MTD ITSA legislation: HMRC green-lights three-line accounts
Long-awaited draft legislation for Making Tax Digital for income tax self assessment has confirmed that those with turnover under the VAT threshold will be asked to submit just two figures to HMRC under the scheme’s new quarterly update requirements.
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The whole MTD thing is encapsulated well by this from a former Government insider re the Civil Service:
"The problem isn’t the people. It’s the purpose. What exactly is the point of a particular programme, or department, or bureaucratic scheme? The civil servants running it may very well be doing so faithfully and diligently but if the initiative itself is unnecessary, counter-productive or poorly designed then all the hard work and professionalism in the world won’t save it from being a waste of taxpayers’ money."
https://www.mailplus.co.uk/edition/features/185896/how-my-red-tape-night...
If you then read down to the bit about pyjamas it will all make more sense (or not as the case may be).
The solution seems to be either:
1. Everyone goes on strike and refuses to file MTD returns. This should enable Royal Mail to return to profit, delivering penalties that can be ignored and shredded, or
2. Everyone files nonsense numbers on the two lines and lets HMRC's Sinclair computer crash and burn trying to work out what has gone wrong.
'Everyone goes on strike and refuses to file MTD returns'
No need to strike, this will probably just happen anyway.
'This should enable Royal Mail to return to profit, delivering penalties that can be ignored and shredded'
Yes, a great idea to revive Royal Mail.
"Everyone files nonsense numbers on the two lines and lets HMRC's Sinclair computer crash and burn trying to work out what has gone wrong."
Do you really think HMRC have a computer as good as a Sinclair.
"Daisy, Daisy, Give me your answer do! I'm haaalf craaaaazy ..."
- with apologies to HAL in 2001.
Re nonsense figures, that is what has been happening with MTD VAT for the last 3 years and HMRC seems perfectly happy with it. As I've said before, HMRC will accept any rubbish as long as it is digital rubbish.
A complete farce from start to finish - but the the British have always written great farces!
A complete farce from start to finish - but the the British have always written great farces!
This has to be one of the best.
I guess the Government have the Film Rights.
https://quarterly.blog.gov.uk/2014/07/15/the-blunders-of-our-governments...
Just so, except this one is sadly lacking Brian Rix. The only thing remotely funny about Jim Harra is his amazing ability to obfuscate about HMRC’s ability to perform even basic tasks in a timely manner.
It is a pity Brian Rix has passed, he would make a splendid HMRC outreach supremo in his aptly named 'Whitehall Farces''
He was a throughly good chap, RIP
And what have our beloved institutes done?
The profession should have pushed back hard against this along time ago and refused to engage with government or HMRC, instead of getting involved with meaningless dialogue and pilots. They should have made plain they are not interested in discussing any plans until HMRC gets it's current act together full stop.
I wouldn't have engaged if I was in charge of the ICAEW
From what I understand, if the PBs had not engaged (talked), HMRC would have steam-rollered ahead anyway. By "engaged" I mean "talked", I don't think there has been much practically in helping HMRC deliver MTD. Having only 7 or 8 in the pilot from an anticipated number of 400,000, reveals the complete lack of engagement in a way of making MTD ITSA happen. But we do need to engage to ensure HMRC understand the issues. There's no point whinging to ourselves because if HMRC truly believe digitisation is simple enough for taxpayers to do it themselves, HMRC will perceive our whinging as accountants being unhappy we're going to have less work and therefore be less wealthy. Whereas in reality we're all complaining about the opposite: we know our clients are incapable of digitising their records accurately and we're going to be overwhelmed with work. So thank you HMRC for giving us so much extra work we can charge our clients for am make us even richer. Where would we be without all these time-consuming HMRC regimes?
Went to an HMRC consultation with Agents event about 5 years ago (which I found out about on AW and not from HMRC themselves) and tried to explain that the practitioners issues would be too much work and not enough people to do it. They all took notes but one of them actually said that work should decrease as software would take the strain. They weren't listening.
