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MTD ITSA: Why quarterly updates are needed

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Many people are asking why taxpayers will be required to submit quarter updates under MTD ITSA, Rebecca Cave has uncovered some of the reasons.

8th Oct 2021
Tax Writer Taxwriter Ltd
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There are three official reasons for requiring taxpayers with annual turnover as low as £10,001 per year to provide figures of income and expenses via MTD-compatible software to HMRC on a quarterly basis.

1. Prove of homework

Submitting a quarterly update via MTD software proves the taxpayer is keeping digital business records in a timely fashion.

It actually does nothing of the sort, as regulation 5 of the MTD ITSA regulations (SI 2021/ 1076) only requires the taxpayer to record their transactions digitally by no later than:

  • the quarterly filing deadline; and
  • immediately before the quarterly update is submitted to HMRC.

If the taxpayer, or their accountant, enters all the transaction data for the quarter into the MTD compatible software in one exercise, just before the submission of that data to HMRC, they would be within the letter of the MTD ITSA regulations.

2. Tax estimates

The profit reported in the quarterly update will be used by HMRC to provide an estimate the amount of tax the trader will have to pay for the entire tax year. This estimate will be reflected back to the taxpayer in their online personal tax account. Apparently this will allow the taxpayer to budget for the tax due and help them pay the right amount of tax on time.

If the taxpayer draws up their accounts on a cash basis to the tax year end, the quarterly profit figures may deliver a reasonable estimate of the tax due for the entire year.

Where the accounting period does not match the tax year, the quarterly updates will not produce a meaningful estimate of the tax liability for the current year. However, if the proposed change to the tax year basis is pushed through for all unincorporated businesses, the profits reported in the quarterly updates will approximate to the total taxable profits for the year and the estimated tax liability will make some sense.

HMRC has assured the accounting bodies that MTD ITSA is not introduced to facilitate earlier payment of tax. However, the call for evidence: timely payment published in March 2021 did explore the possibilities of more frequent, in-year tax calculation and payment. The quarterly update, and resulting tax estimate, would build a path way to permit earlier payment of tax.

3. Useful data

The data HMRC receives from the quarterly updates will be used by the government to make macro decisions about the state of the economy. Also as the MTD project matures the quarterly data may also be used by HMRC to create informed interventions to help individual taxpayers pay the right amount of tax. For example HMRC will be able to see if a taxpayer has unusually high expenses in a category not expected for their trade.

As many others have commentated, if MTD ITSA had been in place before the Covid-19 pandemic, HMRC would have been able to provide more targeted help to the self-employed based on their income reported in near real time.

4. Late filing penalties

There is a fourth reason that HMRC is less keen to shout about for MTD ITSA, and that is the value of penalties that will be levied on taxpayers who fail to submit their MTD submissions on time.

A new late filing penalty regime will be introduced for taxpayers who are mandated into MTD ITSA from April 2024. All other taxpayers within self-assessment will be drawn within the new penalty regime from 6 April 2025. For VAT this new penalty regime starts two years earlier on 1 April 2022 when all VAT registered traders are mandated into MTD.

Points build to penalties

A taxpayer will be subject to a financial penalty for late filing of an MTD submission once they have accrued sufficient points for late filing of other submissions relating to the same tax. The taxpayer accrues separate penalty totals for VAT and income tax, which do not affect each other, but are based on the same rules.

The points threshold depends on the submission frequency:

Submission frequency Penalty threshold Period of compliance
Annual 2 points 24 months
Quarterly 4 points 12 months
Monthly 5 points   6 months
The taxpayer will be able to submit up to three late MTD quarterly updates with no penalty, but their fourth late quarterly update will trigger an automatic £200 penalty. Every late submission after that threshold has been breached will trigger another £200 fine, but those additional penalties will not add points to the points slate (see example 1 below).

MTD ITSA also requires two annual reports: the end of period statement (EOPS) and the finalisation declaration, which replaces the SA tax return. If the taxpayer is late with those two annual reports, they will have breached the threshold for the annual submissions and be subject to a £200 penalty.

