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MTD ITSA pilot: Too little too late

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The expansion of the criteria to join the MTD ITSA pilot is welcome, but there is a long way to go and many hurdles to overcome before we reach digital nirvana.

20th Jun 2022
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The announcement that taxpayers with a wider variety of income sources would now be permitted to sign up for the Making Tax Digital for income tax self assessment (MTD ITSA) pilot was greeted with a slow handclap by the accountancy profession. 

The main gripes are the small choice of MTD-compatible software (just three products), which the taxpayer must subscribe to before joining the pilot, and the absence of any perceived net advantages of joining the pilot. 

The benefits of MTD for taxpayers – more accurate business records leading to fewer errors, and reduction in administration time – are the result of digitising their accounting systems, not digitising the tax they pay. 

Joining mid tax year

There is also some confusion about the joining date for the expanded pilot of on or after 6 July 2022, just after the end of the first quarterly period. 

At first sight this looks odd, as surely the taxpayer would have to comply with all the MTD ITSA regulations for an entire tax year, including keeping digital records. How would joining the pilot and starting to use MTD software part way through the year allow the taxpayer to meet this condition?  

What must be filed  

HMRC has confirmed to AccountingWEB that taxpayers who join the MTD ITSA pilot at any point before 6 April 2023 will have to report a full year of income and expenses under MTD ITSA for 2022/23, and submit all four quarterly updates for the year.

The filing date for the quarterly update for the first quarter of the 2022/23 tax year is 5 August 2022. If the taxpayer joins the pilot after that date, they will still have to submit the quarterly report for the first quarter, even if it has to be submitted late.   

Late-filing penalties

No late-filing penalties will be applied to taxpayers who submit their quarterly updates late during the MTD ITSA pilot period. This is not due to a concessionary “soft landing” applied by HMRC, but because the new penalty regime for late filing for MTD ITSA reports does not come into effect until 6 April 2024.  

Compliance with the new penalty regime is therefore not being tested as part of the pilot, so it is hardly a real-world simulation. 

Digital records 

The taxpayer is required to keep their business records in a digital format under the Income tax (Digital Requirements) Regulations 2021 (SI 2021/1076), and this condition must also be met for those taking part in the MTD ITSA pilot. 

However, reg 5 of SI 2021/1076 requires the taxpayer to record a digital record no later than:

  1. the quarterly deadline for the quarterly period in which the digital record falls; or
  2. immediately before the relevant person provides the quarterly update for the quarterly period in which the digital record falls,

whichever is the earlier.

So the taxpayer is only required to have a digital record of their transactions by the due date for the quarterly update. This means that all the digital records can be created once per quarter, just before the quarterly filing date, they do not have to be recorded in real time.     

In the MTD ITSA pilot there will be no penalties for creating the digital records late, and indeed if the taxpayer joins the MTD pilot part way through the year, they will have to somehow transfer records of the transactions for the part year already passed into the MTD compatible software. 

Ineligible for pilot

The list of taxpayers who cannot join the MTD ITSA pilot was expanded on 15 June 2022 to include all of the following taxpayers who:   

  • use an accounting period that does not end on 5 April
  • are bankrupt or insolvent, or who soon will be
  • owe tax to HMRC including debts coded out in their PAYE code 
  • have a time to pay arrangement with HMRC
  • have to pay income tax charges such as the HICBC or for excess pension contributions
  • are not up to date with their self assessment tax returns (it is not clear whether the 2021/22 tax return has to be filed before the taxpayer can join the MTD ITSA pilot)
  • are partners in a partnership
  • are ministers of religion 
  • are Lloyds underwriters
  • are foster carers
  • are acting in a third-party capacity for the taxpayer including nominees, solicitors, insolvency practitioners or trusted helpers. 

Waiting for MTD Godot 

I have been writing about MTD for over five years and looking back at my prediction of the road ahead for MTD  written in 2017, it’s disappointing to note that many of the staging posts we were waiting for then are still to be achieved.

As Andrew Jackson has so clearly argued, we need a clear roadmap for MTD ITSA. We can’t sit here forever waiting for the MTD Godot that never arrives.

Replies (58)

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By Hugo Fair
20th Jun 2022 08:43

Thanks, Rebecca, not just forthe status summary ... but for teasing out aspects that seem to have escaped notice before like:
"So the taxpayer is only required to have a digital record of their transactions by the due date for the quarterly update. This means that all the digital records can be created once per quarter, just before the quarterly filing date, they do not have to be recorded in real time."

