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How chosing MTD software for the practice is like Harry Potter's Sorting Hat
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MTD tax software options: Choose your destiny

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To hear it from some accountants, Making Tax Digital has always lived in the realms of fantasy. So why not turn to Harry Potter to demystify the impending software conflicts?

15th Jul 2021
Editor in Chief AccountingWEB
Columnist
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Making Tax Digital for Income Tax (MTD ITSA) is set to trigger a revolution in tax software over the next couple of years. Over the next 18 months, tax agents need to decide whether to retain their allegiance to their existing suppliers or turn to the new entrants jostling to gain their loyalty. 

It’s tempting to imagine the great tax software shakeout as a ceremonial procession like the early scenes in Harry Potter where new pupils are assigned to their Hogwarts houses by the Sorting Hat.

Accountants entering the grand tax software hall are met with an array of brand logos. On one side are the shields of incumbent suppliers such as Sage, IRIS, Wolters Kluwer, and Thomson Reuters. Opposite them are cloud-based newcomers such as Taxfiler (IRIS), Capium and Nomisma. 

And don’t forget the developers previously known for their bookkeeping tools that have moved into tax compliance - Xero and FreeAgent. 

But lo, was that a silent green shadow lurking behind one of the columns? Could it be that QuickBooks, too, will join this fray before we get to 2023? The giant US developer already handles personal tax filing in the US and other territories and has made noises about expanding its compliance tools for UK users, but nothing has shown up on our radar yet.  

For the moment, QBO users have to rely on its integration with TaxFiler for compliance, but the pressure is mounting for it to join the MTD fray. As QuickBooks enthusiast and AccountingWEB member Charlie Carne put it recently: “Everyone has to have an MTD for income tax product. If they don’t, they won’t be in the game.”

MTD ITSA: The challenges ahead 

In her analysis of MTD ITSA reporting requirements in February Rebecca Cave noted: “For each trading or property business the taxpayer operates they will have to submit a quarterly report of income and expenses in defined categories. The taxpayer will also have to submit an end of period statement (EOPS) for each of those businesses.”

The second phase of MTD is also a massive new business opportunity. According to HMRC estimates, there are 4m businesses that pay income tax, but who are not VAT registered. Assuming they are not already keeping digital business records, all of these businesses or someone acting on their behalf will need to tool up before they enter the MTD ITSA regime in April 2023

The transition to MTD for income tax for all these businesses will impose numerous new demands on firms, including:

  • Each trading or property business the taxpayer operates will have to submit a separate quarterly report of income and expenses. VAT and income tax periods may not align, increasing the number of times you need to alert and chase them.

  • Initially MTD for ITSA will run in parallel to self assessment, but the intention is to incorporate all of the current forms (employment, investment and trusts and so on) into a final annual filing. 

  • Linking bookkeeping records and MTD filing milestones with internal programs for managing client communications, monitoring client workflows, job status and billing.

As Rebecca Cave indicated, the filing formats, deadlines and requirements have not been fully resolved and no single supplier currently offers all the necessary tools in one place yet. 

Wolters Kluwer’s CCH ProSuite/Twinfield combination and IRIS/Kashflow can run from data capture and bookkeeping through to filing, but both lack CRM functions or rely on partners for the client communication bits.

Capium and Nomisma are close, but again, miss some of the final elements that will be essential when the MTD ITSA workload gets serious.

Otherwise, we’re back where many accountants found themselves in 2017, before the government switched the MTD project over to VAT. Practitioners are going to need to decide which supplier they trust to look after their MTD ITSA requirements and work out what they need to add to or adapt in their existing set up to manage the expanding workload.

Don the sorting hat

At this point, imagine a big hat being placed on your head. It will start an imaginary conversation with questions that probe your tax software needs and desires. When the hat is lifted and the decision is made, which community will you join as the great tax software shakeout unfolds?

Q: Are you planning to build your firm around a core technology stack sitting on top of one of the leading cloud accounting platforms?

The most glaring behavioural change we have seen within the accounting profession during the MTD era has been the mass migration to cloud accounting platforms. Some of the most enthusiastic cloud pioneers now think “ecosystem first” and look for practice tools they can integrate with their bookkeeping platform. Xero is the most obvious beneficiary of this tendency. It responded to the needs of its partner community by buying up an obscure tax software app and turning it into a free, all-in application, Xero Tax. 

Now available for preparing and submitting 2020-21 self assessment tax returns, Xero Tax comes free for its accountant partners and has the added benefit of fitting seamlessly into their existing set-ups.

