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MTD director defends roll-out strategy

27th Sep 2016
Editor AccountingWEB
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Roll out project
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The appearance of the Making Tax Digital (MTD) for Business director Theresa Middleton on a discussion panel at last week’s Iris World London event was one of the main draws for conference attendees, with the bulk of the questions from audience members focussed on specific details of the proposals outlined in the MTD consultation documents.

Before the panel AccountingWEB briefly caught up with Middleton to ask a couple of questions about the project, its rollout and ambitions, and put a couple of key concerns AccountingWEB members have raised.

‘Agile’ approach

One concern expressed by accountants has been around the project’s rollout to the smallest businesses first, with many worried that their clients will struggle to adapt to such dramatic a change in the relatively short timescale given. Some have expressed a preference for the scheme to be rolled out to the largest businesses first in the same vein as auto enrolment.

While Middleton expressed sympathy for this perspective, she argued that the way Making Tax Digital is to be implemented will allow the project more flexibility to adapt to its users’ needs.

“The way in which we delivered IT change in government used to be big bangs”, said Middleton. “We’d spend a long time gathering the requirements, then deliver and deal with what happened. In that scenario you were able to work first with the biggest businesses, then roll out slowly across the population to the smallest last.”

However, according to Middleton the government does not run IT projects like that anymore. “We start with what we call a minimum viable product, which is the smallest, most straightforward service we can deliver, built on customer research, and then we test, build and iterate.”

This means starting with the smallest and the most straightforward: in this case unincorporated businesses. Middleton revealed that private beta testing service for this has already started, with HMRC sharing the project’s APIs with 18 software providers who are part of the private beta.

Closing the tax gap

Another reason Middleton gave for MTD’s initial rollout to smaller companies is the government’s demands for a return on its investment in the project. Around £1.3bn is being spent on the scheme, and the way the government plans to get a return on that is to reduce the tax gap caused by error. According to Middleton, error is something that is a “behaviour of small businesses”.

“Typically large businesses don’t make errors – they may engage in other behaviours that contribute to the tax gap, but error is not one of them,” she said.

The most recent figures have the UK’s tax gap - the difference between the amount of tax that should be collected against what HMRC actually received - at an estimated £34bn.

Virtual customer relationships

Middleton also stated that with small businesses increasingly interacting digitally with HMRC, the Revenue hopes to use MTD to mirror the type of experience for them that larger businesses receive through having a customer relationship manager.

“What we are seeking to do is to mimic the type of experience we’re all used to from the sites we use to buy goods and services”, she said. “They use their IT to know how you behave, what you buy, and are able to prompt and nudge to encourage you to buy more things.

“We might use such tools to say ‘you’re approaching the VAT threshold, are you aware of that and might you want to think about registering?’ or ‘here’s a relief that businesses like you have claimed – you haven’t claimed it, are you sure this hasn’t been overlooked?’”

Nudges and prompts

While Middleton was adamant that HMRC does not see MTD displacing the role of the accountant in the tax system, what is clear is that they see the role they perform in it changing.

“Depending on what type of operating model an agent currently employs”, said Middleton, “they may find that some of what we call ‘lower value’ work such as adding up a pile of invoices and filing a return based on that will disappear. The agent will then be able to spend their time giving the business advice about growth or being more profitable.

“We’ve certainly not detected in any of our research any appetite amongst businesses to not use an agent, but the way in which they use them will be a much higher value add in terms of profitability and growth, which we think must be a good thing.”

 

Do you think HMRC’s ‘agile’ way of working will increase the likelihood of the MTD project landing, or is the uncertainty around the exact nature of the tool just adding to public concerns about the scheme? Have your say below the line.

Replies (66)

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By Ben Lauritson
27th Sep 2016 11:51

"Typically large businesses don’t make errors" - Tesco, anyone?

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Replying to Ben Lauritson:
Hallerud at Easter
By DJKL
27th Sep 2016 14:25

The only error there was they got caught.

