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MTD sign-up remains sluggish as deadline looms

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26th Mar 2019
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With the MTD deadline fast approaching, only a fraction of the UK business required to join MTD next week have registered and only two percent of accounting firms have registered any clients for MTD.

AccountingWEB readers are probably sick of being reminded, but here goes none-the-less: for VAT periods starting from 1 April 2019, most businesses above the VAT threshold will need to keep their records digitally and submit their VAT return using MTD-compatible software.

And yet, the take up seems remarkably slow. According to HMRC, over 70,000 businesses have already signed up to the new service. You don’t have to be a mathematician to see that’s well shy of the 1.2m businesses due to be affected by MTD.

The current run rate for MTD sign-ups is currently 3,000. With April 1 looming, it’s going to take a tidal wave to get everyone set up in time. Meanwhile, businesses aren’t the only ones that are lagging.

An FOI request by the cashflow forecasting app Float found that only two percent of accounting firms (that’s 1,679 agents) have registered any clients for Making Tax Digital, from an estimated 72,000 tax agents nationwide.

This seeming intransigence doesn’t gel with HMRC research conducted in December which showed that 83% of businesses familiar with MTD had “started to prepare”. According to Float’s CEO Colin Hewitt, businesses have been let down by a confusing sign-up process and “reactive rather than proactive” accountants.

“[Many accountants] won’t have done more than sending a few emails which will probably be sitting buried in inboxes across the country. While solutions like Xero and Quickbooks have been very proactive in telling their customers about MTD, it’s obvious from the data that businesses haven’t yet responded to the registration process required.”

A big question is around the approach HMRC will take with the mass of likely late sign-ups. Float’s Hewitt is confident that there will be “leniency with businesses who are late to register” and there will be a “step up the communications on what is required”.

Indeed, an HMRC spokesperson confirmed to AccountingWEB that it'll not be a late fine apocalypse. "April 1st is not a cliff edge for sign-ups – the first returns for most businesses under the new system won’t be due until August at the earliest," said the HMRC spokesperson. "We recognise that businesses will require time to become familiar with the new requirements." The spokesperson added that in MTD's first year, the tax authority will take a light touch approach to penalties. "HMRC will not issue filing or record keeping penalties where businesses are doing their best to comply with MTD."

But despite HMRC's merciful approach to onboarding, Float's Hewitt warned business need to get in gear. “To fulfil MTD requirements properly, businesses need to look at registration today if they haven’t already – embracing its adoption rather than fighting it. If you haven't reviewed your VAT process, methods and software, you should. Also, if your accountant isn’t able to advise on MTD now, this should be a red flag and it might be time to start looking for new representation.”

Replies (98)

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Replying to johnjenkins:
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By DMBAcc
27th Mar 2019 11:06

johnjenkins wrote:

VT have just announced their MTD is in pilot mode with HMRC and working smoothly. None of my clients will be going on MTD until they have to. Clients that are using cloud based systems especially bank streaming are having problems (not sure if they are MTD related though). Isn't it a pity we can't blame Brexit and MTD on Donald Trump or the Russians.


May be there are moles within HMRC. Otherwise the alternative is inconceivable - surely HMRC aren't THIS incompetent? Surely? eh?
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Replying to DMBAcc:
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By johnjenkins
27th Mar 2019 11:20

If incompetence is good enough for Parliament then it's good enough for HMRC. I believe the only sane person in all this is TM, and they want to get rid of her.

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Replying to johnjenkins:
Tornado
By Tornado
27th Mar 2019 11:37

Most of my clients are currently on excellent spreadsheet based accounting applications (and have been for many years) and the few that at not are using some sort of industry specific commercial software (e.g. Garage Services).

In the long term, I am increasingly thinking that VT will be the best solution for most of my clients and I will be looking at this more closely over the next few months.

I have used VT Final Accounts for many years now and find it easy and reliable to use. VT Transaction + comes with VT Final Accounts anyway so the cost per client should work out very reasonable indeed.

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Replying to Tornado:
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By Ken Howard
27th Mar 2019 11:53

In the long term, I am increasingly thinking that VT will be the best solution for most of my clients and I will be looking at this more closely over the next few months.