This is of course the antithesis of what HMRC comms promote as the basis of the sole promised benefit to the taxpayer (accuracy through timeliness). So what are we left with as an incentive?

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Replying to Hugo Fair:
By Charlie Carne
20th Jun 2022 10:05

As I have consistently argued, this is not for the benefit of the taxpayer. It's for the benefit of HMRC. But I don't have a problem with that. There is no reason why the tax authority should not insist upon a system that makes it easier for them to audit the taxpayer's records. Just look at the IRS, who have numerous forms that require completion to aid in that purpose (albeit, those are manual and create tortuous, additional work for US businesses and their accountants). My problem is with the incompetence of HMRC to deliver this project effectively, on time and with a clear roadmap.

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Replying to charliecarne:
Morph
By kevinringer
20th Jun 2022 10:29

Is this for the benefit of HMRC? Currently most Tax Returns are filed digitally already. Look at HMRC's most recent digital-regime: 30/60-day CGT. This has massively increased HMRC's workload yet not a penny extra tax is collected.

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Replying to kevinringer:
By Charlie Carne
20th Jun 2022 11:53

It's about making the accounting records digital, not about the filing of tax returns. As I wrote, they want a "system that makes it easier for them to audit the taxpayer's records". Filing an annual SATR or a CGT return within 60 days has nothing whatsoever to do with that.

Oh, and filing and paying CGT within 60 days greatly advances the payment of the tax; up to 19 months earlier than by the old 31st January deadline.

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Replying to charliecarne:
Morph
By kevinringer
20th Jun 2022 12:45

60-day CGT may result in the CGT paid earlier, but is the cost of collecting worth the cost to HMRC? To date 100% of my 60-day CGT cases have been digitally-excluded, so HMRC have had to manually issue a PPDCGT and manually process it and manually issue a demand. I would have filed online because it would take less of my time, but none of my clients have been capable of carrying out the digital handshake. None of the CGT generated has been huge: most has been less than £1000. I would argue that the HMRC cost of obtaining the CGT is considerably more than the benefit of obtaining it early.

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Replying to charliecarne:
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By Hugo Fair
20th Jun 2022 13:06

"My problem is with the incompetence of HMRC to deliver this project effectively, on time and with a clear roadmap" ... well there we are in full agreement.

FWIW I believe that when treating an addiction the 1st rule is that the addict "has to admit their problem and *want* to change"?
In which case we appear to have a situation where HMRC is addicted to a concept that is based on so many public lies that they've lost touch with their own original intentions (which I believe were, internally at least, more about cost reductions in-house than improved reviews of taxpayer records).

And they've no interest in wanting to change, because a pre-cursor to that is an admission of the problems (historical, current & planned) that they are culturally unable even to acknowledge, let alone accept.

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By Hugo Fair
20th Jun 2022 08:53

Also, in terms of the Pilot itself, there are many other unanswered questions that I've raised:

*What happens if a client who 'qualifies' for the Pilot then picks up a further income stream (of a non-qualifying type)?
* Conversely what happens if their combined income stream drops (deliberately or otherwise) below the mandated threshold?

* Does joining this Pilot (as per the RTI one) commit the taxpayer irrevocably to staying on that path ... or can they drop out during the year if things become too uncertain/arduous for them?

* Where is the central hub (sourced and run by HMRC) whereby pilot employers and agents can publicly share questions, issues and (who knows) solutions?

I know these are not 'your problem' but they are exactly the sort of questions asked by clients when considering joining previous HMRC Pilot schemes - and are equally relevant this time.

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By ireallyshouldknowthisbut
20th Jun 2022 09:14

if this was HS2 they haven't even worked out the route yet, or the destination and expect it to just materialise based on some rules which don't work in the real world.

I imagine there is a room of people somewhere bought up on TV talent shows who think all they need to do is close their eyes and really believe, and it will happen.

Because that is about all we have to go on right now.

I am done with this failed project.

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Replying to ireallyshouldknowthisbut:
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By MCV71
20th Jun 2022 14:53

In terms of talent show parlance "It's a no from me"

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By Jo Nokes
20th Jun 2022 09:19

What amazes me about this whole thing is that, to date, the arguments only seem to be between professionals, as seen on this website, with mainly negative views. There are many times more unrepresented than represented tax payers. Are we to conclude that they are more savvy than our poor ignorant clients, and will be happy to cope with MTD? Or is it the case (which I am expecting), that there will be a huge backlash against HMRC when this goes public?