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Replying to Ben Lauritson:
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By DMGbus
28th Sep 2016 11:50

The "Tesco" type error was the typical PLC one of trying to overstate profits, so very good for HMRC in terms of CT yield, so "the less said the better" by proponents of MTD!

MTD is being justified by small businsesses allegedly making errors - something that is at risk of increase with the current enthusiasm for "scan / photograph receipts and upload them to an App" - errors will increase based on my current experience of ReceiptBank / Xero in this context.

This new scheme of things has tthe following processes:
1. Client uploads data
2. ReceiptBank often miscodes data
3. Xero accepts ReceiptBank's miscoding
4. Accountant reviews the results of the above and puts any errors right

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By JSJ54
27th Sep 2016 12:11

"the way the government plans to get a return on that [£1.3bn] is to reduce the tax gap caused by error".

Really? So taxpayers will be submitting more accurate information when MTD is introduced. Pigs might fly.

And then people wonder why we don't respond to MTD.

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Replying to RobertD:
By Ruddles
27th Sep 2016 14:21

While I understand the sentiment behind the petition, if the originator wants Parliament to take it seriously then the narrative ought to have been much more comprehensive and forceful (and spell-checked before submission). It comes across as nothing more than a mild gripe.

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Replying to RobertD:
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By heng
28th Sep 2016 10:38

RobertD wrote:

https://petition.parliament.uk/petitions/167738


I suggest the "skills, time and funding" shortfall is exactly why small businesses should be using digital tools. Trying to maintain accurate paper records is inordinately hard and time consuming, not to mention actually needing to use them for anything.
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Replying to heng:
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By leon0001
28th Sep 2016 13:33

But even people with one let property (£10,000 is less than £200 per week) are caught by this. If there is no mortgage, they have 12 statements detailing rent received and expenses paid by the collection agent per year. Are you saying that it is worth getting bookkeeping software for this? And the mobile app can scan and accurately these? The change to Making Tax Difficult will just increase the taxpayer's costs for absolutely no benefit. And tiny cases like this will be first - Good Grief!

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Replying to RobertD:
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By johnjenkins
28th Sep 2016 14:15

I've signed but when it reaches parliament Gauke will just refer to the answers he gave at the original petition hearing.

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By Duhamel
27th Sep 2016 14:00

"The agent will then be able to spend their time giving the business advice about growth or being more profitable."

As if there will be sufficient work of this nature to make up for the work lost, even if the agent has the ability to perform it.

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Replying to Duhamel:
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By JSJ54
27th Sep 2016 15:50

"The agent will then be able to spend their time giving the business advice about growth or being more profitable."

Provided the client wants it and, if they do, are willing to pay for it.

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Replying to JSJ54:
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By Brodders
28th Sep 2016 10:12

I loved that line. Made me think about fact I paid to have my lounge decorated recently. Is the equivalent that a painter and decorator, if freed up with more time could go round 15 different houses each day pointing out to me all the things that need doing and kindly explain how I do them, filling in cracks etc. So a "higher level advice service", but never actually decorates anything as that would be "lower level".

Since when are HMRC in the business of telling clients what work/advice they should pay for?! If they want someone to deal with a stack of invoices and the adviser agrees a price the client are happy with and the adviser is happy to do it, what does it have to do with HMRC?!

Entirely ridiculous and usual political speak with no sense of the real world.

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By adam.arca
27th Sep 2016 14:14

Hate sounding negative but it's so hard not to when HMG talk such utter tripe.

What Middleton says, cutting the Newspeak out of the equation, represents the "it's all about us" thinking by HMG / HMRC which is at the heart of the MTD proposals.

Apparently, the "minimum viable product" approach means starting small and growing from there: the "suck it and see" approach which I wouldn't have any problems with if HMRC were talking about an internal project which didn't affect anyone else. But in this case the opposite is the truth!