Wiping the slate

Each point levied will expire after two years, and this lifetime clock starts running from the month after the month in which the late filing occurred, not the month when HMRC tells the taxpayer the point has been levied. HMRC has 11 weeks to levy points after the quarterly filing deadline is missed, and 48 weeks for annual filings.

The points slate can only be wiped clean when the taxpayer achieves both of:

  • No late submissions for a period of compliance; and
  • All returns filed for the previous 24 months, even if they have been filed late.

The period of compliance varies with the submission frequency of the return as shown in the table above.

All points and penalties can be appealed.

Example 1: George the landlord

George receives £18,000 of rental income a year. He is unaware that he has to file quarterly updates under MTD ITSA, as all the advertising he has seen refers to small businesses. George doesn’t run a business, and he doesn’t have an accountant or a computer. He files his tax return on paper every year in October.

George will rack up the following penalties for late filing of MTD returns:

MTD submission required Due date  Points/Penalty
Q1: to 5 July 2024 5 August 2024 1 point
Q2: to 5 Oct 2024 5 Nov 2024 1 point
Q3: to 5 Jan 2025 5 Feb 2025 1 point
Q4: to 5 April 2025 5 May 2025 1 point and £200
Q1: to 5 July 2025 5 August 2025 £200
Q2: to 5 Oct 2025 5 Nov 2025 £200
EOPS: 2024/25 31 Jan 2026 £200
Final declaration:2024/25 31 Jan 2026 £200
     
 Total penalties:   £1,000
HMRC will write to George each time he receives a penalty/penalty point and advise him how to avoid further penalties. George may be able to claim exemption from MTD ITSA on the basis that he is digitally excluded (TMA 1970, Sch A1 para 14(2) to (4)). However, he needs to know to claim that exemption from HMRC or get someone to claim it on his behalf.

Example 2: Shona is self-employed

Shona is aware that she needs to file quarterly updates under MTD ITSA, but she misses the first update deadline as it falls Bank Holiday Monday where she lives in Scotland. She files the next two updates on time, but in April 2025 Shona is taken ill and has to cease working for nine months. She files the next three quarterly updates late on 30 January 2026. 

 Shona’s penalty profile will be:

MTD submission Due date Date filed  Points/Penalty
Q1: to 5 July 2024 5 Aug 2024 7 Aug 2024 1 point
Q2: to 5 Oct 2024 5 Nov 2024 5 Nov 2024  
Q3: to 5 Jan 2025 5 Feb 2025 5 Feb 2024  
Q4: to 5 April 2025 5 May 2025 30 Jan 2026 1 point
Q1: to 5 July 2025 5 Aug 2025 30 Jan 2026 1 point
Q2: to 5 Oct 2025 5 Nov 2025 30 Jan 2026 1 point and £200
EOPS: 2024/25 31 Jan 2026 30 Jan 2026  
Final declaration:2024/25 31 Jan 2026 30 Jan 2026  
       
 Total penalties:     £200

Shona may be able to prove she has a reasonable excuse for the late filing of three quarterly updates in January 2026, and if HMRC accepts that excuse three points and the penalty will be removed.

However, the first point from August 2024 hangs on Shona’s slate until September 2026, when it will expire if she has filed all the MTD submissions due in that two year period, and she hasn’t made any late submissions for 12 months.

Replies (75)

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By Hugo Fair
08th Oct 2021 19:07

Without meaning to distract from the main thrust of your clinical dissection of the espoused & real objectives of HMRC, I don't understand one of your points within the "3. Useful data" section:

".. as the MTD project matures, the quarterly data may also be used by HMRC to create informed interventions to help individual taxpayers pay the right amount of tax. For example HMRC will be able to see if a taxpayer has unusually high expenses in a category not expected for their trade."
How is this expected to happen - given that AFAIK only summary figures are to be included within the Quarterly submissions (not each individual transaction or even category sub-totals)?

