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MTD ITSA: Your questions answered – part 2

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Rebecca Cave answers more of the fundamental questions about MTD ITSA, including what needs to be submitted, when, by who and what HMRC will do with the data.

24th Aug 2021
Tax Writer Taxwriter Ltd
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What are the basic requirements for MTD ITSA?

There are four requirements for MTD ITSA (draft reg 3):

  1. record business transactions in a digital manner

  2. preserve those records for the defined period

  3. provide a quarterly update to HMRC

  4. provide an end of period statement (EOPS) to HMRC 

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Replies (119)

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By Paul Crowley
24th Aug 2021 14:31

So
Confirmed
HMRC will not use or even need the reports prior to final version at normal annual filing deadline
The tax report likely to be damaging not helpful as all trades and rent income attempting to be taxed separately
How many personal allowances?

Thanks (6)
Replying to Paul Crowley:
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By Open all hours
25th Aug 2021 08:22

In three randomly selected cases I have tested the quarterly submissions would have overstated the taxable income by 18%, 23% and 41% respectively.
Please can we stop this madness?

Thanks (14)
Replying to Paul Crowley:
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By Rgab1947
25th Aug 2021 10:12

There first change will be to get quarterly tax payments. That IMHO is the point of the whole exercise. They could easier just made taxpayers pay the last years tax in quarterly payments as a POA.

What is the point of entering estimates or garbage to then "reflect" the potential tax that may become due. The taxpayer knows, sales up more tax than last year, lower sales, less tax.

What a shower and all instantly applied. In one fell swoop. Good luck with that.

Thanks (6)
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By Hugo Fair
24th Aug 2021 15:16

Sorry Rebecca, don't shoot the messenger and all that, but ...

1. "the longer the delay between the transaction and being recorded digitally, the greater the risk of loss or corruption of data"
There may be an increase of lost transactions (although it would be more believable if HMRC quantified this, preferably supported by some evidence) ... but what on earth has 'corruption of data' got to do with it? This is just another HMRC soundbite with absolutely no basis in fact.

2. "This means the data should not be retyped or copied by human hand once it has entered the system."
Yet more meaningless drivel (from HMRC). Are we really meant to believe if an item of data has been entered (whether imported or typed) incorrectly, that it cannot be 'retyped' correctly? Of course not, so what does it actually mean?

3. "It is in the EOPS that the accountant can make any adjustments for capital allowances, losses, reliefs, disallowable expenses, transactions that have been missed or double-counted."
The word 'adjustments' usually has a specific meaning (such that the before and after figures being adjusted can be identified); whereas I presume here it is a euphemism for unilateral replacement of figures (i.e. the 4 sets of quarterlies are obliterated by EOPS)? So what's changed from now?

4. "The quarterly submission will be used by HMRC to calculate an estimate of the business’s tax liability throughout the year, and that figure will be reflected back to the taxpayer"
It won't take long for the message to get out that you (the taxpayer) are best ignoring this in-year estimate (for obvious reasons), which means that's even more money being poured down the drain.
And if/when the move is made to requiring POA payments quarterly, then people will quickly learn how to 'game' the system ... a further waste of everyone's time and money!

So thanks for the neat summary, but HMRC have still not provided any clear raison d'etre for MTD - let alone explanation of benefits to the taxpayer - and now are failing to explain how it will actually work from the taxpayer perspective (which is not aligned with Treasury objectives).

Thanks (33)
Replying to Hugo Fair:
Quack
By Constantly Confused
26th Aug 2021 11:03

Hugo Fair wrote:

Sorry Rebecca, don't shoot the messenger and all that, but ...

2. "This means the data should not be retyped or copied by human hand once it has entered the system."
Yet more meaningless drivel (from HMRC). Are we really meant to believe if an item of data has been entered (whether imported or typed) incorrectly, that it cannot be 'retyped' correctly? Of course not, so what does it actually mean?

Speaking from a VAT point of view, I look over the books prepared by juniors and at first they were re-typing figures from one page to another and there were always errors. They have now been steered to use formulae and links and the error rate has plummeted.