Their "minimum viable product", by concentrating on the smallest businesses which are least able to cope with MTD and least geared up for it is in fact the "maximum viable impact" upon the end user. And not only do HMRC have a complete, utter and reckless disregard for the users they are seeking to impose this on first (totally untested as well, it seems), they are also breaking their own principle: coding for the smallest and simplest businesses may well be the "minimum viable product" purely in a coding sense but it also has the potential to be the "maximum viable ballache" for the Revenue down the line as it will ensure the largest possible user base is caught earliest before the wrinkles are ironed out and also where the largest number of time-consuming errors / support calls / general moaning will occur.

So, go on then HMRC, argue yourselves out of that one.

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Replying to adam.arca:
By Tom Herbert
27th Sep 2016 15:11

@adam.arca I can't answer any of your other points, but I'm led to believe there will be public testing starting Q2 next year.

Will be sure to put the rest of your argument to the MTD crowd when I next speak to them.

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By cstwragby
27th Sep 2016 14:31

£1.3 billion spending on something that isn't needed. I'm sure there's plenty of other causes that could use that money.
And I'm uneasy about certain software providers being on the beta. This is a boys' club to force "plebs who use spreadsheets" into using expensive software which again isn't needed

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By Vaughan Blake1
27th Sep 2016 15:11

If all these 'errors' are accidental, then statistically it is likely that they won't all be in the taxpayers favour!

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By cstwragby
27th Sep 2016 16:53

"they may find that some of what we call ‘lower value’ work such as adding up a pile of invoices and filing a return based on that will disappear"

On the contrary, it's only now going to increase because clients who used to keep their perfectly satisfactory records will now handover receipts to their accountants to become their new bookkeeper

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Jonathan@Aiteo
By [email protected]
27th Sep 2016 17:12

Some key points from an HMRC webinar that I attended today. These may have already been evident to others, if so, apologies:

1) You will only be penalised (subject to criteria yet to be determined) for a *late* quarterly return. The *information* in each return can be modified in subsequent quarters and you only sign up to the accuracy of the numbers in the final year-end submission. There will be no penalties for incorrect quarterly updates.

2) All accounting /tax adjustments (accruals basis, stock, capital allowances etc.) can be left out until the final year-end submission.

3) Frequency of tax payments will not be mandated to increase during the life of this Parliament. Payment dates will not change.

So the quarterly information, categorically, cannot be relied upon for a more accurate tax assessment, and the collection of tax will not be accelerated. Given this, I'm now struggling to understand the point of the whole expensive exercise?

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Replying to [email protected]:
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By RobertD
27th Sep 2016 19:16

Jonathan-AT-Aiteo wrote:

Some key points from an HMRC webinar that I attended today. These may have already been evident to others, if so, apologies:

1) You will only be penalised (subject to criteria yet to be determined) for a *late* quarterly return. The *information* in each return can be modified in subsequent quarters and you only sign up to the accuracy of the numbers in the final year-end submission. There will be no penalties for incorrect quarterly updates.

2) All accounting /tax adjustments (accruals basis, stock, capital allowances etc.) can be left out until the final year-end submission.

3) Frequency of tax payments will not be mandated to increase during the life of this Parliament. Payment dates will not change.

So the quarterly information, categorically, cannot be relied upon for a more accurate tax assessment, and the collection of tax will not be accelerated. Given this, I'm now struggling to understand the point of the whole expensive exercise?

The reason given is that greedy software companies have led HMRC to believe that customers (lol) make fewer mistakes when using software performed in real time.

What it in fact does is takes away the ability of normal people to record and present their records in a manner which they decide and will result in distress and higher costs.

HMRC should be reaching out to all businesses and not just banging a video on you tube and a few press releases.

Put it on TV and see the response you get. Everyone I've told has been appalled.

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Replying to [email protected]:
Adrian Pearson
By Adrian Pearson
27th Sep 2016 21:01

Therein lies the nub of the problem

The main reason accountants are generally negative about MTD is because they can't see how "any old numbers quarterly then tidied up at the year-end as normal" improves things for HMRC. And they are correct.

What HMRC are actually doing is playing the long game and they have their eyes on a bigger prize. Unfortunately, because they don't feel they can own-up to that right now, they are left trying to justify something that (now at least) makes no sense.

