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HMRC’s Giles McCallum on the purpose of MTD

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Giles McCallum, the director of Making Tax Digital, sets out HMRC’s vision for MTD and the benefits it will bring to the tax system.

19th Oct 2021
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Two things are key with Making Tax Digital (MTD): the first is that we must deliver an Income Tax Self-Assessment (ITSA) service centred around the end user – be that a taxpayer, an accountant or a bookkeeper.

Secondly, MTD should be a catalyst to drive up wider digital adoption by businesses, the self-employed and landlords, which I know will bring benefits to both the tax system and the way business operates. MTD is but the first building block of wider tax digitalisation and simplification in HMRC.

I also understand that not everyone will find the transition to digital easy. I’ve heard from those in the vanguard of digital adoption urging us to move further and faster. But I’ve also heard from those apprehensive, or indeed reluctant, about moving from paper-based processes to digital and from a single end of year submission to quarterly reporting.

Not everyone is ready to make this move just yet. That’s why the Financial Secretary to the Treasury (FST) announced the new date for the mandation of MTD ITSA, of April 2024. This will ensure we move at a pace which meets the needs of the full range of businesses and agents who will have to adopt new processes, while also ensuring that more customers have the opportunity to fully test the system by participating in the pilot.

Costs of complying

As part of the FST’s announcement, we also released our estimate of the likely costs of complying with MTD ITSA. These estimates were produced following a period of consultation with stakeholders, including business and accountancy representative bodies, testing our assumptions and gathering feedback to ensure that they reflected the likely range of experiences that different business types could expect.

Some of those who worry about the costs might reasonably ask why small businesses should have to bother with MTD at all. My view is clear. While there are costs involved, particularly in the transitional period, we expect businesses to experience benefits in the longer term, through wider digitalisation, additional resilience and time saved on administration.

Software options

The government thought long and hard about whether to produce a basic ‘one size fits all’ piece of software to use, or whether the software market was better placed to provide these solutions. We believe software suppliers will deliver products that work best for taxpayers. Facilitating a software market means a range of options will be available, so that software which does more for your business is available, whether that be tying in with bank feeds, business management tools or increased automation. So, our job now is to help develop a software market that provides for the breadth of different business needs. It will be able to do this far quicker than HMRC, and with a greater focus on continuous improvement as a result of market pressures.

For there to be a smooth transition to a more digital way of doing tax, we also believe that those with the most straightforward affairs should be able to choose a product to use which is free of charge, something we are working with the software industry to ensure is in place.

Moving to a quarterly rhythm

Alongside digitalisation one thing that some stakeholders want to understand is what drives the need to move to a quarterly rhythm of sending updates to HMRC. I want to be clear that these updates are not tax returns. They will just be a simple summary of income and expenditure drawn from the digital records you are already keeping, without the need for lots of reworking. Adjustments for tax purposes are made in an end of period statement at the end of the year and may be used to correct any inaccuracies in quarterly updates.

The core purpose behind quarterly updates is to bring record keeping more up-to-date. When a business keeps paper receipts throughout the year, the information in the resulting tax return is often incomplete and inaccurate. Receipts may have gone missing or simply a business may not remember the context of an expense. Keeping more up-to-date records will reduce those errors and give a better indication of how the business is performing.

Time to prepare

We continue to communicate with businesses and agents to raise awareness of these changes. It is vital that not only do they understand what will be required of them, but also that they are reassured that for the vast majority, this will be a fairly straightforward transition. It will bring their interaction with the tax system up-to-date and more in line with what they come to expect from the other digital services they rely on to run their business, as well as in their day-to-day lives.

The emerging evidence from our experience of MTD for VAT is that MTD is working as intended. It is cutting down on errors, making tax management easier to get right for businesses, and bringing more money into the Exchequer, which can be spent on our vital public services.

Now that we have additional time to prepare for MTD ITSA, HMRC is redoubling our efforts to take full advantage. We will work closely with businesses, agents and software suppliers to ensure we get this right and deliver a digital tax service fit for the 21st century.

