Survey exposes MTD consultation response apathy

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While accountants and tax agents haven’t been shy in sharing their opinions on HMRC’s Making Tax Digital plans, survey results from Thomson Reuters​' recent webinar reveals that many are not as forthcoming when it comes to formally responding to the consultation documents.

Over half of those surveyed admitted that they have no plans to respond. Despite many sitting vehemently on either side of the argument, the survey results show an apathetic stance from those grassroots practitioners surveyed.

Source: Digita
Source: Digita

This apparent indifference towards the consultations was compounded by 75% confessing to not have read the documents. Although 50% intend to read the documents, time is running out if they plan on responding, as the consultation closes 7 November.

Source: Digita
Source: Digita

More curiously, even though 227 surveyed have no plans to respond to the consultations, 307 out of 424 surveyed (72%) believe HMRC hasn't adequately included agents in the consultation process. This figure dwarfs the 4% who believe agents have been appropriately involved.

Source: Digita
Source: Digita

In the other survey results, the majority were still unsure on whether the client authorisation process featured in the con docs is an improvement over the current 64-8, with 44% believing most clients will struggle, but their more tech savvy clients will be fine.

And 80% believed the gross turnover/gross rents threshold for deferral should align with the VAT limit.

Over 400 accountants and tax agents took part in Thomson Reuters’ survey, which took place throughout their Making Tax Digital webinar.

AccountingWEB’s consulting tax editor Rebecca Cave stressed the importance of individual firms responding to the consultation documents, rather than relying on their professional body. “The government puts the same weight on a response from a two-partner firm as it does from, say, KPMG, or the CiOT,” she said. “The more responses you can get, the more HMRC and the government will pay attention to the majority view given by those responses.”

The result, meanwhile, doesn’t surprise Cave. After all, she explains, firms are busy serving their clients and doing their job, not reading consultation documents. “[Smaller practices] usually leave that up to their professional bodies, which have technical people employed to deal with responding on behalf of members.”

But if there’s just one question firms should respond to, Cave encourages them to consider question 42 from Bringing businesses into the digital age consultation, which questions the on-going costs as a result of the MTD changes.

“HMRC and the government will not listen if people are not talking", Cave emphasised. “If people are not responding to the consultation documents, there is nothing for HMRC to listen to.” 

For those who want to respond but don't know how, Rebecca Benneyworth has released a consultation document resource pack which includes an aid to responding to the consultation documents. 

Mark Purdue consolidates hundreds of pages of information into 90 minutes to explain the key points and what the consultations really mean for accountants and their clients. Register and listen to an on-demand version of the webinar

Have you responded to the Making Tax Digital consultation documents yet? Are you going to? More to the point, have you even read them? 

About Richard Hattersley

Richard Hattersley

Richard is AccountingWEB's practice correspondent. If you have any comments or suggestions for us get in touch.

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By Tornado
26th Sep 2016 14:44

These results do not surprise me much. The Government have formulated plans for MTD without consulting those that really know how this should have been approached and many feel that the 'Consultation Documents' are nothing more than enabling the Government to tick a checklist box to show that there has been a consultation.

Whilst we should really get involved with the 'Consultation' process, I am not the least bit surprised that many feel it is just a waste of time and any input from them will be completely disregarded.

We need to see what actually arises from the process, but I am fully expecting the Government to suggest some changes anyway, much like a Double Glazing Salesman -

"I have just checked with my manager and as a special deal, if you agree to all the MTD proposals he will increase the turnover threshold from £10,000 to £20,000 but you must agree today and be prepared to start doing this from 6th April 2018"

I think, however, that we do need to make a special effort to get involved in the Consultation Process as this will also assist those in Government who are opposed to many aspects of MTD (such as Andrew Tyrie MP) and others who see this folly for what it really is.

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26th Sep 2016 15:33

I read every page of the con docs, and whilst I would like to provide a meaningful response, the questions asked are generally loaded and phrased to elicit the response that HMRC want, rather than the response that it should have.

The consultation should have really started with an open dialogue rather than the fait accompli that has been presented.

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to SteLacca
29th Sep 2016 09:26

SteLacca wrote:

I read every page of the con docs, and whilst I would like to provide a meaningful response, the questions asked are generally loaded and phrased to elicit the response that HMRC want, rather than the response that it should have.

The consultation should have really started with an open dialogue rather than the fait accompli that has been presented.

Spot on.