The professional bodies seem to be more interested in pushing positive discrimination. such as the Black Talent Charter and #10000blackinterns (for the record, I am in favour of NO discrimination), rather than minor matters such as MTD:-(
Likewise. I wouldn't have engaged with them to see how to best incorporate MTD.
I would have just said it is a terrible idea with no tangible benefit and lots of costs for UK taxpayers, just nip it in the bud.
Still nothing about the hardworking backbone - over £10K -struggling to make ends meet and unable to cope digitally. And the scope for claiming Exmeption for whatever reason , as previously announced.
More fun ahead.
It's the small trader or 'pension fund' landlord whom this legislation will completely knacker. Most aren't computer literate and they certainly aren't bookkeepers so the likelihood of them getting it right for MTD are miniscule.
Programs like Xero keep telling us how clever they are and how simple to use they are but still we find huge recording errors when we come to check the VAT returns. Latest was a complete quarter's sales of one sort recorded as outside scope instead of standard rated. Great for the client if not spotted but not much good for HMRC. And they were usually competent at Xero so heaven help HMRC when Jo in the street has a go at it with no experience at all.
HMRC just isn't fit for purpose. Computers won't solve the problem - just make it worse. They need trained, competent staff. I can only assume they just don't bother to train them nowadays but rely on computers. Tip for HMRC - younger modern taxpayers are cleverer than computers and will use their shortcomings to manipulate the digital figures and the older taxpayer probably cannot cope with computers. So what is the point of MTD? Taxation by fines - of course.
Hello Ted
The real problem behind much of this appalling situation is due to the progressive and deliberate, side-lining of Accountants and all others that assist people in dealing with their tax and accounting affairs.
If HMRC had acknowledged that we were the people who could help introduce any sort of major changes and provide them with all the information that they would require, together we could have improved the tax administration system for the benefit of all.
Instead, HMRC treat us like dirt and seem to expect us to bail them out for no incentive at all. The net result is that I for one, will not provide an iota of assistance to HMRC with their failed project until they seriously listen to those that really know what they are talking about.
HMRC need to produce a fully working and tested MTD system BEFORE expecting anyone to use it which is the least that we and everyone else should expect. It is their responsibility to do this, NOT OURS.
This is so appallingly bad that I think the only solution is to kill it off completely now, stick with the current excellent Self-Assessment system and perhaps start again with planning changes to tax administration based on the knowledge of those that really know, like Ted, me and thousands of others.
One question to ask, of course, is what has happened to the 2000 million pounds plus that has been spent on this project. Where has it all gone?
I just called the agent helpline about a self-assessment registration. The friendly and efficient operative volunteered during the course of the conversation that he understood there were going to be quarterly returns for self-assessment but he didn’t know what date it was going to start or how it would operate.
At some point the helplines are likely to be deluged with calls about MTD so I hope by then the relevant information has been passed on to front-line staff.
But maybe the people implementing MTD don’t yet know either.
"But maybe the people implementing MTD don’t yet know either."
It sounds as though the helpline operative doesn't know the difference between Self-Assessment and MTD for ITSA yet.
Far too many on the "helplines" are raw trainees. I had one on Monday on the ADL that had never heard of an "agent". How can HMRC put staff on the ADL and not tell them what the A stands for.
This raw recruit had no idea how to proceed and had to load their script on screen and read it out ..very..very..slowly..they..clearly..had..literacy..problems. They read out "has the customer passed security?" I said "yes". They were happy with that and we proceeded to discuss the client's affairs without me having to supply any security information: name, address etc. My point is, inexperienced helpline staff are probably so overwhelmed with the here-and-now that they'd never be able to cope with anything that might or might not happen in future. The MTD-can has been kicked down the digital-road so many times and the goalposts are always moving that these helpline newbies will never catch up. Way back in 2007 Gordon Brown announced the IHT threshold would be increased to £350,000 in 2010. 12 years later we are still waiting.
“They read out "has the customer passed security?" I said "yes".”
Priceless :’)
Hope I’m not overstepping to add a
[chuckle]
It sounds as though the helpline operative doesn't know the difference between Self-Assessment and MTD for ITSA yet.