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Replying to Jo Nokes:
Morph
By kevinringer
20th Jun 2022 10:05

I suspect the unrepresented taxpayers either (1) know nothing about it at all or (2) have seen the QuickBooks adverts on TV and been persuaded it's a doddle.

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By JustAnotherUser
20th Jun 2022 09:21

I'll check back in when were at [141 comments] for the usual afternoon chuckle.

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By Ben Alligin
20th Jun 2022 09:45

Well after 5 years we have made it as far as Act II of MTD-ITSA.

Lucky and Pozzo (aka HMRC and Giles M) are now dumb and blind respectively, and Godot (6th April 2024) never turns up - a perfect analogy!!

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By johnjenkins
20th Jun 2022 09:47

This just gets better and better. Great article Rebecca.

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By Nebs
20th Jun 2022 09:52

Making Tax Difficult.

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Replying to Nebs:
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By Paul Crowley
20th Jun 2022 18:43

Making tax disingenuous

HMRC claiming it is going to save businesses money despite being aware of the opposite
Sage joining in as well

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Replying to Paul Crowley:
Morph
By kevinringer
20th Jun 2022 20:53

It's actually Making Transactions Digital whilst at the same time Making Tax Difficult.

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Morph
By kevinringer
20th Jun 2022 10:03

Do we know how many taxpayers will be mandated to comply with MTD ITSA? If so, what %age of those taxpayers could join the pilot. I know that whatever the figure, that actual %age in the pilot is less than 1% which is a dreadful result considering the pilot has been running for 5 years.

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By PK Busness Services
20th Jun 2022 10:09

HMRC are in cloud cuckoo land
they still havent sorted out the issues with MTD VAT yet

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Morph
By kevinringer
20th Jun 2022 10:17

HMRC's MTD ITSA pilot is not a true pilot at all because it is not testing anything for a cross section of taxpayers. The pilot criteria is so narrow that I image only a fraction of taxpayers can participate. And because there's nothing in it for taxpayers other than increased cost/time/HMRC attention, why would they want to be crash-test dummies for the software industry and HMRC? The type of taxpayer willing to engage with HMRC in the pilot is not your typical taxpayer. I suspect the pilot participators are far more IT-savvy than the typical taxpayer.

If HMRC wanted to carry out a meaningful pilot, HMRC would identify a sample of taxpayers across all different types with all different combinations of income streams and different circumstances including the digitally-excluded, the digitally-challenged, the digitally-nervous and those who avoid HMRC like the plague.

HMRC needs to remember that MTD ITSA is the digitisation of transactions. HMRC seems to focus just on the API aspect of it, which should be straightforward. The difficulty I see with MTD ITSA is the resources required to accurately digitise the transactions. HMRC needs to pilot the entire end-to-end process that is MTD ITSA including the digitisation of transactions.

Unless HMRC pilot the entire MTD ITSA process across sufficient client types, the pilot will not achieve its goal. But I don't think HMRC are particularly interested in the pilot being meaningful. If it's anything like 30/60-day CGT, I don't think HMRC are interested it all and will launch 2024 no matter what state it is in.

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Replying to kevinringer:
By kenny achampong
20th Jun 2022 10:36

The pilot would only give a true indication of how it might work if they only open it on 5th July, especially in Scotland when that's the start of the school holidays and hundreds of thousands of taxpayers, book-keepers and accountants are heading off on holiday.

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Replying to kevinringer:
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By johnjenkins
20th Jun 2022 12:38

If I remember correctly there was no test or pilot for SA. I do remember many seminars with us local Accountants and members of the SA team where problems and solutions were discussed.

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Replying to johnjenkins:
Morph
By kevinringer
20th Jun 2022 13:20

It was a different HMRC when SA was introduced in 1996. In those days HMRC had local offices, so HMRC staff had regular contact with taxpayers. HMRC carried out investigations and regular VAT checks so HMRC knew what taxpayers were capable and incapable of. HMRC was led by tax people. The local tax office appointed one of their staff as our liaison officer and we were given her direct dial and could contact her about any SA issue. She took ownership of problems we reported, and would get a resolution or answer for us. As a result, though SA was the biggest change in tax for decades, it worked.