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Hear from HMRC at AccountingWEB Live Expo 

Giles McCallum, along with HMRC’s chief executive Jim Harra and other HMRC representatives, will be speaking at AccountingWEB Live Expo on 1-2 December. This will be your chance to to put your questions to HMRC. Register to attend the event by clicking the link below.

Replies (228)

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Replying to colinstewart:
Tornado
By Tornado
20th Oct 2021 13:49

Forget HMRC. It is bit like Triggers broom where as an entity it looks the same most of the time but underneath it changes on a daily basis and thus has no lasting integrity. You will not, therefore, make much of a dent by yourself in the way that it operates but it does have some weak points that can be targetted.

The very nature of being in practice as an Accountant, Tax Adviser or myriad other associated services is that we mainly deal with the Owners, Directors or other Executive Decision Makers in businesses. Whether they are big or small enterprises, we are working with them, have their trust and have a good insight as to how businesses of all kinds operate, what their needs are and how we can help them.

We are, therefore, of great consequence and have more worth than HMRC seem to acknowledge and if we don't think something is right, we really can make a difference in many ways.

YOU are therefore of more consequence than you appear to think and have probably already influenced your clients about many matters, including MTD.

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By Articled Clerk
20th Oct 2021 12:42

I hope Giles Mc Callum will take the time to take note of the concerns raised in these responses and realise that all of this needs a rethink if it is going to work. Self-assessment will be 25 years old next year and should be celebrated (possibly with street parties?) as the only real workable system that has been developed to date! The run up to self-assessment included taxpayer education/awareness, which HMRC does not seem to be factoring into MTD; how does he propose to "reach out" to those unrepresented taxpayers who have been able to manage their own tax affairs up to now? HMRC have for years referred to taxpayers as "customers", if this is the case then it should listen to the age old mantra that the "customer is always right" and take on board the severe reservations that exist over this project. Finally, the open-necked shirt image suggests that Giles' post may have been made prior to having to rush off for a round of golf!

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By adjadj
20th Oct 2021 12:57

It is all well and good complaining on this forum but HMRC will just ignore it as usual and nothing will be achieved.

I suggest that people raise FOI requests about anything that concerns them. This will force HMRC to provide some sort of response. My suggestions are
- what analysis was done on the effect of making all businesses conform to the same calendar and then imposing a 30 day deadline so all work if focused on 4 key months?
- how is the £6 additional cost derived?
- how was the additional effort of submitting 5 returns a year instead of the single return costed
- I am sure there are many more

FOI requests will HMRC will be forced to put information / refusals to reply into the public domain. This information can be analysed and used as evidence for the need for a change in approach/reporting threshold

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By DavidAWilks
20th Oct 2021 13:47

Dear Giles

Have you sent out this article to each and every taxpayer? None of my clients have any idea of what is to come because of the lack of transparency shown towards them by HMRC.
I suggest before you go any further you do so, just to see what the reaction is from the shop floor.
I have no doubt, although I certainly would not encourage it, that the black economy will grow and grow.
If you do decide to "come clean" with the taxpayer I suggest you invest in an efficient hard hat. Although, having said that, you probably won't need one as you will have moved on elsewhere having lit the blue touchpaper.
All the best,
Me

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Replying to DavidAWilks:
Tornado
By Tornado
20th Oct 2021 13:59

'Although, having said that, you probably won't need one as you will have moved on elsewhere having lit the blue touchpaper.'

Like David Gaulke who seemed to think that the Tax Return was some sort of horror (when it is not) and used this false impression to promote MTD. He moved on a long time ago leaving this mess behind him but his words can still be read -

https://www.thisismoney.co.uk/money/comment/article-3414649/DAVID-GAUKE-...

Read and smile or puke as you wish

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Replying to Tornado:
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By johnjenkins
20th Oct 2021 14:08

Perhaps if we had remained in the EU he might have got rid of MTD.

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By 0620115
20th Oct 2021 13:59

So glad I retired last year and no longer a problem I will have to deal with. I have always been of the view that if a client wants to write up their records on parchment with a quill pen that's fine.