In terms of error prevention, the best way is to put a number in once manually and let the system move it where it needs to. The system doesn't make errors (ha! says my luddite side), but every time we humans type something it introduces the potential for an error. In the good old days I used to have to summarise figures to a spreadsheet then manually type them onto the return with my typewriter. That extra step (I have no doubt) led to errors on tax returns because we go number blind after a while and transpose numbers, miss decimals and all sorts of other things.

Of course you still have to get the formulae right...

#Disclaimer#
The above text should in no way be taken to construe me actually approving of a HMRC change, no matter how much I agree with an aspect of it.

Thanks (0)
Replying to Constantly Confused:
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By Hugo Fair
26th Aug 2021 12:23

I don't dispute your comments ... indeed they are undoubtedly correct.

BUT you're missing the point I was trying to make when I said "Are we really meant to believe if an item of data has been entered (whether imported or typed) incorrectly, that it cannot be 'retyped' correctly?"

As an (ex-) systems designer, I'm fully behind the concept of a single point of data entry and not changing/correcting such a value further 'downstream' ... but that requires a much more complex system (than the approach being promoted by HMRC) to manage corrections made at the source point and their subsequent impact on data that has already been processed 'downstream' by HMRC.

Or, if you take HMRC's guidance literally and forbid any change to source data already submitted (which is actually an impossible edict), then you need even more complex procedures & routines just to submit/process these corrections ... see EYU and its eventual replacement for a lesson in how not to do this!

Thanks (1)
Replying to Hugo Fair:
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By Jo Nokes
26th Aug 2021 13:05

I really enjoy your contributions, Hugo. You've raised a point I was only dimly aware of. When we file an RTI for a month after having amended a previously filed month, I understand that it is only the cumulative figures that HMRC takes note of, so changing the previously filed numbers doesn't matter. This is where I am lost. When we file the third quarter's figures under MTD, will it just consist of the numbers for that specific quarter, to be accumulated by HMRC, or will the filing be the cumulative total. After all, we are not filing individual transactions. So does it matter if an earlier number was corrected? Given how close this is to inception, and how strongly the software houses are promoting the solutions, I take it my question can be simply answered (I hope)

Thanks (0)
Replying to Jo Nokes:
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By johnjenkins
26th Aug 2021 13:24

It appears we have to do an amendment to the updates to get to the correct figure for tax liability. So if the cumulative figure is £20k and the real figure is £15k you put in -£5k to get the figure right.

Thanks (0)
Replying to johnjenkins:
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By Jo Nokes
26th Aug 2021 13:35

Oh dear, when I'm checking over my client's records in Xero or QB, if I see an error in a posting, I just edit it. I just can't see how the method you suggest can be implemented at all. That reminds me of the EYO, where you worked out and posted the difference. Surely that can't be done in a normal bookkeeping package, can it?

Thanks (0)
Replying to Jo Nokes:
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By johnjenkins
26th Aug 2021 13:45

Instead of editing you journal. Don't forget someone could put a transaction date prior to the quarter that has already been sent. One big journal aptly named EOYMTDADJ.

Thanks (0)
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By amycollier2893
24th Aug 2021 15:33

'Some form of data needs to be submitted each quarter'.

All the right digits but not necessarily in the right order?

This maybe is going to be fun after all.

Thanks (7)
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By Geoff56
24th Aug 2021 15:52

And the point of all this, is what exactly?

Thanks (14)
Replying to Geoff56:
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By johnjenkins
26th Aug 2021 13:25

To give us something to moan about instead of the weather and lockdown.

Thanks (2)
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By bluebaron
24th Aug 2021 16:15

The data does not need to be accurate??!! What on earth is the whole point of the thing then..??!!! This gets evermore ridiculous. Does HMRC think it is April Fool's Day or something...

Thanks (13)
Replying to bluebaron:
Tornado
By Tornado
24th Aug 2021 16:47

"Does HMRC think it is April Fool's Day or something..."