I have used VT Final Accounts for many years now and find it easy and reliable to use. VT Transaction + comes with VT Final Accounts anyway so the cost per client should work out very reasonable indeed.

[/quote]

I just wish VT would bring out an online version, or another software firm would bring out something with the same functionality. Sod all the fancy gimmicks and bells & whistles - VT works and is easy to use.

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Replying to Ken Howard:
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By johnjenkins
27th Mar 2019 13:40

VT cashbook, for the smaller client is also MTD compliant.
I've used VT for many years and found it Value for money.

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Replying to Tornado:
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By mfbrown185
27th Mar 2019 14:47

Agreed - whilst we have clients on Sage and Quickbooks our internal book keeping clients and any that we will have to do specifically for MTD will be on VT. Love the software it is clear and does what is says on the tin

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By Psychic Sue
27th Mar 2019 11:57

I cant sign up for MTD until my AML is through. I have only just applied for AML, as could not register for MTD Agent without it. Not sure if my VAT client is exempt or not, I can say he is zero rated. At the moment I am working on the assumption he will need to be registered and his vat is due June Qtr End.

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By Bill H
27th Mar 2019 13:16

I told you so!
This will be scrapped in July 2019 when the main event starts and no money is coming in and we need to give away £50 billion to the EEC!

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By anthonystorey
27th Mar 2019 13:35

I wonder how much money HMRC will collect from all those signing up for AML for the first time, and I wonder if HMRC will ask the first timers to pay the arrears for all the earlier unpaid years.

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Replying to anthonystorey:
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By GHarr497688
27th Mar 2019 13:40

We pay for those that break the law

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Replying to anthonystorey:
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By johnjenkins
27th Mar 2019 13:44

Those that aren't signed up for AML will use their clients to sign up just as they do for filing tax returns. So I doubt if HMRC will benefit.

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By Bill H
27th Mar 2019 14:02

And I am fed up with watching a comedian advertising a product that gives the impression that taking a photo on your smartphone will complete your accounting for VAT!
Very unconvincing. Back to my Excel spreadsheets. More accurate and at no cost.

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keep calm and have a cuppa
By tbk
27th Mar 2019 14:25

At least one of the bridging software companies is offering their product for free for 4 returns per year, one of my charity clients will be going with that when their June return is due. We will register for MTD when we have filed the March return. I am presuming that will be enough lead time. I will report back if not...

Just thinking it through, I have some clients with January and February quarter ends, we won't hit a period that starts from April till the April and May returns are done, so they won't be filing under MTD till August and September respectively. If that is not right please can someone let me know :-)

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By rockallj
27th Mar 2019 14:59

@kevinringer @[email protected]

Having set up and linked my new ASA to my old GG account, the pages look exactly the same. The ASA suggests that I am not set up for any services at all and the ASA is pretty much blank like you two have found.

When I start to sign clients up with MTD, can I authorise them then? I cannot transfer any clients to MTD through my ASA at all that I can see!

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Replying to rockallj:
Morph
By kevinringer
27th Mar 2019 15:08

Yes, it's a mess. Because we can't see our clients in the ASA we can't see who has signed up for MTD and who has not. I doubt any of my clients will sign up themselves but if they did I would not know. And because we can't see the clients in our ASA we don't know if new clients are in it or not.

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By anthonystorey
27th Mar 2019 15:26

I've opened a new GG account whenever I've been asked and now have 6 - one each for own SA, Agent for SA, Personal Tax Account, Agent Services Account, Organisation Account and one that I not sure about. This is bureaucracy gone mad. Why can't one GG enable you to access everything like it was originally intentioned.

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Replying to anthonystorey:
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By GHarr497688
27th Mar 2019 16:10

I feel the same .

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Replying to anthonystorey:
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By GHarr497688
27th Mar 2019 16:18

I feel the same .

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Replying to anthonystorey:
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By GHarr497688
27th Mar 2019 16:24

I feel the same .