That bigger, future prize they are after is access to all businesses individual transactions (not summary totals). Hence the mandating of accounting software over spreadsheets. It's all about big data being analysed by big brother.

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Replying to Adrian Pearson:
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By cstwragby
27th Sep 2016 21:46

I do believe you've hit the nail right on the head there. An easy way to open Enquiries as they can see straight away what has been stated without having to ask!

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Replying to Adrian Pearson:
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By Cyrille1987
28th Sep 2016 07:05

You are right, access to business individual transactions by HMRC can be the only sensible rationale for MTD.

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By ireallyshouldknowthisbut
28th Sep 2016 09:55

@Johanathon, your point about penalties for not filing not penalties for WHAT is filed is my take on the whole thing. This makes our job very simple.

HMRC are asking for garbage data, and garbage data they will get, each and every quarter. I can build a system for that without troubling our clients.

HMRC wont of course get a shred of their intended benefits, but sod them quite frankly. They can get their knighthood for the white elephant, and we will fling useless data at HMRC. Same old pointless crap.

NB those looking for LOGIC in this implementation are misguided. You assume rational understanding of micro and nano business by senior members of government. This is blatantly not the case. I dont buy the assumption the "make believe" benefits are a cover story. I think the senior bods on this are so far removed from reality they actually believe the software co's sales pitch, and that any critics are just a bunch of moaners. This is just like Gove believing he knows how to teach our children better than more or less every teacher in the country. Just as the teachers do now, they do Goves rubbish and THEN what actually works to teach the kids afterwards. We will do the same.

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By Ben Alligin
28th Sep 2016 10:25

HMRC and NICO decided to abolish Class 2 payments directly to NICO, instead let's go for a bit of harmonisation and tax synchronization. The taxpayer simply now pays the annual Class 2 contribution via their tax return - or so they told us. Sadly HMRC and NICO databases don't match up and currently 50% of my clients entered on HMRC software find that HMRC refuse to calculate the Class 2 due. How difficult is it for software to identify if a tax payer taxable profit is greater than £5,965 and then multiply £2.80 by 52?
HMRC have been aware of this problem since April, still no fix. Making Class 2 digital is clearly working well!!

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Chris M
By mr. mischief
28th Sep 2016 10:29

How on Earth does someone so clueless get to her level?

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By RobertD
28th Sep 2016 10:30

You can make tax digital but you can't MAKE people digital

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By dmmarler
28th Sep 2016 10:49

This all started with the EU which wanted better data to see where the VAT gaps were as it thought it was not getting enough tax .... HMRC have latched onto this so they can play Big Brother.

This discussion was at a software symposium. None of my clients hold their records on a computer system of any kind. Often they forget to tell me about costs which they have incurred - I check through last year for the likely things they have missed and they then find the invoice they paid during the tax year.

HMRC has only dealt quarterly with people who are VAT registered, it has absolutely no idea how competent or otherwise businesses are at using computers yet alone understanding accounts or complex software. They have not seen the muddle that people get into using straightforward single business accounting systems (and which accountants unscramble every year/quarter). This whole idea should be scrapped forthwith.

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By darrenwilliams
28th Sep 2016 10:59

Big Business does not make errors, that is like saying HMRC never make errors as it is big. Oh please get real with your thinking.

It is truly mind blowing to think such matters. The big difference is if you found a £10.00 error on a big business HMRC would let it go, but on a small business they want the tax on it and will argue to the bitter end and also ask for fines and penalties as it was clearly a careless error in every case for a small business.

Small business makes errors because they do, we all do, we are human.

Making small business using computer software or apps, will lead to more errors being made. Over the years one thing I did learn early on is never recommend software to a client unless they are good at keeping manual records or unless they really need it(ie a bigger than small business). As it normally leads to more errors.

Will small business be allowed to work at all to make some money and a living.

I feel so sorry for small business and how they are meant to cope with this change.

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By HLB
28th Sep 2016 11:00

“We’ve certainly not detected in any of our research any appetite amongst businesses to not use an agent, but the way in which they use them will be a much higher value add in terms of profitability and growth, which we think must be a good thing.”