The trick is to ensure that we do not all end up being the fools and it would be foolish to believe that all of this will actually work!

Thanks (6)
Replying to Tornado:
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By bluebaron
24th Aug 2021 17:28

You are certainly right there! It's really going to go pear shaped...although that still won't deter HMRC from bringing it in..!

Thanks (4)
Replying to Tornado:
ghm
By TaxTeddy
25th Aug 2021 07:17

Agreed.

Having read what is actually required I am even more relaxed about the whole process than I was previously. Any more relaxed and I will be horizontal.

Clearly, most of our clients won't need any software, but we will just agree with them either to receive their quarterly papers or for us to prepare an estimate based on what we know during the year and file a quick and dirty quarterly report.

Job done.

Thanks (3)
Replying to TaxTeddy:
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By Rgab1947
25th Aug 2021 10:17

Good idea. Take last years figures, divide by 4, submit each quarter then the 5th one you add or subtract from what you submitted.

It maybe a doddle after all!

Thanks (4)
Replying to Rgab1947:
Quack
By Constantly Confused
26th Aug 2021 11:05

Rgab1947 wrote:

Good idea. Take last years figures, divide by 4, submit each quarter then the 5th one you add or subtract from what you submitted.

It maybe a doddle after all!

It is starting to sound that way...

Thanks (0)
Replying to Constantly Confused:
joe
By Smokoe Joe
27th Aug 2021 09:17

Surely just get them to tell you the quarterly turnover and pro-rate last years expenses then do the usual year end figures?

Should be able to build a simple spreadsheet to capture and do this!

Thanks (0)
Replying to Rgab1947:
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By Peter-S
27th Aug 2021 11:25

But even submitting this meaningless drivel requires time. I'm guessing we might need 150 hours each filing quarter to submit basic stuff for our clients. Some of it may even be accurate depending on the client but the point is this is an extra month's work 4 times a year for no benefit to anyone. As I have asked HMRC, where does that time magically come from?

Thanks (0)
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By GHarr497688
24th Aug 2021 17:53

So am I correct :
Client keeps records on a computer or Accountant puts records on computer these can be either estimated or real time.
A filing of these figures are quarterly and can contain multiple errors without penalty.
At the end of the year either the client or the accountant can alter the figures for year end adjustments and any errors made within the year.
Tax will be payable as it is now.
__________________________________________________

The problem:
Many Clients can't use computers or understand Accountancy principles.
When the Accountant or the Clients sends unchecked records to HMRC they will most probably be wrong of the Client has produced them or unaffordable to the client due to the time taken to complete the book-keeping if the Accountant produces these.
At the end of year the inaccurate records produced by the client on multiple different software packages will be impossible to correct with the amount of accuracy using traditional manual methods.
If the Accountant starts to enter each transaction on Software then the cost to the client will be far higher than now - a risk of standard of record keeping dropping is most likely.
If estimates have been used then confusion and inaccurate figures are likely to be worse than before.
Leaving a computer to do the thinking will lead to high risk of error "garbage in garbage out" is the commonly used term.
HMRC will be unaware of multiple inaccurate returns as they are not seeing the data behind the filing.
The worse affected will be the most vulnerable group - elderly , mental health issues , lacking in education and lower income groups or a mix of all.
__________________________________________________Result:
Inaccurate Returns.
Inaccurate Tax Payments.
Increased costs.
Risks to Lenders.
Risks to business purchasers.
Risks of HMRC enquiry.

Not one aim of MTD will be met.

Thanks (7)
Replying to GHarr497688:
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By NotAnAccountant2
25th Aug 2021 05:45

GHarr497688 wrote:

So am I correct :
Client keeps records on a computer or Accountant puts records on computer these can be either estimated or real time.
A filing of these figures are quarterly and can contain multiple errors without penalty.

Do you need, post event, to be able to justify the quarterly submissions?

Because if you record the data as it happens but later notice that you typed 2100 instead of 1200 for an invoice then correcting the figure will change what you should have submitted.