Also, as per my separate post today at https://www.accountingweb.co.uk/any-answers/hmrcs-guidance-using-mtd-for... , your comment that "MTD ITSA also requires two annual reports: the end of period statement (EOPS) and the finalisation declaration, which replaces the SA tax return" is in line with my understanding of the (limited) official guidance ... but not what some developers (such as John Hemmings on this site) appear to believe.

Is there any likelihood of an official, high-level flow-chart that shows exactly what types of data have to be submitted via which files and in which order? We don't need the level of technical detail required by developers, but a comprehensive flow of data sources / submissions & subsequent manipulations / updates & corrections / declarations & sign-offs would be a good start!

Nevertheless I take your point that, whether the intent or not, the penalty regime is likely to hit hard (particularly amongst the lowest earning and unrepresented cohort) ... possibly to the point where, as with RTI, it's progressively 'pulled' (soft landing then frozen for review etc)?

Thanks (5)
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By Paul Crowley
09th Oct 2021 01:09

I think this adequately explains the purpose of quarterly reports.
Penlty farming at a rate of £200 per item, total of £1200 for 6 late reports, all six missed by just one day. A total of only 5 Calendar days
Under SA and tax returns that would need 6 Months

Who will suffer these penalties ?
The clients on mimimum income

Thanks (20)
Replying to Paul Crowley:
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By djtax
12th Oct 2021 09:59

Re penalties - HMRC's primary function is to collect tax not to coin it from penalties....they seem to have forgotten that.

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By swimmer
09th Oct 2021 10:28

Please note there is a petition to raise the MTD threshold from £10,000 to £85,000:
https://petition.parliament.uk/petitions/589102

Thanks (11)
Replying to swimmer:
By Husbandofstinky
11th Oct 2021 10:12

Thanks for the link

Just 175 at the point of signing though.

Thanks (0)
Replying to Husbandofstinky:
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By Jimess
11th Oct 2021 11:31

Just signed - at 259 when I signed it

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Replying to swimmer:
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By DMS
11th Oct 2021 10:20

It will fail, unfortunately, because they aren't interested. The same logic will apply as that which introduces covid passports for everyone - because they want control over everyone's lives. Those systems will be merged eventually - the points system for tax compliance will be replicated across all aspects of our lives.

Thanks (8)
Replying to swimmer:
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By BrianL
11th Oct 2021 10:27

Thanks. Have just 'signed' it.

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Replying to swimmer:
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By execprac
11th Oct 2021 11:07

Please circulate the Petition link to all your clients to support ... hopefully we can reach the 10,000 votes by 23 December 2021

https://petition.parliament.uk/petitions/589102

Thanks (2)
Replying to swimmer:
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By gillsoffice
11th Oct 2021 11:07

Many thanks for the link - just signed it!
Why aren't our governing bodies (ACCA/ACA/AAT etc) publicising this petition? they are supposed to be acting for us, their members. This petition should easily get enough votes from accountants alone to be debated in parliament. I doubt many of our MPs will even have heard of MTD, and definitely won't be aware of the impact it will have on their voters. Let's get the petition publicised and signed and bombard our local MPs with info about MTD and the pointless targeting of small businesses.

Thanks (6)
Replying to gillsoffice:
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By djtax
12th Oct 2021 10:09

Sadly in my 25 year career I have seen that the vast majority of accountants do not get involved - yes there is a very active number here on AWeb but that's only a very small proportion of all accountants.

Thanks (0)
Replying to swimmer:
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By daveadcock
11th Oct 2021 14:58

Thanks for the link, I've emailed all of my clients.
Was thinking, though, maybe it would be a good idea to have a separate thread with the petition as a heading as some may not have read this one (I nearly didn't).

Thanks (1)
Replying to swimmer:
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By djtax
12th Oct 2021 10:05

I have just signed it though so far showing well under 1000 signatures. This may well reflect the lack of awareness amongst the general public on this issue given HMRC/Gov utter failure to make any effort whatsoever to publicise this proposed far reaching fundamental change. Compare the lengthy run up to when SA was introduced in the mid 1990s - who could have missed the very effective Hector the Inspector publicity campaign. Its almost as if HMRC are deliberately keeping the general public in the dark now.