For what it's worth my take on MTD is it does make sense if the software:
- can pick up on errors and ensure that income, expenditure and balance sheet items end up in the correct headings. AI is getting better all the time and I have little doubt the software will resolve this problem eventually, eliminating errors like drawings in wages etc.
- will deal with all the tax returns and tax calculations with the AI eliminating any significant errors.

The problem is that currently few clients (especially the smaller ones) have the time or resources to get to grips with the software and most accounting software doesn't deal with the annual tax returns. All this means that accountants will be faced with having to spend a huge amount of time trying to get their clients using software and getting the quarterly submissions in on time- in addition to the annual submission. I think it was Jon Griffey who said it will be January 4 times a year. I have no doubt that it will get sorted in the end at great cost to businesses and accountants - with much grief and lots of penalties. The "icing on the cake" will be when Xero, Quickbooks, Sage etc. include all the tax return and accounts submissions within the software (for submission to HMRC and Companies House) which will leave accountants with no or much less work. Perhaps that is really want HMRC are aiming for - remove the accountant from the tax return process altogether?
I also have no doubt that the software will rapidly increase in price as MTD becomes established, software becomes more sophisticated and the software market consolidates.
As I said not my problem..................

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By johnjenkins
20th Oct 2021 14:01

What Giles doesn't realise is that you cannot turn low techies into high techies in a matter of a few years. There are still many people who do not nor do they want to drive. So why should MTD be mandatory. The figures HMRC get will still be the same to work out the tax liability. Most Accountants who prepare accounts and tax computations do it digitally. So Giles, if you don't change the way the tax liability is worked out, there simply is no point in mandatory MTD.

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By Moira O'Brien
20th Oct 2021 14:38

I understood that the tax take under MTD for VAT has resulted in less tax collected not more.

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Replying to Moira O'Brien:
RLI
By lionofludesch
20th Oct 2021 15:50

Moira O'Brien wrote:

I understood that the tax take under MTD for VAT has resulted in less tax collected not more.


Ah - but there were less errors.
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RLI
By lionofludesch
20th Oct 2021 14:43

Giles - when you can get your organisation to reply to a letter inside a month, instead of the current fourifyourelucky, you'll have the right to impose deadlines on taxpayers.

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By BryanS1958
20th Oct 2021 14:50

La La Land comes to mind........

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By Mr J Andrews
20th Oct 2021 15:05

Giles - You certainly know how to wind people up. But that's what indoctrination does for poor souls.

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By Homeworker
20th Oct 2021 15:19

I have huge concerns about the number of older people who are landlords but will be unable to cope with these requirements. In our practice we have many landlord clients, including one elderly client who has commercial lettings and so was required to register for MTD for VAT but does not even own a computer (he keeps perfectly good records on paper). We failed to get exemption for him, although he subsequently managed to persuade HMRC himself to exempt him. How are the hundreds, if not more, of digitally excluded taxpayers going to be able to get exemption?
I am also concerned that smaller accountants such as ourselves will not have the resources to cope with the extra work and will retire (as I will) or reduce their client base, so that the smaller clients will find it harder to get help at a reasonable cost.
As a volunteer for the Tax Help charity I suspect that Tax Help will be receiving many more calls for help when this comes in.

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By sammerchant
20th Oct 2021 16:21

What Giles fails to address is the threshold which is set at £10,000. This is totally unrealistic, seen in the light of the current facility to submit short Self-Employment pages for those whose turnover is below the VAT registration threshold.
The second is that the figures, if taken from the bank statements, will be those of simply receipts and payments, and for those who prepare 'proper' accounts (not on a cash basis) will be quite meaningless.
The third is that very many sole traders do not operate a separate business account - this way they avoid bank charges and can see their available cash immediately.
The fourth is that the year-end adjustments (capital allowances, accruals and prepayments, bad debts etc) can never be known at the outset, and, until these are made and put through, the figures are irrelevant and misleading.

With the proposed change of accounting dates, I expect this is just the preliminary to quarterly payments on account for all. Getting back overpaid tax will become even more of a problem than it is now.

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By Open all hours
20th Oct 2021 16:33

Having watched the recording of this mornings AWeb Live I was struck by the authoritarian tone set.