So possibly the best solution is to do the quarterly submissions from last years data as 'estimates' and otherwise completely ignore that part of MTD. And hopefully there will be no changes to the older records from last year so the justification is easy.

Can you submit your estimates early? That would mean you could submit the data on 6th April and then change it later if necessary (a year ago the sandbox api let you change/delete a periodic submission)

Thanks (0)
Replying to NotAnAccountant2:
ghm
By TaxTeddy
25th Aug 2021 07:24

It occurs to me that it might be best to keep a separate reporting spreadsheet for the MTDIT quarterly reports. Otherwise, the tsunami of year end journals could get out of hand.

So the "quick and dirty" spreadsheet for quarterly reporting - and then do it properly at the year end as you would normally do.

Not ideal, I agree, but probably the lowest cost solution.

Thanks (0)
Replying to TaxTeddy:
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By GHarr497688
25th Aug 2021 09:03

I can't see the point in keeping inaccurate digital records to be filed each quarter to then be corrected at the end of the year when no changes in the payment of tax in January and July are in legislation. I cant understand a system that allows a taxpayer to estimate records through the year opening up manipulation of these records to reduce the estimated tax demand , it would be even more illogical as what's the point in estimating a tax bill that's not being paid. Not only will taxpayers be confused with "on account" payments in the year they are going to be even more confused with inaccurate in year estimates. HMRC have been sold this by Software houses who have said that their products are easy to use , data entry from phone , press the button send the accounts , software reduces errors , taxes sorted. Of course they would as they want the monthly subscription from all these taxpayers. I notice that the report back in 2015 to Government did NOT engage with Accountants instead the private research organisation consulted the IT companies. Given that the tax system could be compromised by the new system ,no adequate trials have been understaken and the amount of negative comments on this site HMRC could save face by allowing a choice rather than a mandated system .

Thanks (1)
Replying to GHarr497688:
Tornado
By Tornado
25th Aug 2021 09:29

'Of course they would as they want the monthly subscription from all these taxpayers.'

I remember reading somewhere, some time back at the beginning of MTD, that this was going to be a bonanza for the software companies for obvious reasons but also because for every new subscription gained, the value of their Company would increase by 10 times the value of the subscription. I may have remembered this incorrectly but I am sure a representative of a software company will put me right if I am wrong.

The timebomb waiting to happen, of course, will be when these companies become so valuable that the owners finally sell out to the highest bidder - from anywhere in the world.

Thanks (0)
Replying to TaxTeddy:
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By NotAnAccountant2
25th Aug 2021 10:31

TaxTeddy wrote:

It occurs to me that it might be best to keep a separate reporting spreadsheet for the MTDIT quarterly reports. Otherwise, the tsunami of year end journals could get out of hand.

So the "quick and dirty" spreadsheet for quarterly reporting - and then do it properly at the year end as you would normally do.

Not ideal, I agree, but probably the lowest cost solution.

What I'm worried about though is the "digital link".[1]

If your client gets an invoice for 1600 but enters it as 6100 into their quarterly system reporting and then gives you their spreadsheet plus the bag of receipts to do the year end stuff, will you have to start from that 6100 figure (that you instantly realized was rubbish because this client never spends more than 2K at a time with anybody)

Worse, from your PoV, the client might already have changed that 6100 figure to 1600 because it was so obviously wrong, and then you'll be left scratching your head trying to work out where that 4500 has come from that they submitted in the quarterly figures.

In the worst case, what you might end up with is doing the accounts as you do now, and then generating a set of journals to unwind all the clients entries and regenerate them from your system so that the "digital link" is preserved to the original data that was submitted quarterly.

That's why I seized on "estimated" - because it's trivial to keep an estimate away from any "digital link" for the current year. Safest of all might be to submit quarterly estimates based on the same quarter two years ago, hopefully all of that data is completely finalized and will not change. Then if HMRC want to see the "digital link" to the current quarter submission you just show them the calculation for the quarter two years ago and how that data was uploaded to the API.