Don’t forget or write off Sage, Nomisma and Capium. Each has its adherents, but none of them offer the same access as Xero to third party apps that can plug gaps in the firm’s technology stack. Once QuickBooks has an MTD ITSA solution in place, it could compete on this front, but as has been noted already, the US developer has gone a little quiet on this point in recent months. 

Q: How big is your firm: do you already run a mixed network of best of breed apps and legacy systems left over from previous acquisitions? 

Have no fear, the Sorting Hat hasn’t overlooked your needs. Of course you would love to realign the firm around an underlying technology platform that could integrate and untangle all the different applications you have to manage. IRIS, Wolters Kluwer and Sage are all working towards that dream - but you’re probably already familiar with the glacial speed at which they seem to be moving. 

While you wait for developers to realise your dreams of interoperable bookkeeping, compliance and practice management apps, you are going to need to fill in some of the functional gaps ahead of 2023. You can experiment with some of the interesting onboarding and workflow apps that operate successfully alongside the cloud bookkeeping platforms - Senta, Karbon, Practice Ignition and AccountancyManager spring to mind here - and see how effectively they can adapt to life alongside your other best of breed and legacy programs. 

Cloud tax and practice apps are still at a relatively embryonic stage, so it’s possible they could mature to the point where you’ll be able to migrate groups of clients across to the second generation cloud solution. 

Q: Do you see MTD ITSA as an opportunity to expand the business by catering for all those non-digital prospective clients?

The legacy software and integration issues aren’t just an issue for big firms. Most small practices face similar issues, but on a smaller scale. If you’re comfortable with software and processes that work well for existing clients, the least disruptive option is to stick with what you’ve got as long as it works and upgrade as the need arises.

But what about all those entrepreneurs creating post-Covid startups to build new working lives around their inner passions? Accountants can start side gigs of their own too and many have been doing so in recent years to cater for the digital generation. As well as bringing in new business, this clean slate gives you an opportunity to build a sleeker, more cost efficient client management and compliance infrastructure.

Anyone mulling this idea over will already have experience with many of the tax tools available and will follow their instincts when it comes to kitting out an entry-level, MTD-compatible service line. Taxfiler marked out this territory first and with its acquisition, IRIS demonstrated that business software developers are also aware of the two-prong approach. Sage’s Business Cloud Accounting product transition fits into the same template, while Xero and FreeAgent are coming to the party from the other direction by expanding their bookkeeping platforms into tax compliance.

Q: Are you looking forward to MTD for ITSA as an opportunity to shake up your client base and streamline internal systems?

So, you might be a Nomisma or Capium fan who’s miffed your preferred product wasn’t mentioned in the last response. These programs should certainly be able to handle the workload of a startup practice moving into sole trader territory, but established practices are less likely to recalibrate their all their systems for a relatively low-margin client segment.

The all-in-one cloud suites would fit better into a broader practice transformation project or true startup where the firm was committed to taking all of its clients into a unified cloud-only environment. 

Capium and Nomisma both offer a chance to leave the desktop behind and jump into the cloud, without having to take on all the technology research and implementation effort required to stay ahead in the app ecosystem stakes. Clients and your staff would have just one system to learn. Remember, however, that your firm will rely on the developer to keep up with your needs as the business develops. As we have already seen, developers of all sizes can sometimes struggle to keep up. 

Q: Are you motivated by cost and looking for the cheapest solution?

It’s a natural tendency for accountants to look for potential economies. If it’s low cost software you want, the lure of FreeAgent is hard to overlook. All you need to do is push all your clients at NatWest bank, sign them up for the free software and train everyone to use it. You and they will certainly save money on software, but that’s rarely the most significant cost involved in compliance work. FreeAgent has a tidy collection of proven third party apps that will cover the most common client scenarios, but won’t match up to the Xero marketplace if you and your clients develop more sophisticated app tastes. While Xero has more of a premium price tag attached to its bookkeeping platform, its compliance modules come for free as part of the accountant’s subscription. 

If you’re familiar with the old putdown, “free software is worth what you pay for it” and are looking instead for pedigree tax software for a bargain price, then Taxfiler still offers good value for money in spite of recent price increases. QuickFile and some of the other budget bookkeeping apps such as Pandle are also worth a look. 

Q: Are you still not sure which way to jump, or don’t want to rock the boat until you’re absolutely certain what’s required, and when?