WRONG - the vast majority of small clients will say 'can you do this for me' which will clog us up with low value work leaving no time for added value work.

“Typically large businesses don’t make errors – they may engage in other behaviours that contribute to the tax gap, but error is not one of them,” she said.

WRONG AGAIN. Obviously never been involved in large firm audits where materiality limits on single audits are larger than the combined turnover of all my clients put together. And when I was in a large firm I saw some 'not material' errors.............................

[email protected] sums it up. What's the point?

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By KenKLM
28th Sep 2016 11:08

Reduce small business "error" ... she seriously thinks sole traders scanning receipts into an APP will reduce error ? Give me strength ! When governments talk about return on investment I shudder - just do the job . I think maybe small business is being targeted first as they are more likely to give them a late filing penalty "return" !? Or is my cynicism out of control on MDT !?

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7om
By Tom 7000
28th Sep 2016 11:07

If there are no penalties for the incorrect submission of the quaterly returns then some readers may be tempted to just pop £1 in income and call it a day dealing with it all at the year end. But you shouldnt do this because
1) its unethical
2) You need to train the clients/staff to do it because...of the bigger prize....

And you are on the right lines with the bigger future prize mentioned above, but not quite there.

Once this is in and has been running two years, your tax will be due quarterly like VAT. So the Government who work on a cash basis can collect in the tax earlier and reduce the deficit.

Thats what its all about accelerating tax payments. Its a simple excuse to justify it because if they were POA youd drop them down.

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By Ian McTernan CTA
28th Sep 2016 11:14

It's a bit sad really that this mouthpiece has so little understanding of how the real world operates and dreams that everyone will move to using computerised accounting systems just to satisfy HMRC.

Your average builder, for instance?

Here's what will happen, now we know no penalty for quarterly updates:

Me: 'Bob, any change this quarter or around same as last quarter?'
Bob:'about the same mate, throw in the same three lines?'
Me: ' so £12k turnover, 7k general expenses, net 5k?'
Bob: 'yep, that'll do.'
Me: ' see you at the year end with the paperwork.'

They really shouldn't let people from ivory towers with no experience of running their own businesses or being self employed anywhere near these projects.

The dream of 'real time' information might happen in 20-30 years time when this generation grows up having grown up with social media etc but for many it's not likely.

Clients see no need for it.

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By Snowstorm
28th Sep 2016 11:28

"What we are seeking to do is to mimic the type of experience we’re all used to from the sites we use to buy goods and services”, she said. “They use their IT to know how you behave, what you buy, and are able to prompt and nudge to encourage you to buy more things."

The difference being that we can choose whether to deal with a private supplier of goods and services, and go elsewhere if we don't like the 'experience', or if our computers don't support it.

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By Robbas
28th Sep 2016 11:41

HMRC have just given the biggest boost to the black economy ever. Cash is king no records so nothing to upload !!!! Before embarking on this sort of project and spending £1.3 billion of taxpayers money HMRC ought to understand how small business works they obviously haven't a clue.

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By steve 12321
28th Sep 2016 11:43

I hope none of the "brains" behind this get poached to work on Brexit negotiations and that too will be a looming disaster. No-one has done any meaningful impact assessment of this!

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By Inquisitive
28th Sep 2016 11:44

This is not the real world and we are going to be made to pay some inexperienced new graduates how business works. Where exactly will I have to upload my receipt from B&Q for a 59p pack of screws? Or have I missed something?

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Replying to Inquisitive:
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By adefinch
28th Sep 2016 17:49

And how long will uploading that receipt take? A lot longer than entering it in a spreadsheet! Madness!

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By 85sarah
28th Sep 2016 11:45

“Depending on what type of operating model an agent currently employs”, said Middleton, “they may find that some of what we call ‘lower value’ work such as adding up a pile of invoices and filing a return based on that will disappear.

If a business currently uses an accountant to add up a pile of paper invoices, presumably because they don't have the time or expertiese, what is going to magically happen with the roll out of MTD that will suddenly cause these type of clients to keep accurate electronic records themselves?

