advocating those views offer as evidence the poor implementation. That's like arguing that there's no need for a rail network because the trains are run so badly.

Thanks (1)
Replying to charliecarne:
avatar
By BryanS1958
06th Dec 2022 10:57

I'm sorry Charlie, but "what is it for"? I have seen nothing worthwhile to prove that MTD ITSA will be useful (in comparison to the cost and inconvenience) for either HMRC or taxpayers.

What does HMRC intend to do with all the billions of transactions? HMRC cannot even cope with its current workload. What is the cost v benefit? How is it useful for a small business or landlord to have to file numerous returns each year? They have a bank account, they can see their financial position.

Then, of course, there is the environmental cost in terms of energy used to process and transport these billions of transactions, millions of e-mails, hundreds of thousands of reams of paper, etc.

Thanks (5)
Replying to charliecarne:
Morph
By kevinringer
05th Dec 2022 13:21

Charlie, HMRC need to get their digital house in order first. Look at all the manual worklists they use. It appears that every new HMRC system generates manual processes: the new VAT registration service change of legal entity being a good example whereas the old one was digital. HMRC cannot lecture us when they are undigitising.

Thanks (7)
Replying to charliecarne:
By ireallyshouldknowthisbut
06th Dec 2022 10:10

Charlie the point is we currently deal with this client annually in a matter of an hour or so.

We will then need to deal with them 5 times a year on short notice. With the best will in the world it will take a minimum of 15 minutes to contact the client, check the sales and file even a nil return. This is (at least) doubling the workload for zero benefit for the client and zero benefit for HMRC.

These cases matter to those individuals, and it matters to us if we have to double our fees [and by extension half the number of clients we can support]

Moreover if HMRC are cheeking in any way these submissions, it surely will get a massive "red flag" for the 3 nil submissions, kicked off a whole train of paperwork and enquiry? And if they are not looking at it, then what is the point?

I think it is imperative that accountants push back and debate these issues. If we stayed silent and lapped it all up the tax system would be much worse than it is now.

Moreover I think it absolutely right hat the core aims be held up for the pointless act that they are. it is proven that business records are OK via the failed business records check. Digitisation for larger clients where there is a benefit is more or less complete for any accountant who has not utterly failed their clients. All we are left with is business too small to be digitised (like my fireworks client) and those who have perfectly good accounting systems which are non-digital.

That is to say there is a vanishingly small number of businesses in the UK who should be on digital, but are not, and we are trying to argue this massive costly project which add a significant administrative burden to the whole UK economy, and will act as a big drag to advice lead services for accountants, is worth all the pain to all the business which are totally unsuitable just to get the small number of remaining businesses onto digital who should be there? And probably will get there by themselves. And if not, well quite frankly its their own time they are wasting not HMRC's.

I must admit to failing to understand what business it is of HMRC's how much time tax payers spend on record keeping.

Thanks (7)
Replying to ireallyshouldknowthisbut:
Morph
By kevinringer
06th Dec 2022 11:56

HMRC's concern should be: is the client paying the correct tax by the due date and has the client got supporting records? HMRC are under the illusion that MTD ITSA will somehow improve the accuracy, but there is no evidence to support it and indeed the existing SA enquiry regime seems to indicate the current ITSA is accurate enough.

Thanks (2)
Replying to charliecarne:
avatar
By NotAnAccountant2
07th Dec 2022 12:09

charliecarne wrote:

In the three quarters with nil transactions, it will take you 30 seconds a quarter to file the nil quarterly update in any software that you have that is MTD-compliant.

Absolutely nothing to do with accounting.

https://www.theguardian.com/commentisfree/2022/dec/07/28-years-leaving-n...

Now we have digital notes which, in theory, are a better idea; but in practice over the last five years I haven’t had a consistent room to work in with a computer. We “hot-desk” and have “clinic rooms” mostly without computers. So, in practice, I have to book time away from patients to log in to a computer, which takes at least 20 minutes each time to get in. The notes systems are clunky and unwieldy – it takes twice as long to do anything. The result is I’m seeing one fewer patient a day, for a start.