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By gordo
26th Sep 2016 21:19

The purpose of MTD is to accelerate tax receipts. The Governmment is bankrupt. £2 trillion in debt with another £260 billion increase last year.
Accuracy in MTD submissions is irrelevant. It is about the following:

"to simplify the payment of taxes, including whether to align payment dates and bring them closer to the point when profits arise, so that taxpayers MAKE a single REGULAR PAYMENT that covers all their tax affairs"
(read monthly payment to account)

'Consultation' is just a method of telling you how it's going to be.

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27th Sep 2016 10:13

As I have posted elsewhere I personally have engaged fully with this. I have written to my local MP for the first time in my life. I will soon be providing Andrew Tyrie with a compehensive dossier on why MTD will make our tax system even more of a mess than it already is.

It is a total waste of time to engage with HMRC. I have tried, see some of my posts on this site following webinars from them for example. No responses yet.

The simple fact that HMRC believe they have what it takes to implement this in the timeframes quoted displays breathtaking arrogance and ignorance. It belies belief they expect me to take part in their stupid surveys which they will then rip up and chuck in the bin unread.

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27th Sep 2016 14:29

I too have consulted with my MP and have recently received a response which included a letter from Jon Thompson the Chief Executive of HMRC.

I have to say the letter from Mr Thompson did not respond to any of my points raised in any way whatsoever and was clearly a standard letter just pointing me to the consultation process.

I am also preparing a detailed response to the consultation questions but, as a VAT Inspector told me last week during discussion about MTD, "We're being told that it's going to happen and that's the end of it".

I told her it will be a disaster and her response was "well they'll be collecting in plenty of fines".

I pointed out how, even now, it is often so much quicker to take a client's workings, discard them, and start again rather than risk missing something on review. Bear in mind some clients are not bad but most we would not point towards doing things themselves in a million years!

HMRC will be faced with having to review 4 quarterly updates followed by the accountant's workings which will then cause amendments to the submissions. How will those amendments have to be processed? Can we just re-do via a spreadsheet and then journal them in to the year-end update?!

Is this whole process therefore a joke if the client is incapable? Does HMRC have the right to assume that every business owner is capable and to what standard will they be held? Is it not true that it is the year end submission which ends up being the official declaration anyway which makes any year end review very important if we are signing off vouching for a client's work.

Suffice to say though, and it has been my issue from the start, if you are going to reply to the consultation then labour the main issues that to my mind are:

1. Don't ban spreadsheets

2. Allow a period of three month's following quarter end for submissions. They're not after the tax any quicker and having a proper window allows agents to help their clients get it right first time to the benefit of all. Otherwise our clients will end up fudging it and we then have 9 months to fix it and, to my mind, that's not the great leap forward from where we are now.

Thanks (4)
By Tornado
to youngloch
27th Sep 2016 14:45

Your points are very good but again begs that perennial question as to why quarterly updates are required at all, particularly as there will be a final 'correcting return' anyway.

The government could save hundreds of millions of pounds by simply just improving the existing Self-Assessment system.

"a VAT Inspector told me last week during discussion about MTD, "We're being told that it's going to happen and that's the end of it"

I have seen this sort of muddled Government thinking before and it always seems to end up with massive climb downs, even at the 12th hour. I am not surprised that your VAT Inspector said what he did but do not believe for one second that what he has been told is what is actually going to happen. There is a long way to go yet and the Government are only just starting to feel the pressure of growing discord.

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27th Sep 2016 14:54

I took part in the webinar and asked the question "what is the point of quarterly figures when nothing is done with them (so HMRC say)?". Standard answer.
The best thing is to not engage with HMRC and let them [***] the whole thing up.
The FTT will get clogged up with the appeals against having to send in the figures (there are exemptions) and perhaps then HMRC might just pull the plug on this crap.
I have said this before the only way forward is to let Accountants (agents) do the admin and leave HMRC to investigate and collect.

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27th Sep 2016 20:44

I do not see this as a done deal. First up, we have a new Chancellor, someone who is probably the greyest, safest no risk politician since the John Major puppett on Spitting Image.

In my view he was appointed partly because May did not like the direction of travel of George O, as well as personal dislike. Granted this will not likely lead to a change in tax policy as much as in deficit policy, but with new folk in both number 10 and 11 we have a chance to kick the crap out of the HMRC drivel before it gets implemented.

Bear in mind they are picking a fight with the doctors for no good reason, which will further mess up the imbalance between supply and demand in the NHS. Plus May has launched a crusade on grammar schools which is another political hornets nest.