We have a number of 'shoe-box clients'. We have seen attempts by some to start using quickbooks online and similar, and in a lot of cases, the results weren't pretty.

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By Peter-S
28th Sep 2016 11:52

"she argued that the way Making Tax Digital is to be implemented will allow the project more flexibility to adapt to its users’ needs"

The users don't 'need' it though so how does that work?

I digress - so for vat registered clients I can enter one quarterly sales 'transaction' being the total from box 6 and one quarterly purchase 'transaction' being the total from box 7.
CIS clients the sales will already be there so just enter an arbitary mileage figure.
Other clients I need a rough quarterly sales figure for a single 'cash sale transaction' and perhaps some mileage and then for all of them tidy it up at the end of the year with nine months to do it.

If that works great, I'm getting back some free time in January and clients don't need to try and learn bookkeeping which obviously most don't want to anyway. If that approach doesn't work I can't see how the system as a whole will work at the true small business end of the spectrum.

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By raybackler
28th Sep 2016 12:01

Scanning receipts and then uploading into cloud accounting software that is then used to upload data to HMRC is just not accurate enough.

Some retailers put the date on the back of the receipt, so it gets missed. Some people scan the credit/debit card receipt as well as the VAT invoice, so it gets duplicated. The VAT on small retail invoices is often not shown and can contain a mixture of zero, exempt and standard rated items. Some people scan delivery notes instead of the invoice. Don't get me started on Amazon and Paypal receipts where VAT is something of a mystery. Sometimes VAT is shown on an invoice but not recoverable i.e. it is entertaining or a car. Sometimes VAT is only partially recoverable, as in a builder who rents out property as well as building new. Sometimes clients code capital purchases as revenue and vice versa. Sometimes clients incorrectly code a payment to a balance sheet account instead of an expense account and vice versa. Sometimes clients import things and have no idea about import VAT or about reverse charge VAT.

All of this requires manual intervention by someone in the know, i.e. an accountant or bookkeeper. Left to their own devices clients and software houses will not bridge the gap.

Where a client is VAT Registered these anomalies are sorted out quarterly with an additional check at year end. Where clients are below the VAT threshold, then for most micro businesses there is only the annual check. Good luck with the accuracy of quarterly updates for these clients, who are the backbone of the UK. It is madness starting with them first.

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Keep Calm, I'm and Accountant!
By i-accounts
28th Sep 2016 14:22

In our practice we are now faced with having to hike fees for our clients, most have not seen a fee increase in the past 5 years (an undertaking we gave to clients due to the economic climate). 75% of our clients use paper based methods, we have about 5% who use spreadsheets, 2% with software and the remainder hand us boxes of receipts. For the most part we find that to use a software in house (other than final accounts production) for our small sole traders is uneconomical especially in the perfectly balanced and cross matched books we are handed which generally require nothing by way of alteration. I would further add that half our clients do not even own mobile phones, let alone computers! Of the clients we have spoken with the general feeling is that they have no intention of embracing MTD, they will certainly not be rushing out to buy a PC however this leaves us now with the dilemma of having to significantly increase fees as not only will we have to cover the cost of software licenses we will also have to take on more of the bookkeeping work. As an example, we have a VAT registered client who completes everything to perfection in a simplex D book, all receipts and invoices are numbered and bank lines reconciled to the weekly page, in 15 years we have never found an error. He does not have a PC, he phones us each quarter with the figures for the VAT Return which we submit for him. He had a VAT inspection a few years back and no adjustments made either way. He is a sole trader with a turnover of just over £120,000 and we currently charge him £250 per year, MTD will mean this fee will at least quadruple as we would have to take on the bookkeeping and cover the software license for him, he has no online banking and no intention of changing this or investing in a PC.
This is typical of much of our client base and we are now concerned that many of them (mainly farmers who supplement their loss making family farms with a bit of part time work to keep the wolf from the door or seasonal businesses that struggle to keep their heads above water out of season) will not be able to afford this financial imposition. A large proportion of our clients are nearing or past retirement age with little or no pension to fall back on, they work the family business as previous generations did, it's a way of life and they know nothing else, many have their grown up children on board who carry on as they do, as far as technology is concerned, the younger generations have no more interest then their parents!
In our case MTD is far from welcome, we have tried and failed to take on staff over the years, we are just too remote in our location, the people in our area are all farming types and those who are not are generally low income self employed due to the lack of diversity, internet has been little embraced as the service in the area is so poor, yes, it's available, but just not popular, in a nutshell we are a technologically backward pocket of the UK and I am sure we are not unique in this either.
Do I think MTD is a good idea? Absolutely not, small rural businesses will be forced to close and rural accountants will become as extinct as the dodo!