Thanks (1)
Replying to kevinringer:
By Nick Graves
05th Dec 2022 12:11

kevinringer wrote:

I have a client with just 1 transaction a year (annual rent on farm land) who will be MTD ITSA mandated. Currently their SA Tax Return is easy: 1x rental income and 1x property allowance. MTD ITSA will increase the complexity, time and cost. And for what benefit?

I suspect the "benefit" is connected to Central Bank Digital Currencies - transactions taxable until proven otherwise.

Quite what all this 'six returns in the first year' malarkey has to do with it is however, beyond me.

We can all see that without a drastic rationalisation of the tax code a priori, this insanity project will end in disaster. Words not used lightly...

Perhaps that IS the cunning plan..?

Thanks (2)
avatar
By User deleted
02nd Dec 2022 17:12

The can has been kicked so many times it's dinted all over. Just scrap the complete waste of time. Or if they want to save face, make it voluntary.

Thanks (23)
Replying to User deleted:
avatar
By djtax
05th Dec 2022 10:43

I think it is high time we spell out the basic home truth to Mr Harra - HMRC is currently not fit for purpose. Quite apart from the MTD fiasco much of HMRC basic admin has virtually stopped - with delays in replying to various claims and queries of up to 12 months apparently now 'accepted' as normal service!

Thanks (12)
avatar
By bluebaron
02nd Dec 2022 17:19

Will HMRC listen?! Raise the threshold, certainly delay it, preferably abandon it altogether.

Thanks (18)
avatar
By GHarr497688
02nd Dec 2022 18:18

Well I am absolutely fuming. This all kicked off in 2015 and I have worried and fretted since then. HMRC bullied everyone into MTDVAT and told me I was old and out of touch ( I am 61 with 23 years in Accountancy) . These young idiots at HMRC are so full of themselves with the awful attitude . I won't name names although Jim Harra well what person lacking in knowledge of reality. Now I have arranged to sell my clients and retire , I don't want to I feel forced too. If HMRC don't bring this in now almost 10 years after the planned dat then I don't know what.

Thanks (17)
Replying to GHarr497688:
By JCresswellTax
05th Dec 2022 10:22

With all due respect, worrying and fretting for 7 years about a potential tax change is absolutely insane!

Thanks (3)
Replying to GHarr497688:
By Nick Graves
05th Dec 2022 12:18

GHarr497688 wrote:

Well I am absolutely fuming. This all kicked off in 2015 and I have worried and fretted since then. HMRC bullied everyone into MTDVAT and told me I was old and out of touch ( I am 61 with 23 years in Accountancy) . These young idiots at HMRC are so full of themselves with the awful attitude . I won't name names although Jim Harra well what person lacking in knowledge of reality. Now I have arranged to sell my clients and retire , I don't want to I feel forced too. If HMRC don't bring this in now almost 10 years after the planned dat then I don't know what.

I feel like I'm 23 with 61 years in accountancy, due to this crapola. (It's actually 59 and 41, for those with no sense of wit).

I fully empathise with your position. I ought to do likewise, but I will not be told what to do by Uncivil Serpents. Plus I think I'll perversely relish in the schadenfreude when it all ends up big pants. So I might just stick around with my manure umbrella pointed at the impeller.

Thanks (1)
avatar
By Philysis
02nd Dec 2022 20:12

I never lose sleep over this pathetic idea, it will be scrapped eventually , it’s an idea by amateur unqualified bureaucrats who have no idea how the real world of tax is delivered by the sterling accounting pros . The current system ain’t broke, scrap your re invention of the wheel Whitehall and listen to the experts .

Thanks (19)
Replying to Philysis:
Tornado
By Tornado
05th Dec 2022 21:45

"scrap your re invention of the wheel Whitehall and listen to the experts ."

HMRC Development Team - "We have had a really great idea, we are going to re-invent the wheel and make it square."

Thanks (2)
Replying to Tornado:
avatar
By Hugo Fair
05th Dec 2022 23:49

"And it ticks all the boxes.
* Much more stable
* Easier to maintain
* Can be used by halfwits
* Environmentally friendly (because it precludes vehicles from moving).
Fails to deliver original objectives? You don't understand modern ways - get with it"!