Plus of course "Brexit means Brrr.....errrrrr. What the hell does it mean? You tell me you voted for it Boris!"

So the last thing May and Mr Grey will want is another load of trouble kicking off in tax for no valid reason. Ignore the HMRC consultation and go direct to the people who can put a stop to this nonsense before it starts.

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By gordo
27th Sep 2016 21:46

I genuinely believe that you are wasting your energy trying to apply an Accountants logic and ethics to this. It's got nothing to do with getting things right. It's about minimising HMRC costs and accelerating tax receipts and finding errors in taxpayers records that would lead to more tax receipts! HMRC's new published objectives (on their website) at the bequest of its poitical masters is "maximise revenues...".

I know that some of the consultation documents appear to suggest that the payment regime will not change, but they are craftily worded. I'm not going to enjoy saying told you so. One documents bears the wording "..taxpayers MAKE a single REGULAR PAYMENT...". What's a single regular payment? Might that be a monthly instalment with a balancing payment, instead of two payments on account and a balancing payment.

I accept that HMRC may not introduce this straight away until they get MTD through and may simply use the information to 'nudge' people towards earlier payment to begin with.

You have to realise the extent of successive government overspending to appreciate the motivation. The NAO wrote in their recently published report that pensions may not be capable of being paid in future given the size of the debt. The Government don't want you to know this for genuine fear of a public uprising. The Chancellor said that last year the deficit was around £70bn and that's what the newspapers dutifully reported. However if you get hold of the whole of government accounts ((WGA), which were buried amongst the documents released when Parliament went into summer recess, you will discover that the actual deficit includes a further £190bn increase in public pension debt that wasn't reported by via the Chancellors speeches or the press. The Government balance sheet now shows net debt of £2 trillion which apparently will be "...paid from future income". Presumably your grandchildren then. It actually says that on the balance sheet "..to be paid from future income". Can you imagine as an Accountant telling that client to keep trading and hide it from and mislead shareholders and customers! There is a reason why HMRC have recently changed their objectives to "maximise revenues..", the Government needs your cash. What might a poorly led company try to do in such circumstances, accelerate receipts perhaps? Book income that isn't actually income perhaps? Did I mention that the whole of government accounts record APN receipts as income even though they are an accelerated payment on account towards something that is still to be tested in Court to decide whether there is actually any tax due. Equal and opposite debtor and creditor anyone? However the government accounts record all but a 10% provision as income. Did you notice that HMRC had recently started claiming to win 90% and not just 80% of tax avoidance cases that go to Court. I wonder which came first, the decision to only provide for 10% in the accounts or the analysis of cases that justified a 90% success rate. HMRC have though finally got around to disclosing the cases that they used to get their 80% or 90% results and a number of very professional commentators have asked why the list includes cases that aren't actually tax avoidance and doesn't include some which HMRC lost and which any reasonable person would assume should be on the list.

Next thing you know they will be trying to change the past with proposed retrospective legislation....oh wait a minute.

If you haven't previously read George Orwell's book 1984 you might want to pick up a copy.

Some of you, like me, will remember the days when HMRC tried to collect the right amount of tax. When you could have a reasonable discussion with your local inspector and find an appropriate solution. To be fair, the Inspectors are likely to accept what their employer tells them and assume it's accurate.

Of course the Government needs someone to blame, so they will blur the lines between evasion (illegal by definition), avoidance (legal by definition unless defeated in Court, in which case it wasn't avoidance was it), and tax planning and they will use the media to fan the flames and direct blame. They may try to pin the blame for the deficit (quantified at £260 billion) on tax avoidance (quantified at £2.7 billion). They might even hire behavioural psychologists to sell it to you.

Don't go telling the Teachers, Nurses, Police and Fire Fighters that there is no pension fund, it's just a figure on a balance sheet of business (UK Plc) that is bankrupt.

Accountants whinging about the pain they will feel barely registers.

Sorry folks, but you can't solve a problem if you don't know you have one or if the problem is hidden from you.

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By Tornado
to gordo
27th Sep 2016 23:19

It is not new knowledge that there is no 'State Pension Fund'. I have been explaining to my clients for many years that tomorrows pensions are paid from the tax collected today, almost literally.

The difference now is that with the snowball effect, there will be increasingly more pensions to pay tomorrow from taxes collected today.

I would agree that there are many aspects of MTD that make no sense unless you view it as a desperate rushed attempt to gather in more money more quickly.