TBF, he knows more on the topic than most of my clients
What is the point behind MTD ITSA? No gain no loss to Revenue. Waste of time. Neither tax payer nor HMRC gain.
What is the point behind MTD ITSA? No gain no loss to Revenue. Waste of time. Neither tax payer nor HMRC gain.
Just listen to accountants that work in the real world, make the threshold £85,000 and then they can save face. Most of us know what we are talking about......
HMRC are very good at raising fines for being late but not much at getting things done on time -So - why not level the playing field? Fine them for delays over say 6 weeks in replying to letters, failing to deal with CT assessments, incorrectly amending tax returns and then not responding. At £100 a throw I should think we would all be good for a thousand or so in refunds for clients. My current record is two letters to the complaints department via the Chancellor (probably had other things on his mind in view of subsequent events.) and separately over a period of about two months and still no reply. Mind you they were pretty prompt with the penalty notice.
As a service it isn't fit for purpose either for HMG or for the taxpayers who pay for it. If it was a private Company it would have gone bust years ago. MTD won't make it better just easier for people to befuddle HMRC which shouldn't be difficult anyway as they have few trained staff and their computer analytics are daft.
Only thing they are good at is being PITAs about minimum wage enquiries and they don't even get them right.
HMRC are very good at raising fines for being late but not much at getting things done on time -So - why not level the playing field? Fine them for delays over say 6 weeks in replying to letters, failing to deal with CT assessments, incorrectly amending tax returns and then not responding. At £100 a throw I should think we would all be good for a thousand or so in refunds for clients. My current record is two letters to the complaints department via the Chancellor (probably had other things on his mind in view of subsequent events.) and separately over a period of about two months and still no reply. Mind you they were pretty prompt with the penalty notice.
As a service it isn't fit for purpose either for HMG or for the taxpayers who pay for it. If it was a private Company it would have gone bust years ago. MTD won't make it better just easier for people to befuddle HMRC which shouldn't be difficult anyway as they have few trained staff and their computer analytics are daft.
Only thing they are good at is being PITAs about minimum wage enquiries and they don't even get them right.
Yep - just been chasing up response to a letter to HMRC from December 2021 that contained a copy of a letter not dealt with from December 2020. So I had 25 minutes waiting time on the phone with that terrible music, then was told the letter had gone over to the "technical department" and HMRC call handler would try and put me through - another 15 minutes wait and I got cut off! It simply is not good enough.
HMRC published the following on the Agent Forum this week:
"In terms of our performance, we made solid progress in 21/22 and this will carry on in 2022/23.
We aim to answer all calls to the agent dedicated line (ADL) within 10 minutes and our data shows that we rarely exceed this. If any agents are facing specific problems, then I would appreciate a bit more information so that we can investigate what has gone wrong.
We are reviewing the ADL position, ahead of a bespoke RBSG to discuss this over the next few weeks.
In terms of our other tax lines, our average call wait times (year-to-date) have fallen by seven minutes between April 2021 to February 2022 and we are continuing to improve these services, by recruiting and training extra staff.
We have also increased the proportion of correspondence cleared within 15 days by more than 20 percentage points between April 2021 and February 2022. Our overall customer satisfaction has remained above 80 per cent but we know that there are areas we need to renew our focus to make sure our service levels are where they it should be."
We all know the above does not reflect reality. HMRC are asking for information which we need to supply: there's no point moaning amongst ourselves. We can supply the information to our professional body's IOG member. Contact details are at the end of https://www.gov.uk/government/publications/agent-update-issue-96/agent-u....
1. Does answer and then cut off get included in the 10 minutes?
2. Have fallen 7 minutes from what baseline - 7 hours?
3. Have increased clearance of correspondence within 15 days by more than 20% from what baseline - 1%??
The HMRC figures are meaningless without context. I have asked my professional bodies (ICAEW and CIOT) to ask HMRC for clarification.
It also happened to me. I rang again and made a Subject Access Request which they have promised to respond to. I want to see what excuses appear to justify their behaviour.