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Replying to i-accounts:
Tornado
By Tornado
28th Sep 2016 20:28

You may feel that you are a bit isolated but I don't think your practice is that much different to many thousands of others across the country, rural or otherwise.

The more this scandal goes on, the more obvious it is that the Architects of MTD are breathtakingly ignorant about a subject that they should be fully conversant with.

I would say to you, and others like you and me, that it would be suicidal for the Government to proceed with MTD as proposed and there will be massive climb downs and back pedalling before April 2018 and I am now thinking that there is a real possibility that the whole project could be delayed for a significant period of time. Carry on as usual and face the actual problem if and when it arises.

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By Inquisitive
28th Sep 2016 12:35

Just to add the obvious. When will the hackers attack? and succeed?

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By RobertD
28th Sep 2016 12:51

Just had a plumber in to service the boiler. I asked him about MTD and he'd not heard anything but was appalled. He had just entered his own figures in online services 4 months prior to the deadline. He has no digital skills. I told him to look on YouTube where he will find a video of himself embracing MTD.

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By ruth.julian
28th Sep 2016 12:55

Whilst MTD is considerably wobbly in terms of aiding small business accounting and accuracy, a major win for HMG is the ability to, in theory, have more up-to-date data for forecasting tax revenues and economic activity. If, as is clear from the posts in this thread and elsewhere, that data will be flawed, then HMG is no further forward in terms of economics, statistics or tax take for what is a huge investment.

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By dgilmour51
28th Sep 2016 13:03

“Depending on what type of operating model an agent currently employs”, said Middleton, “they may find that some of what we call ‘lower value’ work such as adding up a pile of invoices and filing a return based on that will disappear.

Utterly naive !!! Small businesses abhor and eschew paperwork in the round.
All the small businesses I know are working for their good, not to 'feed' the ever more ravenous HMRC. All that stuff is 'for the accountant' and the less they see and hear of it the better.
I really have no idea what planet these HMRC types live on - certianly its nowhere near here.

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By Sheepy306
28th Sep 2016 13:28

“they may find that some of what we call ‘lower value’ work such as adding up a pile of invoices and filing a return based on that will disappear."

Hmmmmm......now where have I heard those expresssions before? Oh yes, from practice guru's/mentors, cloud software vendors and Aweb editorial's, every single week.
I actually can't blame HMRC entirely if that's what these people are whispering in their ears with a straight face. The problem is that accountants are generally required to have credibility, whereas sales persons with vested interests often don't.

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By leon0001
28th Sep 2016 13:47

Has this lady never seen the acronym GIGO - Garbage In, Garbage Out.
And what about those who will scan invoices with a smartphone, then fail to remember that they have done so and scan them again - some of the time.
The minimum MTD limit should be set at the same level as that for annual VAT accounting.
And there goes the benefit of being on flat rate VAT accounting.
MTD obviously stands for Making Tax Difficult.

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By North East Accountant
28th Sep 2016 13:58

HMRC - if you are reading this, you could do very well to listen.

Us tax agents are the ones you need aboard to make sure your MTD plan doesn't go down the pan, so please take notice and do something about it rather than carry on regardless.

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By SXGuy
28th Sep 2016 13:59

I wouldn't fear. All we need do is boycot the system by inputting £1 figures each quarter and make the correct adjustments within 9 months of the final being due. Pretty much no different to how we operate tax returns. Let hmrc think they have won.

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