We all know that the MTD saga is as stuffed with plot twists and cliff-hangers as JK Rowling’s sorcery epic. And it’s human nature to avoid change. So while the tax software revolution takes place, the biggest proportion of the accounting population will probably rely on their existing providers to cope with new requirements. IRIS, Sage, CCH and Thomson Reuters - not to mention VT Software, BTCSoftware and TaxCalc - all have defensible positions in this marketplace from which customers can look on as the competing software federations grapple for supremacy. 

Who’s likely to win?

Thanks to the decision to prioritise VAT, the cloud bookkeeping developers reaped the biggest harvest from the initial MTD software boom. It’s hard to ignore the credentials of large, publicly quoted multinational software groups that have the internal resources to upgrade their products to keep up with HMRC’s digitisation programme. But do they really understand how serpentine and elusive the UK tax system? After winning the first round of MTD, Xero and QuickBooks are going to be fighting on home turf for the likes of Sage, IRIS, Thomson Reuters and Wolters Kluwer when it comes to income tax.

But could we be making the mistake of viewing commercial tax software as the magic wand that will defeat the demons of MTD? 

Digital banks like Countingup, Anna Money and NatWest Group subsidiaries Mettle/FreeAgent are lining up at the end of the hall offering interesting alternatives to the usual suspects. Sole traders have never had much time for bookkeeping systems, so why expect them to change their habits for MTD? Instead, we are told, intelligent business bank accounts will do the bookkeeping for them and help them ready up their quarterly submissions to HMRC for both VAT and income tax.

With all those millions of entrepreneurs also searching for answers to the MTD mystery, could the digital banking upstarts sneak in and run off with the biggest rewards? That’s a tale for another occasion.

Replies (47)

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By K81
15th Jul 2021 09:28

MTD for self-assessment makes me sad that I am too young to retire.
The practice that I work for is old fashioned in that we have a payroll department, a VAT team & an accounts team together with our little two (wo)man tax department, there is no mixing between the departments.
The tax department still has a high percentage of paper tax returns as we have a very high number of pensioner clients, many with rental properties, who dislike computers & want nothing to do with them & insist on paper tax returns each year, These people don't have mobile phones either, myself & my colleague are happy with this as our computer skills are very limited anyway.
I am very concerned about the MTD & have explained to my manager but we have been told not to worry, all will be well. :(

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Replying to K81:
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By Geoff56
15th Jul 2021 10:31

I think that MTD for ITSA will herald retirement for me, if it goes ahead as planned. I believe that neither I nor my clients will cope with it. I just hope that I can actually afford to retire, when it comes to it.

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By Lutondata
15th Jul 2021 10:13

Having used VT and Taxcalc for years, I wanted a more integrated system. I came across Taxfiler through QuickBooks and absolutely love it. Its the swiss army knife of software at a great value price. QB don`t need compliance software as it integrates perfectly with taxfiler.

Currently testing Senta, who have promised they will connect with taxfiler, so thoroughly sorted.

I prefer suppliers to be good at what they do rather than trying to cover too many angles?

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By johnjenkins
15th Jul 2021 10:13

John, what's wrong with VT??????????????
One of the best in the market and you don't even mention it.
All these new fangled "cloud based" upstarts will fall by the wayside and you will be left with the proven and trusted. MTD in it's fully functional form is at least 5, maybe 10 years off and I doubt very much if the quarterly updates will bare fruit.
HMRC are in such a disarray they haven't got a clue what day it is never mind getting MTD up and ready. Their computer systems aren't working properly. They can't even get the VAT right when switching over to the new site. How many Accountants have had to register an Agents Services Account just to submit their clients VAT return. It's a joke. Brian Rix and co would have had a field day with this lot.
So, John, you will find the smaller Practice will do what's necessary as and when or sell up.

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By AdamMurphy
15th Jul 2021 10:31

I don't know what the obsession with cloud is. I will use what suits me whether it's a product directly on my laptop or one in the cloud.
Why do some people automatically calculate "in the cloud = must be best"?

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Replying to AdamMurphy:
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By johnjenkins
15th Jul 2021 10:39

It's because the media and software companies say it is. Technology is running away from the normal person. That's one of the reasons there are so many scams. The normal person can get easily confused on who to trust.

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Replying to johnjenkins:
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
15th Jul 2021 10:32

You make your point well, John, but so far I haven't heard anything from VT Software about its plans for supporting ITSA filing - it's a good prompt for me to give them a call about that.