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Replying to anthonystorey:
By turchyna582
27th Mar 2019 18:49

agree entirely Anthony. I also resent having to keep creating additional back-up passwords, back up/alternative devices, providing repeat ID information for every service added. When I log on to my account I expect to get access to EVERYTHING they have on record about me and my tax affairs, and without all these additional 'security measures'. I do not need additional measures (just in case I lose things), I do not lose things, but the potential is increased the more I have to keep providing them with information that they lose!

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Replying to anthonystorey:
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By EnglishRose
29th Mar 2019 09:36

I haven't registered yet and assumed it would all still be in the same place I log in to for my self assessment and VAT. So much for one place log in! You couldn't make this stuff up.

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Glenn Martin
By Glenn Martin
27th Mar 2019 15:53

In the words of Elvis, only fools rush in.

My clients are ready and have been for a while. My first return wont be submitted until 7th August so will let others iron out the issues in the system first ( I am sure there will be plenty of those)before I dial into it.

Was anyone expecting 2m businesses to be chomping at the bit on 1st April waiting for this new filing system to be ready.

Bigger issues for business are Brexit, NLW increase of 6% and Pension top up +1% which all happen on same day.

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Replying to Glennzy:
By SteveHa
28th Mar 2019 09:11

Wasn't that Ricky Nelson?

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Replying to SteveHa:
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By johnjenkins
29th Mar 2019 10:06

They both did.

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By GHarr497688
27th Mar 2019 16:25

It sounds like Accountants are united on this . I would urge everyone to write in to Hmrc . Do not sign any client up even if you are able too . If we unite then Hmrc will be forced to back down and make changes . After all for 10 years some have not registered for AML and Hmrc are turning a blind eye to that . Double standards at Hmrc seems to be acceptable !

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Replying to GHarr497688:
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By johnjenkins
28th Mar 2019 08:57

It seems takeovers are the in-thing at the moment.
If we were to unite we would have to go the whole hog, resulting with Accountants taking over the administration side of HMRC, leaving them with investigation and collection, something I have always advocated.

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By buttercup books
27th Mar 2019 16:24

Sorry Francois Badenhorst,
whilst your article has provoked a useful discussion, it is - IMHO - really, really not thought through - and more than a little insulting.

You say -"The current run rate for MTD sign-ups is currently 3,000. With April 1 looming, it’s going to take a tidal wave to get everyone set up in time. Meanwhile, businesses aren’t the only ones that are lagging."

As everyone else here is saying, you can't sign up a client (in general) until after their next VAT return is filed- you should have known that.

You quote Float’s CEO Colin Hewitt as saying -

“[Many accountants] won’t have done more than sending a few emails which will probably be sitting buried in inboxes across the country. While solutions like Xero and Quickbooks have been very proactive in telling their customers about MTD, it’s obvious from the data that businesses haven’t yet responded to the registration process required.”

Give us some credit, as a profession we have spent hours and hours and hours of unpaid, un-rechargable time trying to sift through the total deluge of useless, contradictory, ever changing information thrown at us by HMRC and software houses.

MTD has cost us a fortune in lost time and a second fortune in additional software fees -

with RTI, then GDPR, now MTD - and next Brexit - I'm in "research overload" and if my Governing Body dare to suggest I haven't done the requisite CPD - I might be tempted to string somebody up

Thanks (11)
Replying to buttercup books:
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By GHarr497688
27th Mar 2019 16:29

Disgraceful treatment by Hmrc who can’t even send penalty notices out on time when they almost unlimited resources . MTD make it fail please .

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Replying to buttercup books:
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By DaveyJonesLocker
27th Mar 2019 18:06

AW aren't bothered about us accountants at ground level actually doing the work. They're just interested in the companies which pay money to SIFT for advertorials.

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Replying to buttercup books:
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By SXGuy
27th Mar 2019 19:11

Agree completely.
I've been telling clients about mtd for way over 2 years!

First it was everyone under SA will be required. So I give a heads up to every single client year one, as many of us will recall, the phrase, I don't know, was often said shortly after.

Then during the budget Osborne kindly slips in a delay, so again, were all "sorry its been delayed", then they finally give in and say its for vat only. Imagine the relief on the clients faces who are out of scope.