Today HMRC's movers and shakers are now focused not on tax, but on the medium of transmission/processing: IT. HMRC have next to zero contact with taxpayers, so HMRC assumes taxpayers are as IT competent as HMRC's movers and shakers. HMRC's movers and shakers have their ears tickled by the IT industry and are probably gullible enough to believe the QuickBooks TV adverts. HMRC have lost sight of their purpose: to collect tax. Why else do they no longer have taxpayer and have customers instead? The medium of transmission in 1996 was paper. Letting the IT people design MTD today is a bit like letting printing supplier design SA in 1996. Image the tax system the printers would have developed. It might have served the printing industry well but would have done nothing to make tax compliance easier for taxpayers, nor improved the collection of tax.

HMRC needs reminding what its purpose is and ask itself how MTD ITSA will improve life for HMRC and taxpayers.

Thanks (3)
Replying to kevinringer:
By Nebs
20th Jun 2022 14:35

Perhaps the solution is to scrap HMRC, divide all the costs up and pay them to accountants pro rata to the tax their clients pay, and let accountants investigate anyone they like (apart from their own clients) for no fees but for 50% of any extra tax they get.

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Replying to Nebs:
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By johnjenkins
20th Jun 2022 15:23

You're not far off the mark, Nebs. I've been saying for years that HMRC should just concentrate on collection and investigation and leave the rest to us. in fact that's what "agent strategy" was all about.

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By Yossarian
20th Jun 2022 10:51

Making Tax Digital; the pet project of a former Chancellor who left office almost 6 years ago, and who didn't appear to have much of a clue even when he was in office.

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Replying to Yossarian:
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By MCV71
20th Jun 2022 14:54

He had the voice of Piers Fletcher-Dervish from The New Statesman. And about as much common sense.

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Replying to MCV71:
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By Yossarian
20th Jun 2022 16:02

"..this spells the death of the annual tax return."

(mutters under breath) "To be replaced by the quarterly tax return".

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Replying to Yossarian:
Morph
By kevinringer
20th Jun 2022 16:47

From what I understand, MTD ITSA doesn't replace the annual tax return. There will still be one (though it's called a "final declaration" - a bit like how RTI removed the end of year return but replaced it with an end of year EPS and 52 in-year FPS). There is an End of Period Statement for each business. So a sole trader with a rental property will have (I think) 11 returns instead of 1. And if they don't have 31 March/5 April year end they will have more. What's not to like?

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By Homeworker
20th Jun 2022 11:32

"The taxpayer is required to keep their business records in a digital format under the Income tax (Digital Requirements) Regulations 2021 (SI 2021/1076)"
As most of my pensioner clients with lettings will be unable to keep digital records but will expect me to digitise them for them, I have asked before - how does this comply with these regulations? When MTD for VAT started and my elderly client with commercial lettings had to register I was unable to get exemption for him despite him having no spreadsheet capability, as they expected me to take this on for him (he keeps perfectly good paper records, which I work from). It was only when he wrote to them himself that they relented but there will be thousands, and not just pensioners, who will be unable to comply for various reasons.

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Replying to Homeworker:
Morph
By kevinringer
20th Jun 2022 12:40

You mention you were unable to obtain MTD VAT exemption for your digitally-excluded elderly client. I was able to obtain exemption for all my elderly clients who were mandated in 2019. So I wonder why HMRC decided to grant exemption for mine and not yours. I have submitted loads more exemption applications for the 2022 cohort but not received any responses yet. If HMRC were to suggest I should do the MTD for my clients I will fight it because the regulations do not require that I digitise for my client, they require my client to digitise and the regulations provide exemption if my client is unable. Otherwise, HMRC could refuse all exemption applications by telling all applicants they should hire an accountant or bookkeeper.

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Replying to kevinringer:
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By Geoff56
20th Jun 2022 13:07

Kevin, I have had precisely the following response from HMRC, to a request for exemption for a non-computer literate client:

"As an accountant (me) already compiles your (the client's) accounts, any extra cost incurred for relying on an accountant for MTD-compliance, can be considered an acceptable business expense."

I requested a review of that decision in September 2020. Despite numerous reminders and apparently 'lost' correspondence, the whole thing seems to have disappeared into a black hole. I am at my wits' end as to how to get a further reply from HMRC. My client's next return under the annual accounting scheme will be due soon. I have not yet signed them across to MTD.