[1] For what it's worth, I keep my spreadsheets in a system called "git". It's normally used for computer source code but what it means is that I can return my spreadsheet to any point in time where I saved it to git. I don't always bother to push it to git after every change but I could. Just saving to git is a very simple operation, the complexity is only necessary if you want to view older entries (and for spreadsheets there's no easy way to say what changed other than to inspect the two versions) but it does provide a simple way to provide an audit trail that is free and extremely well supported.

Thanks (0)
Replying to NotAnAccountant2:
Tornado
By Tornado
25th Aug 2021 08:37

'So possibly the best solution is to do the quarterly submissions from last years data as 'estimates' and otherwise completely ignore that part of MTD'

This sounds like a good idea to me and would solve a lot of potential problems with this ridiculous system.

Thanks (0)
Replying to GHarr497688:
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By alialdabawi
25th Aug 2021 10:49

GHarr497688 wrote:

So am I correct :

Not one aim of MTD will be met.

Incorrect. One aim will be met: 'Our vanity project has been implemented'

Thanks (0)
Tornado
By Tornado
24th Aug 2021 18:19

Thanks once again to Rebecca for clearly highlighting what a nonsense all of this is. We already have an excellent well established system of tax administration called Self-Assessment which could have easily been fine tuned and improved to get the most out of it.

MTD is so badly thought out that I don't think it can EVER work anywhere near as well as the current system of Self-Assessment.

As I mentioned elsewhere, I don't think it is actually our problem to make MTD for ITSA work, it is entirely and solely the responsibility of HMRC. In my view, this is never going to work in its present format so I expect we will see a lot of back-tracking by HMRC and a lot of uncomfortable wriggling from them as a body over the next year or so, and then a massive climb down near to April 2023 when it all becomes a voluntary requirement or is delayed for several years. How else are the tax revenues going to keep coming in when a large proportion of the 4 million or so that will be required to operate MTD for SAIT have not the slightest clue as to what is going on.

Thanks (9)
Replying to Tornado:
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By philaccountant
25th Aug 2021 10:17

" In my view, this is never going to work in its present format so I expect we will see a lot of back-tracking by HMRC and a lot of uncomfortable wriggling from them as a body over the next year or so, and then a massive climb down near to April 2023 when it all becomes a voluntary requirement or is delayed for several years."

I hope you're right but I think you're being overly optimistic. HMRC's starting point is to get everyone inside the new system. Then they will start insisting on transaction level detail being submitted every quarter and monthly payments of tax.

I also expect the large tech companies are selling them some AI driven nonsense that will claim to detect fraud, (possibly before it's even happened, such are the wonders of AI!) as long as they have enormous amounts of transaction data to trawl through.

It is a long game they are playing and this is just the opening salvo.

Thanks (1)
Replying to philaccountant:
Tornado
By Tornado
25th Aug 2021 11:07

'I hope you're right but I think you're being overly optimistic. HMRC's starting point is to get everyone inside the new system. Then they will start insisting on transaction level detail being submitted every quarter and monthly payments of tax.'

This is the theory, but in practice they will not be able to Police this system. It is too complex and will throw up millions of errors that will have to be dealt with by staff that they do not have.

Do they know yet how many people are just typing VAT figures into a random spreadsheet, transferring those figures by .csv file to bridging software and submitting that as a VAT Return ..... I doubt it.

I remember back to Team Skills Training when a basic rule to remember was KISS ...... Keep It Simple Stupid. Something that seems to have been forgotten by some of today's teams.

The fact is that it takes weeks, months or sometimes never, for HMRC to answer letters, or as in the case of two clients whose 2021 Tax Returns were submitted in May, they will have to wait until the end of October 2021 for these Returns to be processed because HMRC records are unreliable and the Return has to processed manually.

There is NO WAY that HMRC are going to be able to deal with the complexities of MTD for ITSA. They are incompetent and it is just not going to happen.

Thanks (0)
By ireallyshouldknowthisbut
24th Aug 2021 19:34

And I get a hard time on here for advocating MTU as a commercial approach to this shambolic project. First 4 failures to file won't result in a fine either. Whole thing is a very expensive joke.