Point is, I can recall at least 3 to 4 years of informing clients, which I didn't get paid for and won't get back.

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Tornado
By Tornado
27th Mar 2019 17:12

REVOKE MTD

There will be March though Peckham on Friday led by the ultimate entrepreneur, Del Boy. Meet at the Nags Head at noon and bring sandwiches. (Contact Del for banners which he can generously supply at cost)

Thanks (4)
Replying to Tornado:
Glenn Martin
By Glenn Martin
27th Mar 2019 18:52

I think you will find Del Boy is in the exempt group on account of his trading terms “no income tax no Vat’

I suspect a few more will be joining him

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By DaveyJonesLocker
27th Mar 2019 18:09

"According to Float’s CEO Colin Hewitt, businesses have been let down by ..... “reactive rather than proactive” accountants."

Colin Hewitt? More a Colin Hunt who was a character on The Fast Show and I'm pretty sure that name was intended to mean something else which is appropriate here.

What an arrogant dick

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By adam.arca
27th Mar 2019 20:19

I've just waded through all 68 replies so far and am a bit surprised this Float guy has got off so lightly with only a couple of comments moaning about his, quite frankly, gobsmacking arrogance.

Are accountants telling the software industry how to run their business? Does the software industry know more than accountants about what accountants do? Should accountants take a leaf out of the software industry book when it comes to dealing with customers?

But then I remembered. This is a software insider and what he believes (maybe even sincerely) is that what business needs is more software.

Erm, no, mate. What business needs is a big application of common sense. Software has its place but, as just about any decent accountant can tell any deluded software guy, it really should be horses for courses.

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Chris M
By mr. mischief
27th Mar 2019 20:36

In my view, he escaped lightly because his comments are more or less par for the course from software providers on this site.

So for me it was just "same old same old" and they triggered no emotions at all.

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By North East Accountant
28th Mar 2019 08:09

Government has to stop this agile approach where they sign off laws and implement systems 1 day before it's due to take effect and millions of people have to suffer the consequences and deal with their mess.

Eg. GDPR, Brexit, MTD etc

Run up to 7th August will be fun!

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By paulclewlow
28th Mar 2019 11:24

i agree with GW
I was told at a HMRC webinar not to file any MTD returns using my ASA until April/May/June returns were due as once I had pressed the button to migrate (link) current clients to my ASA I would not be able to file under the old credentials for ANY clients. So currently I am waiting until I have filed all my Jan/Feb/March. Feb/March/April, March April/May returns before i begin signing them up and linking them to my ASA

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Replying to paulclewlow:
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By dl100tr
29th Mar 2019 09:03

This is worrying - can someone confirm that this is true? I didn't realise that you had to sign ALL of your clients up to MTD? That doesn't make sense if you don't have to sign up if your turnover is below the registration threshold! I have several clients who don't need to take part in this. Since I haven't attempted to sign anyone up yet - for the obvious reasons - I don't know what happens when you do! This would be a serious problem for me if it is correct!!

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Replying to paulclewlow:
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By david.bransbury
29th Mar 2019 09:54

This is not true. Your clients or you on behalf of your client has to formally sign up for MTD. Only when the individual business has told HMRC they are in MTD that the old portal etc for that client is closed down.

(Some of my clients are already on Xero and we have filled MTD returns already. Some clients do not have to or want to wait until they have to and so we are still filing using the portal or the old credentials on Xero.)

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By buttercup books
28th Mar 2019 12:24

It is never going to happen, but I think HMRC should pay agents for signing up clients to MTD

Do you remember when payroll went mandatory digital back around 2004, 2005 - HMRC paid employers (be means of a deduction to the PAYE bill) - and actually it was really good money for a 5 minute job, I've forgotten what is was in total, around £1, 200 over 4 years -

I really think HMRC have absolutely no idea how much time and money MTD has cost us, and I think they should give us compensation - maybe it should be paid by means of a windfall tax on software houses -

haha - I'm not holding my breath

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Replying to buttercup books:
Tornado
By Tornado
28th Mar 2019 14:01

A monetary incentive would be nice, but we would be far more efficient and earn more money if our Civil Service were not of such substandard quality.