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28th Sep 2016 10:02

I've only ever viewed MTD as a desperate attempt to further fleece the small business sector. That's why I am opposing it despite MTD being in my own commercial interest due to the higher fees I will inevitably end up charging.

All proposed legislation is a done deal until it is not. Like the poll tax. Or tax credit changes last year.

Whilst Labour are a shambles, the real Opposition is the 1922 Committee. The Government majority is wafer thin, getting this thing stopped is achievable. But obviously not via HMRC.

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28th Sep 2016 10:17

Well our local accounting association had arranged a meeting with local tax office bods to come and explain the in and outs of MTD as they see it and how we would fit in with them.

It had been arranged for 4 months very well attended with probably 50 local agents in there, in addition we had PFP insurers, several software houses and other interested parties in attendance.

The only person who didnt show was the Tax Man.

Seems about the level of contempt they have for us over this whole thing.

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By Tornado
to Glennzy
28th Sep 2016 10:52

I am surprised (not really).

The usual response time from HMRC for letters is between 3 to 4 months so perhaps they have not yet got around to sending a letter to say they would not be there. That letter might arrive today.

The Architects of MTD are in a world of their own and need to appreciate that the HMRC staff are probably not going to be any better at dealing with MTD than taxpayers in general.

Possibly your allocated Tax Man decided that he could not defend the indefensible and went to the pub instead.

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28th Sep 2016 11:24

I suspect the reason people have not responded is, if my experience is anything to go by, it's too damned difficult. It's not a simple click and respond - from memory I had to dance through several hoops and still my response failed. I did however receive a 24 notice to attend an HMRC MTD consultation.

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28th Sep 2016 13:09

No point in responding to these travesties . . .
a. they will pay no attention to any response
b. the phrasing of them is gobbledygook
c. the 'questions' are biased
d. they are based on a fundamental disconnect between HMRC and reality
Apathy is not the same thing as understanding how not to waste time.

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By gordo
28th Sep 2016 18:01

Hi By Tornado

I wasn't referring to the State Pension scheme, I was referring to Public Sector Pension scheme and the fact there is no fund for that!

You are right though Government accounts also don't include the state pension scheme as a liability! So that would be over and above the £2 trillion deficit I mentioned.

Ironically there is more money in the BHS pension scheme than there is in the non existent Public Sector Pension Scheme. Maybe Frank Field MP should take note. If we split the increase in the deficit, in ONE YEAR, from the Public Sector Pension scheme between the 650 MP's would it not come to a similar figure as that shortfall which they claim Philip Green should fund personally. I'm not sticking up for Philip Green but the hypocrisy is staggering.

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By Tornado
to gordo
30th Sep 2016 09:49

Yes, good point.

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29th Sep 2016 18:31

I think the survey was undertaken too soon into the process. We were all still reeling with shock! As I said in my article 'MTD - HMRC has a dream' the documents are difficult to get through.
As Rebecca has said - if everyone submits answers to just one or two of the questions (plus cc to their MP and respective Institute) then maybe something can get done with at least some 'watering down'
Having submitted responses to past consultation papers on Accweb members behalf I can tell you now that HMRC will be getting their way with this. Its no use saying 'its horrible - it wont work', it will go through and its up to us to bring some reality into their thinking.

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By Tornado
to Jennifer Adams
29th Sep 2016 19:04

I do generally agree with your comments but I personally have doubts that HMRC will get their way with this. HMRC are directed by the Government, and the Government we have at the moment is very fragile. MTD is a potential disaster in its present proposed format and will hit Tory voters the hardest. In addition, the Government will be spending much time on the Bexit arrangements and will not want to be forced into a General Election early due to a wave of of discord from its core voters and have to deal with a potential devastating meltdown of HMRC, which many will say is already in progress.

Those in power want to stay in power and Theresa May has all the resources she needs to stop MTD in its tracks if she feels that power is likely to be taken away from her.

Time will tell, but the need to keep up and indeed increase the pressure on our elected representatives is paramount.