Thanks (0)
Replying to ireallyshouldknowthisbut:
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By Paul Crowley
24th Aug 2021 22:28

"And I get a hard time on here for advocating MTU as a commercial approach to this shambolic project."

Not from me
After all HMRC started this pointless excercise and if you remember the aim was claimed to be "Good news, taxpayers no longer need to prepare an annual tax return"
Agreed they now need to submit a minimum of 6 tax related returns
If clients agree I may submit 4 estimated income only returns. Starting in the second year. At least by then all the Start up, whoops never thought of that errors should be fixed.
The realtime CGT on domestic had JUST SO MANY
Refunds, ammendments, muliple properties, forgetting that a tax year ends.
That one really should have been easy and an exemplar
just one easy to calculate tax with hardly any users. We only had four in the full year.

Thanks (0)
Replying to ireallyshouldknowthisbut:
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By AdamMurphy
24th Aug 2021 22:30

That'll shut up those who give you a hard time. HMRC now say you CAN make it up!

I will be using the previous accounts, divide by 4 then submit once a quarter, charging the clients a small admin fee.

Thanks (0)
Replying to AdamMurphy:
ghm
By TaxTeddy
25th Aug 2021 07:29

MTU is clearly the way to go, it's just a question of having clients feel comfortable with it, which I am sure most of them will when they realise that there are absolutely no consequence of what is filed in the quarterly reports.

No, the bigger problem as I see it is that I will be running two systems in parallel - MTDIT for the clients who have relevant income and 'old' self-assessment for all the others.

What fun.

Thanks (0)
Replying to TaxTeddy:
By ireallyshouldknowthisbut
25th Aug 2021 08:54

TaxTeddy wrote:

MTU is clearly the way to go, it's just a question of having clients feel comfortable with it, which I am sure most of them will when they realise that there are absolutely no consequence of what is filed in the quarterly reports.

No, the bigger problem as I see it is that I will be running two systems in parallel - MTDIT for the clients who have relevant income and 'old' self-assessment for all the others.

What fun.

Re the two systems this seems to be the biggest issue. Moreover clients who are signed up to the new mess, but cant actually file the year end "new SA" as there is some obscure box they need to fill in which HMRC have not gotten around to programming, so you have to send in a manual adjustment. This seems to happen a lot. Look at the *CURRENT* list of exclusions in a well worn system that has been in place for over 20 years. Keeping well out of it for as long as possible is going to be the most commercial approach. My job is to compute my clients tax bill and deal with HMRC in the most efficient manner. It ends there and does not extent to facilitating HMRC vanity projects.

Thanks (0)
Replying to ireallyshouldknowthisbut:
ghm
By TaxTeddy
25th Aug 2021 09:06

At the moment I'm trying to identify which clients will be required to file quarterly reports and which remain on the normal system - so that I can see the impact on our micro practice.

I was just looking at the draft regulations and it seems that the £10k de minimis figure is based on the tax year two years previously to the one for which you need to file the quarterly reports - what??

Thanks (1)
Replying to TaxTeddy:
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By ClaireR75
25th Aug 2021 15:42

Quick question - is the £10k net profit or turn over ? - thanks

Thanks (0)
Replying to ClaireR75:
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By sammerchant
27th Aug 2021 11:35

I think it is turnover (or gross rental), which is what makes this such a silly exercise, with the personal allowance over £2,000 greater and unlikely to be reduced.

Thanks (0)
Replying to ClaireR75:
Paul Beck
By paulbeck
08th Sep 2021 22:02

@ClareR75. The £10K threshold is combined (gross/turnover) revenue for all property businesses and self-employment businesses. So if my client has a UK rental property that generates her £6k, an e-bay stamp selling business with total revenue of £5k, and this was two years ago, in the current year as the two combined business income is £11k, over the £10k threshold. The personal tax individual client needs to register for ITSA. Spouses can switch revenue, but for simplicity, I hope this helps clarify if an individual client will need to register for MTDfITSA come 6 April 2023. You register the individual for ITSA, but HMRC needs to know about all the businesses falling under that individual.