You're also right that there will still be some twists and turns in the MTD plot, but I would think it advisable for practitioners to plan ahead for the scenario as it stands. That's why I thought it was time to start the discussion with my water-testing article.

I'd also be curious to hear what your thoughts were when VT said it was planning to cease development of its VT Transaction+ bookkeeping package back in 2017. They rescinded that decision in the light of customer demand, but I think it justifies my primary focus on cloud-based solutions to the MTD ITSA challenge.

If you have hundreds of personal tax clients reporting every quarter, how are you going to input all their transactions to VT?

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By johnjenkins
15th Jul 2021 10:49

VT has adapted, by popular demand (that shows you how good the product is) and I'm sure they will go on adapting without falling into the "sage" trap.
The big companies with dosh to splash will try out all sorts of stuff, until they find one that suits.
The problem as I see it, and I've said it before, is technology is running far too ahead of itself for people to catch up. We don't seem to have a period of consolidation to get to grips, so that it allows us to move forward. Can you imagine what it was like when you're riding your horse and suddenly there are cars and trains and planes about.

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By cbp99
15th Jul 2021 11:18

To suggest an alternative question - "if you have hundreds of personal tax clients" messing up online software that they don't understand, how are you going to .........

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By North East Accountant
15th Jul 2021 10:18

The desktop legacy product providers have been quite happy to have compliant (but boring) products with development limited only to complying with new tax rules and virtually no new (and exciting) product features for years.

The cloud crowd are newer, have more exciting features and have turned a lot of heads but are still a long way from being having complete products that can deliver all the functionality needed.

By February 2022 small Accountants and Bookkeepers (bigger firms will cover all software) will have to pick the software horse they are going to ride in the MTD race, and pray they haven't picked a donkey that falls at one of the MTD fences that springs up in the years ahead.

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ghm
By TaxTeddy
15th Jul 2021 10:23

Software?

It's spreadsheets, young man. All the way down.

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Replying to TaxTeddy:
Tornado
By Tornado
15th Jul 2021 15:25

TaxTeddy wrote:

Software?

It's spreadsheets, young man. All the way down.

Plus TaxCalc's MTD for ITSA Bridging Software (in development)

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By KenKLM
15th Jul 2021 10:43

Only thing I will be planning is early retirement . It will be utter chaos .

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
15th Jul 2021 11:10

Update from Nomisma on their plans... I didn't have time to check all the facts before publication, but Nomisma's product owner Ashleigh Hall got back to me to confirm that the target is to be fully MTD-compliant by the end of the year, so that customers have a year to refine their processes before MTD ITSA filing becomes mandatory.

"We've already built digital links between our bookkeeping and payroll modules, which automatically populate annual self-assessments for employments, self-employment, partnerships and dividends," Hall wrote.

"Workflow is going to be key, so we've designed an end-to-end workflow process which will be adapted to quarterly submissions."

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Replying to John Stokdyk:
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By cbp99
15th Jul 2021 11:17

How can they be "fully MTD-compliant" when the rules have not yet been finalised, so we do not know what compliance will actually involve?

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Replying to cbp99:
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
15th Jul 2021 12:11

Note that the Nomisma product leader said the "target" was to be fully compliant. He's obviously got experience of HMRC policy quirks and the occasional frustrations of software development.

That said, it is a public declaration of intent to comply and I'm happy to accept that on face value.

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By johnjenkins
15th Jul 2021 15:29

John, You're accepting Nomisma on "face value". Sounds like a scam to me. (joke)

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By Peter-S
15th Jul 2021 11:24

Software people manage to make all this sound so (relatively) easy. As accountants I'm sure most of us will be able to cope with whatever turns out to be the 'best' solution for ITSA mtd but its the other side of the coin that is the problem - clients. They either need training, for some while I would guess in many cases, or they need someone to do it for them. Again, all tasks that an accountant can cope with. Just a pity that it will be most clients all at the same time and as an additional work load on what we are already doing. The word 'chaos' gets mentioned regularly and I can see why.

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By ireallyshouldknowthisbut
15th Jul 2021 11:40

I am keeping well out of it for as long as we can.
Clients with software are largely limited companies, I only have 2 or 3 'other' businesses who use it.

The rest are all excel (at best) type clients for whom I will be doing what those who still file using the old school VAT returns are doing, keeping their heads down. Staying under the radar. There is virtually no chance us getting those all properly digital, so little point in trying.