It is unpleasant, dictatorial and unnecessary. Some of my clients would be very upset to be spoken to in such a way and although the comments were aimed at us fellow professionals we are representing our clients interests.

Hectoring those of us who would like to work towards something which could be sold in a positive way is not going to get the best out of us.

Mr McCullan would do well to respond calmly to some of the many valid points made among these replies. It is not good enough to write and run.

There is enough conflict in the world and clear communication between HMRC and those of us who deal with small businesses every day would reduce some of this growing tension.

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Replying to Open all hours:
Tornado
By Tornado
20th Oct 2021 18:16

It is the sole responsibility of HMRC to deliver MTD, not ours. They have been paid handsomely to do this whereas we have been given nothing at all and no incentives to help.

It is hardly surprising that HMRC are getting 'Dictatorial' as the realisation that this project is going to fail starts to dawn on them and panic sets in.

If HMRC choose not to co-operate with the profession, then they do this at their own risk.

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By Charlie Carne
20th Oct 2021 17:18

Giles McCallum wrote:

Moving to a quarterly rhythm
Alongside digitalisation one thing that some stakeholders want to understand is what drives the need to move to a quarterly rhythm of sending updates to HMRC. I want to be clear that these updates are not tax returns. They will just be a simple summary of income and expenditure drawn from the digital records you are already keeping, without the need for lots of reworking. Adjustments for tax purposes are made in an end of period statement at the end of the year and may be used to correct any inaccuracies in quarterly updates.

The core purpose behind quarterly updates is to bring record keeping more up-to-date. When a business keeps paper receipts throughout the year, the information in the resulting tax return is often incomplete and inaccurate. Receipts may have gone missing or simply a business may not remember the context of an expense. Keeping more up-to-date records will reduce those errors and give a better indication of how the business is performing.

I applaud the aim of MTD to "drive up wider digital adoption" and, if the aim of quarterly reporting is truly only to "bring record keeping more up-to-date", then the quarterly workload should not be too onerous, so long as HMRC provide confirmation and guidance that any inaccuracies in the quarterly updates will not be penalised.

There will be significant work involved in migrating some of our clients to a digital platform but this could be relatively painless for the smaller clients if we were able to simply move them to a bank account that incorporated MTD filing, such as Countingup (and I believe that other banks will soon offer a similar feature). If our £10k pa trader or landlord had all of his income paid into (and most of his expenses paid out of) such an MTD-compliant bank that could file directly with HMRC each quarter, would they be compliant if they did not do any further work in-year, but left the accountants to do as we do now, whereby we review that bank account only once per annum and make all adjustments then?

If HMRC made it clear that penalties would only be levied if the taxpayer made no attempt to use an MTD-compliant bank account (or an MTD software solution with direct links to a bank account) for the bulk of their income and expenditure and that mis-codings and omissions in the quarterly updates were not to be penalised, then this might go a long way to assuaging some of the anger and resentment from the profession. Of course, once we have our clients on cloud-based systems, it will become easier for us to start coding and reconciling the data long before the year-end, as this is much easier in a cloud environment than in a non-digital environment, where work done one quarter may need to be partially re-visited the next quarter due to overlaps and omissions etc (items that cloud software handles automatically for us). But this will not always be the case, especially for smaller clients where an entire year's transactions can be processed in perhaps an hour or less, but a quarter cannot be done in 15 minutes.

If HMRC expect us to review the data in any detail each quarter, we will be unable to cope with the volume of work within the tight time-frame set for filing each quarter. HMRC have said that "they do not include the time the agent will spend checking quarterly submissions as an additional cost as HMRC believes the need to submit quarterly spreads the cost of checking over the year but does not increase it". The problem with this assumption is that, for smaller clients, it is much quicker to review an entire year's transactions and ask the client to explain unknown items all at once than it is to do this on one quarter of the transactions four times per annum. We might, for example, sort an exported set of bank data for a whole year and code all items with the same payee name in one go. If we had to do this four times a year on one quarter of the overall data, it would take four times as long. HMRC have not taken into account the fact that automation can process many items at once (and takes no longer whether the data set is large or small) but that we need to re-do that process each time a new set of data is presented. There may be some mitigation if we use software that allows rules to be set up, but this isn't always applicable for certain transactions for which a rule might be complicated to create and for which it is much quicker to code similar transactions together, rather than to formulate a complex rule for the future.