Thanks (2)
Replying to Tornado:
Tornado
By Tornado
07th Dec 2022 12:25

Of course the important point about a square wheel is that it goes nowhere.

Thanks (2)
Replying to Tornado:
avatar
By NotAnAccountant2
07th Dec 2022 14:58

Tornado wrote:

Of course the important point about a square wheel is that it goes nowhere.

Surely the most important point is "what colour is it?"

Thanks (0)
Replying to NotAnAccountant2:
avatar
By johnjenkins
07th Dec 2022 15:11

My mate's got a square wheel, that goes all over his garden and changes colour every few years.

Thanks (0)
Tornado
By Tornado
02nd Dec 2022 21:31

Delay MTD, what a stupid idea.

It should scrapped altogther so that we can continue to use Self Assessment which works perfectly well and quite bizzarely will continue anyway whether MTD is there ot not!

Thanks (29)
avatar
By Open all hours
02nd Dec 2022 23:46

Sorry to bear bad news ABAB, but the MTD emperor has no clothes. Not a patch, not a thread, not a stitch.

Thanks (10)
By RALPH007
03rd Dec 2022 10:54

The Emperor has new clothes has an apt ring. The project has been flawed from day one. The software providers, the Treasury, HMRC have looked at this as a deterministic closed system. We live in a non deterministic world wherev closed systems cannot account for chaos theory ergo multivarious scenarios.

The idea that one show fits all is deeply flawed. The compliance costs to the business, accountants and government administration is far in excess of the net monetary gain to the Exchequer.

We should be educating our clients on instilling the need for proper and adequate accounting records and timely processing in line with the current self assessment system. Not adding Draconian compliance requirementsm To expect accountants to submit quarterly MTD returns is liken to the Mad Hatter's Tea Party. There IS no justification to implement a system which has no credence.

When the Treasury select committee some years ago asked HMRC what benefit there was to MTD SA the response, after much ado about nothing, was a net increase to the coffers to the Exchequer of the non material amount of less than 1 billion. A example of disengenuous diatribe.

Perhaps the government should consider looking at their accountability being deeply indebted, with a projected 100 billion in interest alone for fiscal year end 24. Without accounting for debt capital repayment and accelerating deficit funding.

The Road to serfdom has a history of overtly government tinkering and disparate and desperate measures, as Adam Smith stated in his magnum opus The Wealth of Nations, penury and Revolution occurs when the government taxes in excess of 50% unfortunately we are now beyond this critical juncture.

Thanks (8)
Replying to RALPH007:
By Nick Graves
05th Dec 2022 12:25

RALPH007 wrote:

The Emperor has new clothes has an apt ring. The project has been flawed from day one. The software providers, the Treasury, HMRC have looked at this as a deterministic closed system. We live in a non deterministic world wherev closed systems cannot account for chaos theory ergo multivarious scenarios.

The idea that one show fits all is deeply flawed. The compliance costs to the business, accountants and government administration is far in excess of the net monetary gain to the Exchequer.

We should be educating our clients on instilling the need for proper and adequate accounting records and timely processing in line with the current self assessment system. Not adding Draconian compliance requirementsm To expect accountants to submit quarterly MTD returns is liken to the Mad Hatter's Tea Party. There IS no justification to implement a system which has no credence.

When the Treasury select committee some years ago asked HMRC what benefit there was to MTD SA the response, after much ado about nothing, was a net increase to the coffers to the Exchequer of the non material amount of less than 1 billion. A example of disengenuous diatribe.

Perhaps the government should consider looking at their accountability being deeply indebted, with a projected 100 billion in interest alone for fiscal year end 24. Without accounting for debt capital repayment and accelerating deficit funding.

The Road to serfdom has a history of overtly government tinkering and disparate and desperate measures, as Adam Smith stated in his magnum opus The Wealth of Nations, penury and Revolution occurs when the government taxes in excess of 50% unfortunately we are now beyond this critical juncture.

Kudos for the subtle Friedrich Hayek reference.

IIRC, Gov't largesse is ~53% of GDP, so we can only spiral downwards.