Thanks (0)
Replying to paulbeck:
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By johnjenkins
09th Sep 2021 08:58

I presume that if the e-bay stamp selling business is a Limited Company then HMRC will take away the Limited Company status IRMTD.

Thanks (0)
Replying to johnjenkins:
Paul Beck
By paulbeck
10th Sep 2021 09:34

@johnjenkins, yes I agree. The onus is on the individual (client) to register for MTDfITSA. If two years previously, the client had combined revenue over £10k for both businesses, but before they changed over to MTDfITSA, the stamp business was incorporated. They are not forced to register for ITSA. At least, that is how I see it. Always worth trying to check with HMRC.

Thanks (0)
Replying to ireallyshouldknowthisbut:
Tornado
By Tornado
25th Aug 2021 09:14

'Keeping well out of it for as long as possible is going to be the most commercial approach'

I can agree with this. 'kevinringer' suggested elsewhere applying for exemption for as many clients as possible, so that might be a good way to keep many clients out of the system for a long time or perhaps for ever. This is certainly one avenue I will be exploring later when the situation is clearer after HMRC have done their initial back-tracking and U-Turns.

Thanks (2)
Replying to TaxTeddy:
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By Swabber
25th Aug 2021 11:54

''MTU is clearly the way to go, it's just a question of having clients feel comfortable with it...''

I am thinking that this could be the bigger problem, advising clients to ignore the record keeping requirements whilst maintaining my professional image and authority to ensure their compliance in all other matters.

Thanks (0)
Replying to Swabber:
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By NotAnAccountant2
26th Aug 2021 07:27

Swabber wrote:

''MTU is clearly the way to go, it's just a question of having clients feel comfortable with it...''

I am thinking that this could be the bigger problem, advising clients to ignore the record keeping requirements whilst maintaining my professional image and authority to ensure their compliance in all other matters.

Putting words into people's mouths is probably a really bad idea for me but isn't the real principle of "MTU" that you tell your clients:

Just do the best you can for the quarterly submissions. If you get it wrong, even if you get it very wrong, it doesn't matter at all as it will all be sorted out at the EoY submission and at least for now it will have no impact on when or how much tax you have to pay. Because it's going to be a lot of extra work for everybody, I'm afraid I will have to charge you for my time if you call me up for help with the quarterly submissions so I'd recommend you just make a best guess (and if you want, make a record of all the things you guessed on and we'll review them together at the end of the year)

And this might actually be a VERY good policy to follow. One of two things will happen. Either the majority of your clients will get most of it right, and HMRC will be vindicated that this really isn't a big deal for clients, or the quarterly data will be an utter shambles and HMRC will have to accept that the man on the clapham omnibus just isn't capable of handling it.

Thanks (0)
Replying to NotAnAccountant2:
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By Swabber
26th Aug 2021 12:26

I see what you are saying, and am amused by the idea that MTU now has principles! It is definitely taking on a life of its own.

I am coming at it from a different angle in that I am looking to handle the clients' quarterly submissions and boost up my fees. But where possible I would like to cut out the bit where I have to ask them for their quarterly figures - whether in digital format or in a shopping bag!

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Replying to AdamMurphy:
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By Cathy Milligan
25th Aug 2021 09:56

Me too

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By AdamMurphy
24th Aug 2021 22:24

I'm at a loss for words. Well that's not true, but not words I can post here.

There's no need for accuracy of figures. So basically we will need to spend time each quarter submitting Johnny Ball Think Of A Number figures just to meet the requirement of submitting something - ANYTHING! - then prepare accounts at the year end as normal.

Unbelievable.

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By AdamMurphy
24th Aug 2021 22:54

Going to get myself one of these before 2023, will only need to be paid in seed and will do the job that HMRC require for their new system
https://www.youtube.com/watch?v=T6Qlkgb7t9Y&ab_channel=Birb

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