My question to Giles McCallum is, therefore, how much work does HMRC expect to be done to the raw banking (and sales invoicing, where applicable) data? Is the purpose of quarterly filing simply to prove to HMRC on a regular basis that they are being MTD-compliant in-year and not leaving it all until the year-end? Can we just link up the software for our clients, ensure that they use that linked bank and then ignore the accuracy of the content until we perform our annual work? Because that would achieve his stated aim that the "core purpose behind quarterly updates is to bring record keeping more up-to-date".

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By Stalytax
20th Oct 2021 16:53

We all know how stressful 31 January can be, especially when the usual suspects turn up at the very last minute, just when you think you have done them all. They always apologise and promise to bring the records earlier next year, until of course they don't.

If Giles thinks I'm going to do this an extra 4 times a year (especially at £6 a pop!) he can think again. As a one man band, I haven't the time or the enthusiasm to chase everybody for records an extra four times a year, but if I don't I can guess who'll get blamed for late submissions ('why didn't you remind me?'), and those usual suspects will keep getting penalties. Some I know will never digitize, or even own a smartphone or computer (although laptops only cost £200 now, according to HMRC's figures), so I'll be keying in the information as well. At least I can rub my hands over getting as much as six whole pounds for my trouble, I'll try not to spend it all at once. Maybe when he's finished his nationwide tour of AccountingWeb members Giles can pop by and show me how simple it all is really.

My clients aren't necessarily bookkeepers by trade (but hey, I can't weld or build a wall straight) and some find it hard enough to bring me the right year's bag of receipts, so I hold out no hope of them emailing me up to date spreadsheets or summaries, let alone bring me the right quarter's scraps of paper on time. The last day before the deadline, maybe.

At present my retirement date is set for 31/3/24, but I'm not updating my website or formally telling my clients to go elsewhere until I am convinced HMRC have made their final U turn on the matter - George Osborne announced the 'death of the tax return' in the budget of 2015!

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By Agutter Accounts
20th Oct 2021 18:48

This programme would be a lot more credible if the threshold was £85k like MTD for VAT. The system has far too many different rates and thresholds.

Forcing people to go digital is a forlorn hope. Small businesses are far too busy to earn a living to care much about that.

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By Catherine Newman
20th Oct 2021 18:52

For the record Giles, I and several other AW members attended the HoLTreasury Select Committee meeting re MTD VAT. It was an amazing experience and the HoL wrote a damning report. GDPR prohibits telling me who they are.

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By fmuk
20th Oct 2021 19:23

MTD – the theory is great, let’s make everything digital, scan all invoices/receipts, a paperless online digital bookkeeping/accounts system society. I’m all for it, makes our job much easier, tidier to deal with.

However, let’s just think this through:

Even if, if you could get all clients to engage, you’re missing the point. All clients are not capable of running these online systems themselves. Yes, the bank feeds go into the system automatically, but the transactions still require analysing or categorising using the correct terminology.

We now have dozens of clients using digital systems (QuickBooks, Xero, Free Agent & others) and actively encourage it, but I would say only circa 5% of them are able to correctly analyse/categorise their own data. This will never change, as regular tradespeople cannot be expected to not only be fully trained to use these systems but to know what’s claimable against tax, what’s capital etc, etc. We as accountants still must go through the trial balance and nominal ledgers, correcting entries, taking out all bogus expenses. You would be amazed at what people put down as an expense, from HP payments for their assets, payments to HMRC for VAT, PAYE, Tax, not to mention the laughable one’s like the washing machine, home furniture, dog food, hairdressers, home CCTV, Sky TV etc, etc, etc. I always remember back in my apprenticeship days, when the boss used to say, you need to be a detective when analysing each client’s records, as they will try to claim for all but the kitchen sink. This wasn’t actually true, as I have seen more than one kitchen sink being claimed since.