Thanks (2)
avatar
By Refs1
03rd Dec 2022 16:20

How about just about improvement of the current system, that does work reasonably well.

Thanks (6)
Replying to Refs1:
avatar
By Jimess
03rd Dec 2022 17:52

HMRC time and money would be much better spent developing the information flow between HMRC and agent/taxpayer services accounts. You are absolutely right, the current self assessment system is on the whole working fine and delivers what the HMRC needs it to do - assess taxes. Whilst I agree that some taxpayer records have room for improvement, it doesn't mean to say that one size fits all and that they should be mandated on to software that is beyond the needs of some taxpayers, beyond the capabilities of taxpayers who are not familiar with bookkeeping systems or who struggle with IT, and incurs additional costs that most small businesses can ill afford. When self assessment was first launched in 1997/98 HMRC gave taxpayers a reduction in their tax bills over two or three years. This was to help with the costs of moving on to self assessment either by way of new IT kit or software to work with or the extra costs they would face using the services of an accountant to run self assessment for you. There has been no indication from HMRC that similar help will be given for MTD for ITSA, yet it will be far more costly to taxpayers. I had a conversation with an enquirant a few days ago and he said he would rather pay an accountant £300 (!) per year to submit his figures under MTD than do it himself, his assumption was a) that the fees would be £300, b) that the annual work would be neatly divvied up between the quarters and so it wouldn't cost any more than one annual fee, and c) that he could make one submission per quarter and one submission for the EOPS covering both his self employment and his twelve property rentals. By the time I had explained why his assumptions were incorrect, he was rather downhearted and said he hoped it would all go away! This was the first off the cuff enquiry I have had about MTD for ITSA, there is simply not enough information out there at the moment and it will be a big shock to many unrepresented taxpayers, I am sure of that.

Thanks (7)
Replying to Refs1:
avatar
By Crouchy
05th Dec 2022 16:00

exactly, if the end game is quarterly payments, that is surely easily implemented under the current SA system

Mad that we'll have MTD and SA in place

Thanks (5)
By SteveHa
04th Dec 2022 23:34

Quote:
highlighted positive conversations with HMRC about prompts and nudges and the tax department’s intention to work with accounting tech providers

But NOT with accountants and tax advisors. Go figure, HMRC want to pander to tech providers without asking those at ground zero.

Thanks (8)
Morph
By kevinringer
05th Dec 2022 09:55

HMRC's Helplines are have been closed since Friday due to "technical reasons". HMRC's inability to keep their phonelines open is proof of their incompetency and their inability to roll out MTD ITSA.

Thanks (7)
avatar
By johnjenkins
05th Dec 2022 09:58

I read this report with great interest and the point that was missed by the Board was that MTDITSA should either be destroyed in its entirety or at least QU scrapped. This prolonging for another year will not ease the administration burdens on the SE earning between £10k and £85k. It's just like the "working together" rubbish. You can only make comments on "how to Implement better". Sad.

Thanks (5)
avatar
By Ian McTernan CTA
05th Dec 2022 10:02

HMRC need to move away from this idea they have (seemingly encouraged by others) that taxpayers have any interest in having their own 'personal account' 'tax account' or anything else for that matter, and will happily refer to it.

Most have zero interest in having a Govt gateway account- and those that do have one frequently lose the details.

As for having to submit corrections to the original quarter's report, utterly impractical- even VAT reporting isn't that dumb.

These 'influential' people need to stand up and lay it down to HMRC and stop pandering.

Thanks (12)
Replying to Ian McTernan CTA:
avatar
By Yossarian
05th Dec 2022 13:32

Ian McTernan CTA wrote:

HMRC need to move away from this idea they have (seemingly encouraged by others) that taxpayers have any interest in having their own 'personal account' 'tax account' or anything else for that matter, and will happily refer to it.

Most have zero interest in having a Govt gateway account- and those that do have one frequently lose the details.

As for having to submit corrections to the original quarter's report, utterly impractical- even VAT reporting isn't that dumb.

These 'influential' people need to stand up and lay it down to HMRC and stop pandering.