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Replying to djtax:
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By johnjenkins
12th Oct 2021 10:16

It's called passing the buck. HMRC will not make the general public aware, because they know that we will have to. Nearer the time when business have to comply is when you will see an uproar. At the moment the pandemic and lockdown has knocked the stuffing out of many. People on payroll has only just reached levels pre-pandemic. We have another year, summer holidays for many before people will start to be heard.

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By Moo
11th Oct 2021 08:58

2. Tax estimates - This probably the most fallacious excuse of all the excuses being trotted out by HMRC and software developers. While it may well have some relevance for the self-employed it will produce tax estimates which are actively misleading for those with rental income.
How many private landlords have their rental profits as their only or main source of income? I suspect very few, I have not yet met one and over a long career I have acted for a fair number of clients with rental income all of whom have also had combinations of PAYE earnings, pensions or dividend income which would make the MTD tax estimate too low. In my experience landlords who own enough properties to actually make a living om renting generally do so via a limited company.
I suggest a campaign to remove rental income from the proposed MTD regime.

Thanks (2)
Replying to Moo:
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By SXGuy
11th Oct 2021 18:33

We all know we'll be saying the phrase "oh take no notice of that" pretty often

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By Rgab1947
11th Oct 2021 10:06

Ah so now we know the real reasons. Its the penalties! A lucrative income stream especially for the digital tax challenged which most likely will be a lot if turnover is kept at £10k.

Feel really sorry for the elderly with their little pension pots now becoming a digital nightmare.

#3 is a joke right? With the garbage going in we are going to get decisions made on garbage. Wonderful!

Thanks (4)
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By agknight
11th Oct 2021 10:07

My work is predominantly in the south west tourism industry. I do not see how entering quarterly data will give any indication of annual tax when the quarters may vary so wildly. Even in a steady year Easter may move from March to April.
Also the client is eaither savvy enough to know where they are going, or they are not. Producing clunky quarterly figures will be of no direct help.

Thanks (6)
By Duggimon
11th Oct 2021 10:13

Great summary, thanks Rebecca.

Clearly and concisely makes the point that the HMRC justification for this are, despite their best efforts at marketing the new scheme, either fallacious or entirely to the benefit of the government and the detriment of the taxpayer.

I would only add that any taxpayer savvy enough to keep the kind of records that would provide a reliable estimate of tax due (per point 2) would be more than savvy enough to figure out their likely tax bill. The hard part is keeping reliable records from which a decent estimate of taxable profit can be extracted, once you've done that any donkey can work out the tax due.

Thanks (1)
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By Agutter Accounts
11th Oct 2021 10:11

What stuff are those who think up the likes of MTD for ITSA on? There has been a trend over many years of putting the onus on the taxpayer to get their tax right and the return in on time, and do it correctly so as to save HMRC money. In effect they expect us as agents and accountants to do the heavy lifting for them.

A client of mine used to work for Customs before the merger with Revenue. he will tell you that when he left a lot of experienced staff were let go and inexperienced - and cheaper -staff recruited to save money. Well, you get what you pay for as they say.

MTD for ITSA will just shove administrative cost on to the smallest businesses like my clients who are least able to cope and then slapping their wrists if they struggle to meet deadlines and do things right. Bunter's remark "F*** Business" seems to permeate right through government it seems.

Thanks (7)
Replying to Agutter Accounts:
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By johnjenkins
11th Oct 2021 10:31

You made some really good remarks, then go and spoil it all. George Osborne is the culprit not Boris. I have a sneaky feeling that Boris might go as far as to get rid of IR35 and quarterly updates. Reason, cost.

Thanks (1)
Replying to johnjenkins:
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By Agutter Accounts
11th Oct 2021 11:04

Ah! Great God Bunter who can do no wrong. Perhaps seeing you are an acolyte of his you could put in a good word so he can pressure his chancellor into a bit of common sense,

Thanks (3)
Replying to Agutter Accounts:
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By johnjenkins
11th Oct 2021 11:33

I already have.