If my "poo fling" strategy fails I might well just drop SA clients and stick with companies as there is no point sacrificing my sanity on HMRC's alter of incompetence.

Anyone want a block of 300 odd SA returns bringing in £80k PA? 3 day week on the company side and watching everyone else sweat blood seems more attractive than the £60k or so profit i make on those for about 2 days/week.

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Replying to ireallyshouldknowthisbut:
By ireallyshouldknowthisbut
15th Jul 2021 13:39

hang on, not 300 odd, 100+ of those are directors. 200 ish.

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By Hugo Fair
15th Jul 2021 11:55

"The second phase of MTD is also a massive new business opportunity" ... really? For whom?

Even if not all the 'threats' from Aweb members to retire/sell (or just give up) are true, there's no doubt that there will be a substantial and accelerating loss of those with most of the experience of business/accounting/tax (but not technology).
Sound familiar? It's what has been happening within HMRC over the last 10 years - which is why problems are no longer frequently spotted in advance and are next to impossible to get fixed.

If you combine all the above and add-in the short-term motivation of cloud suppliers (and without any long-term vision or competence within the Treasury and HMRC), then you "don't need a weatherman to know which way the wind blows" as Mr Zimmerman magnificently put it!

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
15th Jul 2021 12:57

One other question that may have been missed in the original article: Q - Are you thinking of bringing client bookkeeping in house to ease the transition and expand the client base?

This is a sub-question of the one about building up a lower-tier service line to cater for MTD ITSA and the inevitable laggards who will struggle to comply with digital record-keeping requirements.

There's been a very visible shift in this direction from entrants to our Accounting Excellence Awards over the past 4-5 years and initial samples indicate that momentum may have picked up again this year.

Talking to the people who have done it like Lucy Cohen and Rebecca Benneyworth, it provides an opportunity to whack in expenses capture and cloud bookkeeping linked to bank feeds, plug it into an MTD preparation and filing tool and work towards a "hands-off" automated process. There are several webinars that touch on this approach including this one:
https://www.accountingweb.co.uk/accountingweb-live/tax-talk/making-tax-d...

... and several more MTD software available via the AccountingWEB Live On-Demand page:
https://www.accountingweb.co.uk/accountingweb-live/on-demand

FreeAgent, Xero Tax, Capium, Nomisma, QBO/Taxfiler and Sage all look up to the job for this approach (with added expenses capture apps where necessary). If you've already tackled it, it would be great to hear you're observations. As a follow-on, we'll try to pull together practical suggestions and software recommendations into a separate article.

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By johnjenkins
15th Jul 2021 15:35

So, John, a decorator earning circa £30k a year is going to pay - how much - for bookkeeping services???????????????????????????????
Unfortunately I don't think you have a clue how the smaller business operates. (no disrespect intended)

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Replying to johnjenkins:
By ireallyshouldknowthisbut
15th Jul 2021 16:32

its more the landlord with one rental who currently pays us £399+VAT for husband/wife tax returns from agents statements + mortgage statement + p60's and we deal with it in 2-3 hours (less if no problems), and now we have to do 10 filings a year with five contact points vs one. I know from VAT you need to charge at least £75 per contact point, so that's minimum £300+VAT for the pointless 10 returns on top of the existing one. What worse of course is this is only 4 months a year. If you employ someone do to this, they will be idle for 8 months a year, unless you conjure up work for the idle 8 months, or increase your contact points to 13 a year (heaven forbid) and process monthly. Its commercially very awkward even if you want to offer this service as it would be a very high volume of client interaction and chasing around. Computers wont solve it!

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Replying to ireallyshouldknowthisbut:
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By johnjenkins
15th Jul 2021 16:49

Of course HMRC understands all of this.

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Chris M
By mr. mischief
15th Jul 2021 13:57

My solution to all of this remains what it was 3 years ago. MTU.

Making Tax Up.

A simple file for all clients who don't want to engage with software every quarter, pre-populated with the data I am going to file for them every quarter unless something comes out of right field like Covid 26.

Just avoid the obvious pitfalls. No round sum filing. No accidentally filing returns for September 2025 in the middle of May 2025. Stuff like that. The numpties at HMRC have no chance of working out that MTU is being used.

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Replying to mr. mischief:
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By North East Accountant
15th Jul 2021 19:46

So you're going to advocate to your clients they commit fraud....

Doesn't sound like a good plan to me.

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Replying to North East Accountant:
Chris M
By mr. mischief
16th Jul 2021 08:16

Not at all.