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Replying to Geoff56:
Morph
By kevinringer
20th Jun 2022 13:49

Perhaps make a new application for exemption?

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By indomitable
20th Jun 2022 11:45

Why oh why do we let government waste resources and money on pet projects that not only, by past experience, are not fit for purpose but waste everyone else's time with no discernible benefit to the taxpayer or HMRC.

Government needs to sort out it's current issues:
-HMRC agent services account and agent account - a complete dogs dinner
-Answer the phones
-New CGT reporting - again a complete mess
-HMRC's habit of issuing assessments and passing to debt management when they don't even know if the tax is owing
-A website that is not only illogical it constantly takes you to the wrong place and is not integrated properly

Sort these basic issues out first before you even try and impose further nonsensical changes that benefit no-one

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By anthony stevens
20th Jun 2022 12:02

Perhaps we should follow the NUT approach and in effect go on strike and refuse to comply!.
The professional bodies have been woeful in defending us from this madness. I suspect they have no idea of the real world accounting as they are driven by large firms with large clients who probably will not have a problem with any form of reporting.( apart from Audit reports).

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Replying to anthony stevens:
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By indomitable
20th Jun 2022 12:26

Don't get me started on the ICAEW and the other bodies which are totally ineffective in lobbying government, they should be far more militant in my view

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By tedbuck
20th Jun 2022 12:31

Same old, same old.

HMRC cannot even do what they now do competently. The reason - I should think most of the competent staff took one look at the people at the top and left to work in the real world.
So HMRC's services are basically in a total shambles. They 'correct' correct SARs and make them incorrect, they won't repay over paid and repayable tax, they don't answer letters, you cannot telephone them, in fact nothing works. MTD is an attempt to replace people with computers which just won't work for various reasons but HMRC just plough on because they are too involved in it to give up. At the end of the day it won't work because it is far easier to make errors on computer bookkkeeping programs than by hand and who is going to spot them? Well we may but we may not act and we may not have the time and if clients are crafty they will hide their fudges in such a way they may not be immediately visible. Who will pay for our time? The client won't be too happy to see his/her bill double so they may DIY and we can all guess where that will lead - personal bills claimed, no add backs and cash sales being omitted, motor expenses charged in full and so on. Will HMRC see this? Highly unlikely as they don't have staff trained to do so - I saw one enquiry case a while back where the HMRC man was so incompetent and gullible that you just wouldn't believe it and these are the 'experts'. HMRC must be out of their minds. The lunatics in charge of the madhouse.

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Replying to tedbuck:
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By Hugo Fair
20th Jun 2022 12:56

"MTD is an attempt to replace people with computers" ... spot on ... nail on the head!

It should be re-named ATC (automated tax collection) ... then at least there'd be an admission of the sole driving force behind it (a planned further reduction in HMRC staff costs), instead of all the made-up guff about benefits.

Problem is that would entail either wilful stupidity or having to admit the lauded improvement in tax collection is bolloxs ... as the efficiency (and, yes, amount) of tax collection will be sacrificed on the altar of 'achieving' automation.

What those making policy decisions are blissfully ignorant about is that (unlike many automated systems) human beings (taxpayers and agents) will disagree with the results of automated tax calcs ... and so *more* systems AND people will be needed to handle / resolve those disputes.
It's one thing to give up and pay an undeserved parking-fine (to avoid the stress of trying to find a working braincell with whom to communicate the error) ... but people don't do that with tax (almost as if there was a principle at stake)!

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Replying to tedbuck:
By SteveHa
21st Jun 2022 11:04

tedbuck wrote:

..... They 'correct' correct SARs and make them incorrect, ...

And then ignore, or even in fact actively dispute TMA 1970 S9ZB(4) when you raise an objection.

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By roger brisley
20th Jun 2022 13:08

Why oh why are we still stuck with the historical absurdity of 5 April tax year end? Isn't now with all the changes to the tax system the opportunity to get away from this?

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By Ian McTernan CTA
20th Jun 2022 13:33

'The benefits of MTD for taxpayers – more accurate business records leading to fewer errors, and reduction in administration time –'

So going from not having to keep any records and only reporting figures once a year to having to do 5 reports a year, use a system they don't like or want and software where they can make endless mistakes as well as taking a lot of time and money will magically cut down on errors and reduce admin time?