Thanks (2)
Replying to Agutter Accounts:
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By Beef curtains
11th Oct 2021 15:03

He will be if he rids us of this MTD bullshit

Thanks (0)
Replying to Beef curtains:
paddle steamer
By DJKL
12th Oct 2021 10:22

Careful, remember "Who will rid me of this troublesome priest" and the consequences.

Thanks (0)
Replying to Agutter Accounts:
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By execprac
11th Oct 2021 11:13

Please circulate the Petition link to all your clients to support ... hopefully we can reach the 10,000 votes by 23 December 2021

https://petition.parliament.uk/petitions/589102

Thanks (1)
By ireallyshouldknowthisbut
11th Oct 2021 10:20

I see no reason why tax estimates would be any more accurate in taking low quality unchecked data (remember you have 6 minutes per submission to get the data from the client, check it and file it) than they would be usual "rule of thumb" basis. Ie "third of my turnover" etc.

Indeed there is a real issue that if HMRC estimate it, clients will think its right as HMRC says so.

That is to say poor estimates from HMRC could be actively harmful to many clients. For example if they classify a loan as income they could think they have a huge bill. Or classify drawings as an expense and think they don't have one.

Few business have static incomes quarter to quarter, especially on a cash basis (it tends to even out more annual than quarterly) so the figures will be very poor, unreliable and so ultimately pointless.

Indeed the only siauti0ons where they might be accurate - very simple, very stable business - the business owner will almost certainly know what their bill is- a bit more or a bit less than last year depending on how much or little they worked.

Its quite desperate stuff to suggest this is a positive. Tax payers would probably say "yes" if asked "would you like a regular estimate of your bill?" of course they would. They however are not being asked "would you like to go through a huge amount of pain to get a misleading answer?"

Thanks (8)
Replying to ireallyshouldknowthisbut:
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By Agutter Accounts
11th Oct 2021 10:28

Yes, as a management accountant by background, a budget is a reasonable estimate given the facts known at the time it is compiled, of what you expect to happen over the next year. You monitor it against performance and adjust accordingly.

But for the smallest businesses this is just not possible and as you rightly say there are seasonal and other fluctuations.

I have several clients whose "on account" twice a year payments to HMRC are going to need reviewed shortly in a downwards direction because their turnover is significantly lower so far this year. It will be a tab in the dark truth be told.

HMRC takes a one size fits all approach assuming there is a higher level of computer literacy than there is. That's fine for bigger businesses.

This proposal would have more credibility if the threshold was the same as VAT. I do quarterly accounts to coincide with VAT quarters for several clients and that is generally beneficial to the client as well as meeting a tax deadline.

Thanks (3)
Replying to Agutter Accounts:
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By execprac
11th Oct 2021 11:11

Please circulate the Petition link to all your clients to support ... hopefully we can reach the 10,000 votes by 23 December 2021

https://petition.parliament.uk/petitions/589102

Thanks (0)
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By johnjenkins
11th Oct 2021 10:27

Great article, Rebecca, but I don't buy what HMRC are saying (what happened to it'll reduce errors?). Let's take the tax estimate. HMRC can easily go back over the years of the smaller tax payer and that will give them a far better estimate of the tax payers liability as most small entities will not change that much. HMRC can also see how business change, e.g. the younger ones might increase their business every year and the older ones might decrease business. I still think that quarterly updates is a prelude to tagging every transaction so that eventually they will be cross checked.

Thanks (2)
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By taxfellow
11th Oct 2021 10:27

And of course bear in mind that this is targeted very much at the sector which is the cannon fodder of HMRC's compliance effort - small business. A principal, but unstated, policy driver for this is HMRC's wish to get rid of incomplete records, having which is seen as akin to a moral failing. Remember the farce of Business Record Checks? HMRC's immutable view is that if your records are incomplete your accounts will be wrong - nonsense of course - and no doubt HMRC expects incomplete records to disappear once this new requirement is imposed. I expect that is wishful thinking. Further, post-MTD taxpayers should also be wary of the penalty for failure to keep records requisite for the purpose of making a correct return at s.12B(5) TMA 70 - max £3,000 - since MTD will make incomplete record cases all too easy to spot. It will no doubt drive selection parameters for enquiry. It's all so sadly predictable.