My son has a personal tax account and thinks its great. Not really for the reasons HMRC might hope for though. His employer is slow at handing out payslips and my lad and his colleagues have realised that they can find out early how much their overtime is going to be by logging into their personal tax accounts and looking at the RTI submission from their employer a few days before they get paid!

Thanks (2)
Morph
By kevinringer
05th Dec 2022 10:09

"It is even worse for the 278,000 sole traders and partners who will have to apportion two years’ results will have to use estimates for the second year rather than actual figures."

278,000 is a significant number of taxpayers. How can HMRC even consider introducing something that will replace existing certainty with uncertainty for hundreds of thousands of businesses? How can this be considered a simplification or improvement? It shows you how little HMRC actually understands about tax. And don't forget, despite what HMRC say, basis period reform has nothing to do with MTD ITSA.

Thanks (6)
paddle steamer
By DJKL
05th Dec 2022 10:13

Well, it seems destiny is being kind to me , a nudge from April 2024 to April 2025 means all I really now need is one more delay taking things to April 2026 and I will totally avoid the plunge into this Heart of Darkness and "the horror the horror".

Thanks (5)
avatar
By C J EYRE
05th Dec 2022 10:13

Looking at the programmes available for MTD, why do so many only work via bank transactions. Up north we still work in real money - cash.

If they are really intent on bringing in the system, why not start at £85000 and reduce that figure by £10000 each year. Hopefully this would help the Revenue and accountants to work on it successfully.

At the moment, I am still waiting for the Revenue to process five Tax Returns I have submitted, going back to June, two with Tax Refunds owing to my clients So, what chance have we got with MTD returns.

Thanks (7)
avatar
By Yossarian
05th Dec 2022 10:15

The pet-project of a long gone former chancellor. Far more would have been achieved, and at a much lower cost, by just allowing people to pay their SA bills by direct debit in monthly instalments. Anyone who seriously thinks that the tax gap can be closed by forcing people to use software has clearly never seen the total c**p that some clients post on their software.

Thanks (9)
Replying to Yossarian:
By ireallyshouldknowthisbut
05th Dec 2022 10:45

if they want tax in quicker, pay interest on it like with CT.

Most small business would then put aside their tax with HMRC and not their bank.

Simple solutions like that are not allowed as they cant sell expensive software.

Thanks (2)
Replying to ireallyshouldknowthisbut:
avatar
By Latinaid
07th Dec 2022 08:37

I thought they did pay interest, though not as high a rate as banks

Thanks (0)
Morph
By kevinringer
05th Dec 2022 10:19

"ABAB welcomed the tax calculation functionality although questioned its usefulness for anyone with complicated affairs"

Wrong, the tax calculation functionality won't be of any use to anyone because it will only generate a meaningful result after the EOPS which is the 5th MTD submission of the year. The first quarter submission will result in a calculation assuming the first quarter is the only income for the year. That's a big fail. Even by the fourth quarterly filing when all income is declared, the capital allowances and accounting adjustments are not put in until the EOPS which is not likely to be submitted until later in the year: the exact same time that the SA TR would have been done. Currently taxpayers know they have to wait for their SA TR to learn of their final tax liability. With MTD ITSA changing the tax calculation at numerous points during the year, we are going to have to explain to them numerous times why their tax bill keeps changing and why it is increasing as the year progresses. That will not only waste our time, but will be a real disincentive to work for the taxpayers. It's ludicrous.

Thanks (5)
Replying to kevinringer:
By ireallyshouldknowthisbut
05th Dec 2022 10:47

You cant expect HMRC to realise what a business looks like quarter to quarter on a cash basis. ie all over the place.

Accountants know, but we are not consulted. Experts in nano-businesses are not relevant you just have to BELIEVE that digital is best, and never ever question the central assumption or you might look like you are old and out of date. That seems to be the tact being taken here by senior people afraid of looking like a dinosaur.

Thanks (3)
Replying to kevinringer:
avatar
By Moo
05th Dec 2022 14:07

Bank interest, dividend income, pension contributions, gifts of covenant, to name but a few of the common adjustments that would make the quarterly tax figure nonsense and then of course there could be the salaried day job too.

Thanks (1)

Pages