One example I have come across today is a guy who has spent 30 years in IT, so knows his way around computer systems and appeared to be flying when he started on QuickBooks with his new business, a convenience store. Literally just looking through it now and he has duplicated many of his purchases, by first entering the invoice (scanned into the system) as purchases, all good, but then when the payment has come out of the bank, he has entered this as an expense to purchases, instead of matching the payment to the invoice. This is a clever guy, making a simple mistake, overstating his purchase by thousands.

If figures had to go in quarterly, me and my team wouldn’t have time to go through every client’s digital data making corrections, it would have to be submitted as it was. There wouldn’t be time at the end of the year to look at it properly either if there is to be a quarterly cycle going on. It would just be a conveyor belt submitting quarterly figures after quarterly figures. All proper accounting gone out of the window.

HMRC would lose out big time on overstated expense claims and lower tax revenues.

The cost of the 4/5 times a year conveyor belt being exorbitant to clients, in addition to being beholden to one of the software providers who will continue to increase their prices.

If you want to move to a ‘Quarterly Rhythm’, take the information from the VAT Returns, already submitted through MTD. Leave the small business to get the proper help and support they require from us.

Agree with all my fellow practitioners who have invited Mr McCallum (‘Director of MTD HMRC’) to come and investigate the real world. It’s open for all to see, how deluded he is.

From a small business accountant with circa 350 clients and many small sole traders.

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Replying to fmuk:
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By Catherine Newman
20th Oct 2021 19:15

This sums up the situation perfectly.

One of my clients has given up trying and has sent me the bank statements weekly. He has put through his actual transactions on Quickbooks weekly and I follow the bank. The relationship has improved no end.

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By SteveHa
21st Oct 2021 08:43

I've used the example before, and I'll use it again. Window cleaners are by and large cash based business conducted up a ladder.

How in the name of Satan are they supposed to maintain digital records?

And that's just one example.

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Replying to SteveHa:
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By Latinaid
21st Oct 2021 10:18

Totally agree. I do the books for quite a few window cleaners. I set them up with an excellent system - they have an A4 diary with a page per day; they write their income at the top of the page and expenses at the bottom. Some of them add it up at the end of each month, if they want to know the monthly figures; others just hand me the book at the end of the tax year. It takes very little time for me to get the annual figures sorted. In fact the trickiest part of the process is liaising with client to hand over the physical book.

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Replying to Latinaid:
By Charlie Carne
21st Oct 2021 11:03

But this is exactly the sort of example of a small business that would benefit from digitalisation. Your average domestic window cleaner does not need a system as sophisticated as QBO or Xero, but a simple and cheap app on his smartphone could lay out the information in a similar manner to the A4 diary. He'd complete his daily records in the same way as now, just in an app rather than on paper. You could see the data in-year and potentially advise on issues that arise in real time, such as foreseeing whether your larger window cleaners (perhaps with sub-contracted cleaners working for them, as my window cleaner now does) are approaching the VAT registration threshold, etc. Even if you didn't look at the data until after the year-end, you wouldn't have the problem of "liaising with client to hand over the physical book".

You'd also be able to complete his annual tax return (or the new name for this under MTD), as the app would add up all 260 working days of data for you, saving you some time. The window cleaner could click a button in the app to file quarterly updates without needing your input, as HMRC have said that inaccuracies can be corrected after the year-end.

I don't know of any simple apps that can do this yet and I hope that some will be launched in the next 18 months, but the goal of digitalisation seems worthwhile to me (so long as there continue to be exemptions for those who truly cannot use computers or apps or have no internet access).

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Replying to charliecarne:
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By Latinaid
21st Oct 2021 11:53

charliecarne wrote:

I don't know of any simple apps that can do this yet .

I think that's the issue, isn't it? I agree, it could work well (as long as all the client has to do is input, not actually categorise in any way). And of course, there would still need to be adjustments for the items (eg.personal expenses) which they've input incorrectly (these can easily be ignored when using the diary system).

The problem is that at the moment, ads for QB and the like are giving the impression that it's really easy-peasy. So if the window cleaner is happily snapping all his receipts, that will include the receipt with the packet of [***] or the Yorkie which he buys when he puts £20.01 fuel into his van. At the moment, he just writes £20.01 into the diary - using QB, I'd have to check the image to deduct the personal aspect.