Thanks (3)
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By execprac
11th Oct 2021 10:30

Thanks Rebecca

I am still not convinced that a £10k threshold is any kind of cut-off for digital records, quarterly reporting and a draconian penalty regime for lowest earning "self-employed" let alone "landlords"?

Any "taxpayer" (if that is the case?) on this level of earnings will not want to spend any time reporting (possibly) meaningless quarterly data to HMRC and should not be mandated to acquire unnecessary software, to produce a tax estimate and possible payment that (if that simple) ... would take less than 30 seconds on a calculator

Please support the campaign for common sense and support the raising of the Income Threshold for MTD SA to the VAT Threshold ... I'm sure you know this makes sense

Here the link ... https://petition.parliament.uk/petitions/589102

Thanks

Thanks (2)
Replying to execprac:
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By johnjenkins
11th Oct 2021 10:44

I have signed the petition, however even if you get the required amount Parliament will just give you (at the moment) the standard bull.

Thanks (1)
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By arthvirg230
11th Oct 2021 10:38

Isn't an easy option just to file nil returns all year round and then one at the end showing the right figures?

and who is going to deal with all the appeals against late filing penalties ? HMRC have no staff!!

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By Clare Mitchell
11th Oct 2021 10:39

Thank you for confirming what I've thought from the start. The only benefit of MTD ITSA is for HMRC, using penalties as an income-generating initiative (and maybe also, as a side effect, for software companies, and accountants who are able to expand their paid services). Those who need and understand up-to-date data on profit and tax due already have access to it! My clients achieve the same benefits by keeping regular records in whatever format works for them, and using my "put 30% of extra income away for tax" guidance. I actually have sympathy for HMRC staff who will have to deal with this, because as we all know, exceptions and queries are always underestimated. Your examples were also very appropriate, as so many people (i) don't recognise themselves as businesses to start with, and (ii) can't and shouldn't stop Real Life taking priority over making returns because they "have" to.

Thanks (3)
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By bluebaron
11th Oct 2021 10:49

I'm becoming increasingly convinced that HMRC are just doing this for the penalties, which is a disgrace. I can see no benefit at all of quarterly updates for a client with say £20K sales, and £10K costs -especially when any old trash can be submitted!!

Thanks (2)
Replying to bluebaron:
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By execprac
11th Oct 2021 11:09

Please circulate the Petition link to all your clients to support ... hopefully we can reach the 10,000 votes by 23 December 2021

https://petition.parliament.uk/petitions/589102

Thanks (1)
Replying to bluebaron:
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By tedbuck
11th Oct 2021 12:11

Now we get to the nitty gritty. HMG said they wouldn't put up taxes and have been following the penalty trail ever since. GDPR, AML and anything else you can think of like MTD for ITSA. It's all aimed at penalties and particularly the back pocket merchants. HMRC cannot be bothered to sort these people out as it requires them to work which is just too much for them so catch them the back way instead. Doesn't matter if you clobber lots of innocent people at the same time - it's all money.

As for the rubbish about quarterly returns I have it good authority (HMRC's Solicitors unit) that they aren't actually bothered about them so it is just an excuse to levy penalties.

Lies, damned lies, statistics, politician's utterings and at the top HMRC's claims. A new high for HMRC - at least they are top at something.

Get the Press on the subject, tell the taxpayers what will happen and how much it will really cost them and see the voters fly away. Perhaps we should form a new party - The taxpayers' party.

Thanks (2)
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By petestar1969
11th Oct 2021 11:12

This all sounds like it should be done but it should also be someone else's job. I've decided that's it, I'm retiring from accountancy on 30 April 2024, assuming we're all still here and haven't starved to death paying gas bills or caught mystery viruses, of course...