I long for the days when Tax Officers really knew their stuff in contrast to today where they just think they know their stuff.

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Replying to buttercup books:
By cfield
29th Mar 2019 02:45

It was £825 over 5 years and it was money for old rope. PAYE Online was such a no-brainer I'd have gladly paid them for it, but money was thrown away by HMG all over the shop in those days. No wonder we ended up with such a huge deficit.

It was such a nice little earner people started creating multiple companies, each with its own payroll, just to earn the £825. They got their fingers burnt though as HMRC restricted it to just one scheme each a year later.

VAT and SA were also no-brainers but thereafter the rot set in. It all started with iXBRL. Suddenly the IT solution was more time-consuming and expensive than paper returns for most small businesses. Then along came RTI. What a pain that was/is. Now the grand-daddy of them all - MTD.

Somewhere along the way, the Government lost sight of the fact that IT is supposed to make life easier, not more complicated. It seems to have become an end in itself rather a means to an end, without any real thought being given to the purpose of it all.

Now the only no-brainers are sitting behind desks thinking of ever more devilish ways of using IT as a stick to beat us with. It's all stick and no carrot these days. Gone are the days when they thought an £825 bung would do the trick. Someone must have told them what mugs they were being, paying for the software and then paying us to use it. Seems incredible they did that now. Like it was all a dream. All they had to do was pass laws making it compulsory. What were they thinking of?

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Replying to cfield:
Morph
By kevinringer
29th Mar 2019 05:51

You've hit the nail on the head. As you say, online VAT was a no-brainer. I signed up all my clients years before it became compulsory. I suspect HMRC don't think there's a big step from online VAT to MTD but HMRC don't understand the difficulty of digitising transactions.

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Replying to cfield:
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By johnjenkins
29th Mar 2019 09:02

Unfortunately we are overstepping the mark with technology. We all know with more IT comes more work as the information provided becomes immense. Just imagine the algorithms HMRC will have when they get hold of every transaction a business makes. What you will probably get with smaller business is a "business within a business". So all this extra money HMRC think they will get from "less errors" won't be there.

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Replying to cfield:
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By EnglishRose
29th Mar 2019 09:42

I agree.
I wish HMRC would say = this will be awful for you, the records may be worse than you currently use and it will cost you hours and hours of time for no gain, but we want to do it because we think it will generate more tax revenue.

Instead they lie ands ay it will make people know what VAT or tax is due when in fact many of us already know. It's like the smart meter lies - plenty of us know what we use but don't want all the downsides of smart meter so why not just tell the truth and say this will be easier for the companies, will not reduce your bills so just suck it up sucker...

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By Kaylee100
29th Mar 2019 11:07

Sorry, I don't trust their systems to work. They have said nothing that gives me any confidence they have a grip on this and, so, I will sign up when I have to. If they had been prepared to share the pilot outcomes then fine but, I am afraid, because they haven't I distrust them completely.

I am having conversations with my clients, so its not the nothing is happening. Its the sign up. That's whats not happening and won't until the various windows of opportunity arrive.

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By buttercup books
29th Mar 2019 13:02

Just sat through a HMRC webinar - oh joy

Several times it was emphasised - the only information transmitted, is the same 9 boxes on a standard VAT return, absolutely nothing else -

They have no way of knowing how we get to those figures, whether we type in daily sales totals, or one figure for the quarter, they get nothing but the totals,

millions and millions of pounds and man-hours lost, millions of businesses forced into expensive MTD compliant software - for what - just the same 9 totals

Unless we get a vat inspection they won't even know if we keep records correctly - or maintain digital links

and - if we had an inspection and got caught - if the fine is a percentage of lost revenue, and there is no lost revenue - 'cos we know how to do a vat return- there wouldn't even be a fine

bonkers - the whole thing is bonkers

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By GHarr497688
29th Mar 2019 15:53

I’m signing no one up to a system that clearly is in chaos . No one understands the Hmrc ASA portal or the software that’s provided . I will write to Hmrc and they can put me in prison . Would be far less stressed than I am now .

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