And then of course, there are the clients who don't know one end of a receipt from the other. Some of my clients with dyslexia and dyscalculia (seems like I specialise in them!) can't sequence dates and have a real fear of figures - they just want to hand it all over to someone else to deal with.

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Replying to Latinaid:
Tornado
By Tornado
21st Oct 2021 12:17

Perhaps we are trying to be too professional.

HMRC don't readily acknowledge that Accountants do spend a vast amount of time correcting errors in accounting records that clients have produced but perhaps we should just go with the flow and think along the same lines as HMRC and accept that our clients are perfectly capable of using Accounting software (because the software developers say it is easy to do) and can competently allocate income, expenditure, assets and liabilities correctly. We can then then just compile Accounts from the client's records and attach a report that says we have done nothing and take no responsibility for the figures, and job done.

I get the feeling that HMRC would be happy with this or even to bypass the Accountant altogether. This would make MTD a resounding success ........ wouldn't it?

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Replying to Tornado:
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By Catherine Newman
21st Oct 2021 12:52

There's a thought.

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Replying to Catherine Newman:
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By 4b4
22nd Oct 2021 10:14

Ah - and now we're back to penalty farming again!

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Replying to Catherine Newman:
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By 4b4
22nd Oct 2021 10:14

Ah - and now we're back to penalty farming again!

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Replying to Latinaid:
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By lh3f9764bg1g
22nd Oct 2021 13:57

Then there's the one who has the dates formatted in U.S. style. Or the one who puts dates in as text. Or the one who decides that a formula would be a handy way of working out the amount of VAT on all invoices (not that she/he'd be any worse than most of the software houses as it seems they mostly use formulae to calculate the VAT amount rather than force the user to actually type the VAT in themselves).

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By Catherine Newman
21st Oct 2021 09:11

Have just looked at the system to check the progress of an amended return filed yesterday afternoon. The system is as at yesterday. If you want to prove your processes are up to it, make them in real time. It takes several days for a payment to show up.

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Replying to Catherine Newman:
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By Agutter Accounts
21st Oct 2021 09:25

Yes, the online PAYE system has long been a law unto itself. Their methods of accounting are bizarre and old-fashioned to say the least.

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By Tornado
21st Oct 2021 09:44

Trying to advise clients of what their current tax liabilities are based on HMRC Statements requires a University Degree and a spare day or two to interpret. If these statements were presented in a Bank Style where it is much easier to establish a total amount outstanding on a particular date which does not change then it would be easy but HMRC manipulate information in such a way that there is no history and a statement downloaded on one day will be completely different to one downloaded a few days earlier or later.

If this is an example of the information that will come out of MTD then it will be worse than I initially imagined. MTD is far to complex for the average person and all this guff about people having a better understanding of their tax liabilities earlier is just plain fantasy.

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By johnjenkins
21st Oct 2021 09:52

Apart from Brexit I would think MTD has created more posts on this site than all the rest put together. Now that tells you something. HMRC are you listening.

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By Agutter Accounts
21st Oct 2021 10:01

Ah! The triumph of hope over expectation.

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By Michael C Feltham
21st Oct 2021 11:51

johnjenkins wrote:

Apart from Brexit I would think MTD has created more posts on this site than all the rest put together. Now that tells you something. HMRC are you listening.

Err...Nope!

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By Agutter Accounts
21st Oct 2021 09:54

I agree MTD for ITSA is a step in the wrong direction. I produce accounts for clients in a form they can understand including a tax calculation which I synchronise with the HMRC system. I have found this works well. Quarterly statements will not help in most cases predict year end outturns. As a management accountant I know even to try that requires a lot more effort than HMRC is prepared to acknowledge.

Our tax system is run by muppets, but the true culprits are politicians who are hard-wired into playing to the gallery, especially the present lot.

