You might also be interested in
Replies (29)
Please login or register to join the discussion.
silver lining....for software providers they will have a captive audience....no competition from excel/paper/clients doing their own preparation. Win-Win-Win. Their bugbear....they will be required to provide a small amount free...although even with the explosion in the requirement for their products it seems they don't even want to do that.
it is a concern that it will be the software companies rather than the accounting profession who may have more influence when it comes to what level/type of income can be supplied in the 'free' software.
What will happen with clients who are elderly (I have an 84 year old client whose main source of income is rent) and do not have mobile phones let alone computers!
do you have a computer and internet access? what about doing it for them? or is that too much like being an accountant?
Sorry, but is it just me missing something here? If self employed clients are dealing with their own tax affairs, then fine, they as a single entity can continue doing so, as they are obviously tech minded enough to "have a go". However, many of us are General Practitioners who deal with many clients' accountancy and tax affairs, because clients are just unable to deal with this sort of thing and not because they don't want to. So, regardless of how clients let you have their records, we are still going to need to prepare accounts to give an accurate report. Do HMRC really expect us to be able to report 100's and 1000's of quarterly reports, the content of which we don't even know yet, all at the same time? The reply by the Treasury Minister just smacks of arrogance with some of his remarks - who really is driving this digital revolution? Also, there are headlines being made on this website by Software Companies and in other twice daily emails from various companies, pushing for business, that we may need to decide which clients to keep! Again, what an arrogant message to make - are these commentators saying, therefore, that we need to ditch our own practices basically, because there are just going to be so many clients who will not be able to or want to "toe the line", or indeed accept much higher fees to somehow carry out this burden? If RTI and auto enrolment are benchmarks to go by, God knows how many hours will be required to carry this out. Some may think this a rant, but it is a comment from someone who has moved "with the times" throughout and who is still waiting for an answer of how we will get from A to B to C with this.
I totally agree with janefg. I have a very high percentage of elderly clients, over 80's, who have rental income, quite substantial in some cases.
These people do not use computers, a lot of them have large ledgers that they record everything in & just bring into the office each year.
A fair percentage of my pensioners are also not good on the telephone as hearing is failing & they hear better when they can see the person talking.
HMRC seem to think that just because they tell everyone to use a computer that they will.
What sort of penalties are we going to be looking at for non-compliance?
It may well be that many of the existing software providers do not want to deliver free tools. If they don't then it won't be long at all before free apps start appearing, probably geared by advertising, so I wouldn't worry about it.
A free MTD app will not have to be particularly sophisticated and the nature of the user will likely guarantee a lucrative advertising revenue stream, so they'll probably popup all over the app store.
Somebody will also produce a program that will convert a pre-formatted Excel spreadsheet to whatever structure is required for MTD submission. This will probably cost a few quid a go and solve the problem for 90% of businesses.
And elderly folk who don't have a computer or smartphone? They'll just post their books to a cut-price service that will outsource the MTD data entry (probably abroad) for a few bob.
The business model for software suppliers to support the HMRC promise of "free apps" from commercial suppliers would need to be something like the following:
1. The Free App would only send the basic minimum requirement of data of quarterly data to HMRC, there being an extra fee to extend the app to prepare / finalise the whole tax year return
2. Agents will need to have a software compatible with individual clients free apps, no doubt this agent software will have be at such a high price point to subsidise the promised free apps (extra costs for agents, ultimately a cost that has to be passed onto clients, so much for the word "free" [to taxpayers] misused by HMRC / the Gauke)
Those software houses that find that they cannot fund the development cost of the necessary free app + commercial agent version will, I expect, cease to be - ie. either cease to trade or seek a merger with / takeover by other software houses.
It will be interesting to see if individual "free apps" used by clients will be compatible with a single chosen commercial software by agents : if I had clients using say VT, Quickbooks and Xero would I need to acquire a commercial version of each "free" app or would there be a single solution multi-compatible agent software available? I consider this to be a serious commercial issue for agents - it might lead to some agents saying to client "we only use Sage tax / accounts/ EOY software here, so your free app must be a Sage one, you can't use Xero or VT as most of our clients use Sage".
This reinforces my concern that smaller highly regarded software houses could be put under pressure and result in the big and powerful software houses strengthening their stranglehold on the market.
What is seriously lacking so far in these proposals is an impact assessment - real cost to business of these proposals instead a Gauke vague phrase "Free Apps" misleading us all.
The only certainty we have at this time is that NO clients yet have MTD compatible software.
Once things become clearer then of course users of cloud software like Xero or Freeagent will have this functionality added - and no doubt with a captive market prices will rise.
The problem is that most clients do not use this software and so will be forced to incur expense. Never mind the elderly and other digitally excluded minorities, this is a much larger group - the small business.
We all have them as clients - they have an old PC running Windows XP, with a grubby keyboard and CRT monitor and a 15 year old version of Sage. However the system chugs away and allows them to maintain their records and raise invoices quite adequately.