What planet are these people on?

They do realise they are asking people with anything over 10k INCOME to do all this?

Until they provide free software, dozens of hours of free training for clients and a cash incentive to file using MTD, I can see no reason for any clients to get involved any earlier than they absolutely have to- and even then it will be 4 meaningless reports followed by an annual report with all the many adjustments required at year end.

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By PK Busness Services
20th Jun 2022 14:36

Do you honest think HMRC are going to issue refunds to CIS clients five times a year under MTD ITSA
dont be silly
but they will expect yu to pay unfront when each and every quarterly update goes in but they wont refund any monies until the confirmation statments are filled
i know exactly how much any of my clients are paying up front under MTD ITSA
pricely NOTHING

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VitalTax
By VitalTax
20th Jun 2022 16:41

"The main gripes are the small choice of MTD-compatible software (just three products)."

Rebecca, the HMRC software website is very confusing. All solutions listed as software in development are fully functional and were tested and demoed to HMRC, received production credentials and permission to submit data to HMRC internal system and are ready to be used in the pilot.

Our product VitalTax is already participating in the pilot, although it is listed as software in development at the moment.

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Replying to VitalTax:
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By Hugo Fair
20th Jun 2022 17:20

"very confusing" is a contender for understatement of the year!

HMRC Recognition for RTI (which is now merely self-certification in most cases) is updated on its page within 24-48 hours - so what's the issue with MTD ITSA?

Stating "Software in development: These products are currently in the process of gaining HMRC recognition" doesn't suggest availability for use in the Pilot - and certainly doesn't provide the sense of confidence sought by anyone thinking of signing up.

That page is HMRC shooting themselves in the foot ... as well as hardly being fair to you (based on what you've said)!

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Replying to Hugo Fair:
VitalTax
By VitalTax
20th Jun 2022 17:27

Completely agree.

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By Jo Nokes
20th Jun 2022 18:14

Rebecca, this is a welcome addition to the body of articles concerning the introduction of MTD for ITSA. I imagine that these are read by the powers that be in HMRC, but the few articles they have published here in reply were mostly regarded as risible, and not addressing members' concerns.

I believe that the professional bodies have been engaging in a dialogue with HMRC. Their major concern was (I think) to get HMRC to abandon the mandatory aspect, and go for voluntary adoption. After all, if the benefits were well known, adoption by the majority of taxpayers would be swift. We lack any recent input from the PBs to explain how the discussions are proceeding, I suppose that would be regarded as too sensitive, or simply breaking confidences. I think the PBs missed a trick when they started engaging, they should have stood back and waited to see what kind of mess was being introduced. It would have been good to see a major push back against the fixed quarterly filing, one of the major concerns to members in practice (although not such a concern to the unrepresented taxpayer). I'm not holding my breath

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Replying to Jo Nokes:
Morph
By kevinringer
20th Jun 2022 20:51

Jo, the pilot is in effect voluntary adoption and has a take-up of about 1 taxpayer in every million: woefully inadequate. Who in their right mind would voluntarily commit themselves to digital records, digital link, 5x tax returns a year for every business plus a final tax return? No, if HMRC wants to even stand a chance of a reasonable level of compliance, the turnover threshold has to be raised to a minimum of £100,000.

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By GHarr497688
20th Jun 2022 19:15

Real example: a client inherited four rental properties and lives on rental income he has a book and writes down in's and out's - not well educated and has hobbies , useless on a computer and can't even scan a document. Current system - after me chasing him he gets some manual records over in late December - I tot up figures in an hour and get his SA filed by mid Jan. His bill is £200.
New system : buy a computer - look into suitable software - pay for training to use a computer and basic accounts , get in touch with Accountant when struggling , file six times a year , realises records are wrong on computer - can't work out how to change so does nothing. Blame the computer and he gets a tax refund . Who is the joke on HMRC. Blame the computer.

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Replying to GHarr497688:
Morph
By kevinringer
20th Jun 2022 20:54

All these types of taxpayer would be solved if the turnover threshold was set at £100,000.

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Replying to kevinringer:
By Nebs
22nd Jun 2022 23:12

kevinringer wrote:

All these types of taxpayer would be solved if the turnover threshold was set at £100,000.

That will be the 11th hour compromise - HMRC will revise the joining threshold to the VAT threshold.

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