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By johnjenkins
21st Oct 2021 10:17

Up to SA in 1996/97 HMRC weren't too bad and things flowed. Then in May 1997 Gordon Brown took over and it's been a steady downhill slide ever since. This is nothing to do with politicians, it is a mindset at HMRC introduced by GB (ok yes he was a politician but a law unto himself). In order to get anywhere with HMRC that mindset has to change. I'm hoping that all this palaver with MTD might just do that.

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By Agutter Accounts
21st Oct 2021 10:27

Well, it's politicians who pass the Finance Acts, so that is where the buck stops as far as I am concerned.

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By Michael C Feltham
21st Oct 2021 12:01

Brown was an historian and later a lecturer in politics at a Glasgow further education college and thereafter a TV journalist.

His knowledge of finance, accountancy and management were and remain zip.

He is the prototypical exemplar of an utterly incompetent person placed in charge of a critical position in terms of running a nation state.

And the result was, err, history; pun intended!

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By johnjenkins
21st Oct 2021 12:13

From what I can gather about "new labour" GB was supposed to be PM not TB.

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By Michael C Feltham
21st Oct 2021 14:42

Well, John.
Labour's leader was of course a very good man and he could have achieved much.

So sadly, he passed away; and BLiar swept into power.

I had high hopes of and for John Smith.

Interestingly, I was tasked with assisting a group who had a righteous cause of employment and unfair dismissal and asked me to represent them at an Employment Appeal hearing. Through then City contacts, I arranged a meeting, in chambers with one Cherie Booth (Then in Sir Gordon Borries's chambers: he had previously been head of OFT - and a right fist he made of that appointment!). I digress.

We met Cherie and towards the end of the meeting she stated "When WE are in power we are going to change all this!".

Employment Rights Act, i.e.

Was it changed for the better? Err, no.

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By Agutter Accounts
21st Oct 2021 14:58

The best we got was the European Social Chapter, but that came with important opt outs so was rather less use than it might have been.

Blair's government finally cured me of any idea that politics in Britain achieves anything much. For me Brexit was the last straw, an idea with no structure or substance, just a load of fatuous three word slogans.

Now I keep a low profile and just help clients to stay out of trouble as best I can. When you see your taxes spent on useless cronies you just despair of the future.

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By johnjenkins
21st Oct 2021 16:06

Brexit wasn't supposed to be a structured idea. It was supposed to get out of an ideology that would never have worked, as can be seen now. The EU is past its sell by date and has no future in its present form.

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By Agutter Accounts
21st Oct 2021 16:22

On Brexit we must agree to differ. The EU will outlive the so-called "United" Kingdom. from people I talk to who live in Europe many of them say "good riddance" to a Britain that was arrogant and disruptive. They are finding it far easier to sort things out since.

And as you know, any patriotism I might once have had left me for ever when Iraq was invaded and will not return.

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By Tornado
21st Oct 2021 17:17

The EU is an organisation that is inherently unstable and eventually must fail. Even today the foundations are being undermined with serious disputes between Hungary, Poland and the EU. It may take some time, but the EU will surely disintegrate as people within it want to have more freedom for their own countries and manage their own affairs. There is no need for the additional layer of authority that the EU organisation represents.

The United Kingdom of Great Britain and Northern Ireland will also probably change in time to reflect the wishes of those that live in it, and this is just a natural development of the ever changing world that we live in.

I have to say that I do not believe that the people of Europe have any sort of dislike for the British in the same way that we have no dislike of any of the people of Europe. In fact I think the people get on very well with each other.

If there is any dislike, it will be directed to the leaders of the EU members who do not always represent the views of their citizens.

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By johnjenkins
22nd Oct 2021 15:45

I have many friends and relations in Europe and most say the same, that the EU should have stuck with EFTA and not gone for a country called Europe. I thought the EU would collapse in 5 years, however with what has been happening recently I give it 2 in its present form.

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By johnjenkins
21st Oct 2021 16:00

I must agree. I thought John Smith would have made an excellent PM. I know a lot of people think TB lied over WMD however he would have had to get it passed Cherie first. The funny thing is we will never know what might have happened had the allied forces not gone into Iraq.
I do blame GB for the mess HMRC are in but I also blame heads of HMRC for allowing it to continue.

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