It seems that with MTD, they are going to be forced to buy new software, which with the move away from one-off licences is likely to compel them to the cost of a monthly subscription ad infinitum. They will no doubt need a new PC to be able to run the software, which means getting to grips with Windows 10, Office 2016 etc.
All in all a major ball ache and expense for no benefit to the business.
so software should be for life no matter whether it is up to the job? no RTI no iXBRL no online submissions of VAT. I've never learned to read or write and add up and it's disgusting that HMRC should say I need to do any of those things or pay for somebody to do it for me.
I think this argument is wrong. I am in favour of progress.
What is worry is the fact that nobody - politicians or HMRC - will tell us why they want quarterly reporting. People don't need to send information to HMRC to know what their tax payments will be. They wont even tell us what they want us to do. They should cancel these proposals until they know what they are doing. They obviously dont have a clue at the present time. They are doing everything [***] about face like all incompetents do.
I agree with Peter. HMRC/Treasury need to complete the sentence, "quarterly reporting is a good idea, because....."
Until this occurs it just looks like a pointless idea which will create a massive amount of upheaval for all concerned, with no benefit to HMRC or taxpayers.
What will be the requirement for charities who only have to complete a CT Return every 5-6 years if at all.
One would hope that they will be left as they are. But HMRC seem to go by the maxim, if it ain't
broke, then break it!
Re landlords - I have a client who is a letting agent. I asked him his thoughts on MDT and how it would affect him. He just shrugged his shoulders - 'no problem for me' I have to prepare such figures anyway'. Have a look at my blog on this subject. My thought are that I will lose my rental clients. They are mostly computer/investment savvy so will do it themselves.
https://www.accountingweb.co.uk/community/blogs/jaadams/the-end-of-the-s...
BUT, if they are that savvy, why don't they do their own SATRs now? Answer, because your service is much more than just number crunching!
we are entering uncertain times...but regarding clients doing their own returns wasn't that the same thoughts when SA was introduced, then when submission via internet came along with the free software. It doesn't change the complexity of knowing what is and is not allowable...
..but maybe when that is unravelled then we may worry, that said the whole idea is to collect unpaid taxes from those at the bottom end....so they are not suddenly going to let those people pay less tax by simplifying it. That would be contrary to what they are trying to achieve.
If I understand correctly, as of 6th April 2018 Sole Traders will be required to submit quarterly reports. I presume that this means that the first reports will become due as of 6th July 2018 although I have no idea when the deadline for the submissions will be. Again, I presume the deadline will be sometime before 6th October when the second submissions will become due.
The majority of clients books are made up to 31st March/5th April. The deadline for these SA Returns is 31st January the following year. Are we supposed to submit quarterly reports relating to 2018/19 before we have even finalized the figures for 2017/18 or are we expected to do a full years work in the first three months before the first quarterly reports become due.
Please can someone square this circle for me.
Good question James! The key will be, what will these 'submissions' actually look like. We are told that they will not be quarterly accounts or quarterly tax returns, so what will they look like? This leads onto what will they be used for and back to "Why is quarterly reporting needed?" Until the last point is answered and the objectives stated, in my mind any further consideration/discussion is irrelevant!
I spoke to a member of the HMRC team at Accountex regarding how director's and their dividends would work but they couldn't tell me anything. Let's say the client's company has a 31st December year end and has to make personal quarterly submissions every Mar, Jun, Sep, Dec as well. The initial dividends declared are £30k split evenly. When we go to do the accounts we realise the actual dividends were £20k due to mileage, use of home, personal payment of expenses etc.
How do we tidy this up? Amend the 4 incorrect returns or do a negative dividend declaration on the next return due? If reducing the next quarterly return due, will the client not have possibly paid a higher rate of dividend tax than what they should of?
As expected the HMRC team member was drawing a blank, he did show me the pretty looking Agent Services page though!
I guess that the HMRC team haven't factored in a system for illegal dividends and backdated a fudge adjustments to put them right!
The best way to tidy this up is to do it properly and pay dividends after the expenses and tax have been accounted for.
The HMRC official wasn't drawing a blank he was more than likely making a note of your name and address for a few investigations!
Someone needs to grasp the particular problems for seasonal businesses. Here in Cornwall anyone involved in the holiday trade will not be wanting to deal with accounts/tax in July (for the first quarter) without having a direct financial impact on their business. Can HMRC give me one GOOD reason why a quartely return in July will be of any use to these businesses. They are up at 5:00am and lucky to be in bed by midnight. Please can I suggest just a few influential HMRC staff come and work just for a week in one of my B&B clients' homes. They will then appreciate the heavy hand they are using against the very businesses the Gov't says it is supporting.
While we are going about MTD can we get away from the stupid 6th of the month, none of the software I come across works with months ending on the 6th of the month following
“The silver lining for an agent is the new process will enhance the working relationship with clients.
I am not sure about that one, would you fancy explaining all of the above to a construction worker (not sure i understand it all myself), he will not understand it and turn around to you and say, that's your job.
Its that wally George Osborn's legacy, sneaky , stealth taxes.