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to Jennifer Adams
30th Sep 2016 09:06

I think you've missed the vital point JAAdams. With SA, HMRC were dealing mainly with Accountants. This MTD crap is aimed at the self-employed and their thinking is a lot different. Many do not even trust "the cloud" let alone have smart phones and the like. It's pretty plain that most Accountants will not have the time or capacity to deal with all their clients so it will be down to them. As for training them up, that will be a non starter.
So all JC has to do is to say the word and he will be in. I'm with Tornado and NO it's not up to us to bring reality to something that hasn't got a hells chance of working. If HMRC are stupid enough to think this will work in the time frame set then they will melt down a lot sooner than expected.
The most annoying thing is that if HMRC had come to Accountants (not our apathetic bodies) and said, look this is what we would like to do (no time scale) can we have ideas on how to achieve this (it's called communicating with people that have experience in the job) then perhaps over a ten year period MTD could in some form be a reality.

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By Tornado
30th Sep 2016 09:51

Whilst it seems obvious to me, I can understand that some of the younger generation may not fully appreciate that with Bexit, just about all our legislation will be created in this country and adopted by OUR elected representatives, in accordance with OUR wishes. Whether this be in Westminster or the devolved Assemblies, this is the way it will work.

The government are the policy makers and the various Government departments merely have the role of implementing those policies, which is why they are referred to as the Civil Service staffed by Civil Servants, with the emphasis on 'servants'.

This is why Sir Humphrey in 'Yes Minister' always referred to himself as a perfunctory, acting efficiently without a care or interest (in the reason for doing it).

Whilst it is necessary to go along with the 'consultation process' this is just feeding the machine, a box ticking exercise that is unlikely to change much.

The real pressure needs to be exerted on the policy makers themselves, which is the Government, either directly or through our elected representatives. Most MP's are genuinely interested in working for and making a difference for us, and will be happy to listen to our representations.

Write to your MP and anyone else who is likely to have any influence over the policy decisions, this is where any real policy changes are going to be made.

Remember that HMRC is merely a Government Department whose role is simply to enable Government Policy to be enacted.

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30th Sep 2016 10:01

So we have the chicken and the egg scenario. Government need more money. HMRC are the kiddies to provide that income. So MP's will be told that the HMRC way is the only way to get more money and MP's will say MTD will destroy the small business which provides much of Governments money.
If we are that desperate for money then the only solution is to put basic rate tax up for a couple of years, instead of making up stories about the self-employed making so many mistakes that HMRC have to take over the Accounting functions.

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By Tornado
30th Sep 2016 15:30

Just thinking at coffee time ... all over the world there are thousands of teams creating buildings, tunnels, bridges, dams and a whole lot more, working to clearly laid out plans and delivering what is required in innovative yet practical ways ... and then we have HMRC.

Anyone for a digestive?

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30th Sep 2016 16:11

Ah Tornado, do I detect a bit of the European in you. Coffee at 3.30???? Tea at 3.00 don't you think?

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By Tornado
to johnjenkins
30th Sep 2016 16:48

European yes, but very much British and Tea at 3.30 is the correct way of course. In this instance after a battle with my tax software (yet again) I needed something a bit stronger to calm the nerves (Why does the software insist on adding in Class 4 to the tax calculation when the exemption box is ticked and it is very obvious that my client is well over the age threshold by several years. Roll on MTD when software will work perfectly all the time and life will be just a breeze).

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to Tornado
02nd Oct 2016 14:42

A bit off topic but the tea scenario reminds me of my first audit.
A lawn mower manufacturer. So a beautiful set of leather bound books elegantly kept by an equally elegant elderly lady. Loads of small mistakes which we weren't allowed to spot. However the point of this story is that this lady bought coffee and two rich tea fingers at 11.00 and tea with a current bun at 15.00 on the dot. Anybody know what and why the correct timing should be?

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By Tornado
to johnjenkins
02nd Oct 2016 17:31

I don't think there is a single answer to this but 11 am (elevenses) is pretty universal time for a tea or coffee break. Afternoon tea is much more vague and can just mean another tea break (with a biscuit or bun) at about 3 pm for working people or a more formal afternoon session with dainty sandwiches, a variety of teas and small cakes which can be any time from 4 pm to 6 pm.

My wife and I are often given vouchers for tea at a variety of 5 star local hotels by the kids (a good gift for those that have everything) and it is always a great experience. A lovely tea on the verandah of a stylish hotel in the spring or summer, or in the Drawing Room in winter, is something to really enjoy.

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to Tornado
03rd Oct 2016 08:50

There's a lovely little teashop type establishment on Eastbourne pier which do excellent afternoon teas. Although my favourite is a little café at end of Lizard which does a wonderful homemade apple and blackberry pie with clotted cream and, yes and, Cornish ice cream, listening to the waves crashing below. reminds me a bit of "carry on up the Khyber".

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