Thanks (1)
Replying to petestar1969:
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By bluebaron
11th Oct 2021 11:48

The government should be made aware that it is quite likely in a couple of years time there will be a shortage of tens of thousands of essential workers -accountants. This could easily be remedied, by abandoning the rollout of MTD for IT.

Thanks (1)
Replying to bluebaron:
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By petestar1969
11th Oct 2021 11:52

I agree but I'll be 55 by April 2024, so equity release and a lump out of my pension will be available. I'll need a pretty good reason to stay in, with or without the MTD ITSA nonsense. Working at Tesco sounds a better idea.

Thanks (2)
Replying to petestar1969:
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By johnjenkins
11th Oct 2021 12:06

Talking of Tesco's (and other supermarkets), have you noticed how many staff are shopping with those trays en bloc. No wonder the shelves are empty, no staff to fill them up. I also notice no shortage of Christmas stuff. You'll have no problem getting a job there.

Thanks (1)
ghm
By TaxTeddy
11th Oct 2021 12:14

Honestly, I can see why good practitioners are retiring.

Despite a well-crafted article I gave up on the penalties illustration as I was losing the will to live.

The whole issue of the penalty system could be the subject of a good comedy sketch. If only the Marx Brothers were still around.

And, as Chico once said "There aint-a no sanity clause...."

Thanks (3)
Replying to TaxTeddy:
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By johnjenkins
11th Oct 2021 13:32

Or a Brian Rix Whitehall farce.

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By North East Accountant
11th Oct 2021 13:16

1. Proof of Homework - all that effort and I bet not a single gold star from HMRC.....and like everyone doing homework, it'll be just before the deadline.
2. Tax Estimates - putting a finger in the air and thinking of a figure will be closer to the mark for unrepresented taxpayers.
3. Useful Data - stop it my sides are killing with all the laughing.
4. Late Penalties - a nice little earner for HMRC.....as no-one will have a clue how the figures are arrived at (VAT case recently I asked for a calculation of the interest and HMRC said "that's what the computer says - I can't get a breakdown").

Thanks (1)
Replying to North East Accountant:
paddle steamer
By DJKL
12th Oct 2021 10:33

And how good is rushed homework?

On submitting a philosophy essay at university (something to do with aesthetics I recall) my tutor's written comment on same was that it looked like it was written the night before- he was perceptive as it was- my skimmed reading of Collingwood and Tolstoy was very evident. (I seem to recall it was a very narrow pass, just)

Virtually the only bit of latin I still remember seems a better approach- festina lente.

Thanks (1)
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By flightdeck
11th Oct 2021 14:41

"The data HMRC receives from the quarterly updates will be used by the government to make macro decisions about the state of the economy"

Once again. comedy gold from the Government.

As if.

Thanks (1)
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By Kaylee100
11th Oct 2021 16:25

Will there be a digitally excluded option? A relative has rental income in excess of 10k and a state pension, but doesn't use a computer. He doesn't own a computer.

He does have a smartphone but uses it for a minimum number of applications - basically those his son has set up. His only son doesn't live near him so it's not easy to help.

He does have an accountant who does his year end SA, but he does his own book keeping.

In a similar situation for VAT, we got an agreement for the client to continue to keep her books on paper and use us to file the totals in the old way. She, as an additional argument, had no significant level of profit to enable her to pay for a full bookkeeping service on top.

Do we know yet if there will be similar digitally excluded rules for MTD for ITSA?

Thanks (1)
Replying to Kaylee100:
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By Hugo Fair
11th Oct 2021 16:37

Promised (in theory), but undefined (in practice)!

Thanks (2)
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By DaviePark
11th Oct 2021 17:04

From the petition -
MTD Making Tax Digital Income Threshold is £10k p.a. Change the Threshold to the same as the VAT Threshold £85k p.a.
and
At 100,000 signatures, this petition will be considered for debate in Parliament.

Signatures reach 100,000 . . .
Chancellor thinks, "Hmmm, maybe time to drop the VAT threshold. What do you think, chaps?"

Oh, my aching ribs.

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