Many are already fully MTD compliant. Those that are not will have the option of:

1. Moving to quarterly information submission that is MTD compliant at extra cost, which will be £200 plus VAT per year minimum. So a doubling of fees minimum for a simple 1 property BTL owner.

2. MTU at minimal extra cost.

No fraud here, as with the current system by the end of each tax year exactly the right amount of tax will have been paid.

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Tornado
By Tornado
15th Jul 2021 15:26

'According to HMRC estimates, there are 4m businesses that pay income tax, but who are not VAT registered. Assuming they are not already keeping digital business records, all of these businesses or someone acting on their behalf will need to tool up before they enter the MTD ITSA regime in April 2023'

This is definitely in the realms of fantasy and even Harry Potter will not be able to make this happen.

Even John must have had a little sceptical smile when he wrote that!

It is inevitable that HMRC will have to soft pedal on this for a number of years, at least until they have sorted out the COVID grants fiasco (which will be many years), start answering letters and generally get the current tax system working properly again. (There is no doubt that it is in an appalling state at the moment).

For me, the TaxCalc MTD for ITSA bridging software will probably do the trick.

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Tornado
By Tornado
15th Jul 2021 16:13

'Talking to the people who have done it like Lucy Cohen and Rebecca Benneyworth, it provides an opportunity to whack in expenses capture and cloud bookkeeping linked to bank feeds, plug it into an MTD preparation and filing tool and work towards a "hands-off" automated process. There are several webinars that touch on this approach including this one'

* whack in expenses capture
* cloud bookkeeping linked to bank feeds
* plug it into an MTD preparation and filing tool
* work towards a "hands-off" automated process

Inspiring words indeed.

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Replying to Tornado:
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By johnjenkins
15th Jul 2021 16:30

mmmmmmm I can think of better things to whack, link, plug in and "hands-on" than an MTD preparation.

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Replying to Tornado:
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By GHarr497688
15th Jul 2021 19:51

rubbish

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By GHarr497688
15th Jul 2021 19:50

After my 42 years in Accountancy when computers were first introduced for Accounts , being proactive with computers , young in mind and body , thinking out of the box , being open minded to change, working with clients and revenue alike , talking to IT companies , dealing with old and young , educated and uneducated , nervous and confident and generally going through a life of trauma my calculation is : HMRC boffins add IT guru add lack of accountancy knowledge add lack IT knowledge with a pinch of unchecked systems and a large amount of quality staff leaving the profession and HMRC = unpaid tax and rubbish accounts leading to DISASTER ! Wait and see and remember when all limited companies had to have an audit which was scrapped overnight.

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By GHarr497688
15th Jul 2021 19:56

.

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By Roger Masters
15th Jul 2021 20:44

Quite simple. Now 72 and 53 years accounting and tax experience. Spent the last week telling my clients I am retiring. Good luck everyone! You will all need it! Disaster is looming!

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By johnjenkins
16th Jul 2021 08:38

Now 72 with 56 years accounting and tax experience and so looking forward to the impending disaster. Luck won't come into it. HMRC will look to us to get them out of the smelly stuff. That is when we take over and common sense and flexibility will replace compliance and rigidity. Stick around you will be needed.

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By Geoff56
16th Jul 2021 09:18

As a mere stripling of 64 years, with 47 in the profession, my desire to retire grows stronger by the month. I think you may be right John, but how much stress and trauma will we and our clients have to go through, before someone sees sense; even if there's an eleventh hour decision to postpone.

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By thomas34
16th Jul 2021 11:24

Just pipped you John with 57 years. Decided yesterday to cease trading on 31.3.22. Can't be bothered with any more of this crap. No more software fees, MLR fees. I feel lucky that I've only ever been out of work for one day in that time and been blessed with good health. I'll let others deal with the car crash that MTD will become.

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By johnjenkins
16th Jul 2021 12:30

I fully understand why Accountants of a certain age want to get out. I've even thought about it myself. However the urge to deal with the inevitable car crash and put HMRC back on track, together with the future change to our tax system is something not to be missed.

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By tedbuck
16th Jul 2021 13:07

Just might be an idea to push this string to Jim Harra who is, I believe, something to do with HMRC. I am sure that as head of such a streamlined efficient organisation providing an excellent service (or so the HMRC complaints department tells me) he will be devastated to hear that not everyone feels the same way about it.
But wait a minute, the average response time from HMRC these days seems to be about 6 months, so probably the heads will remain in the clouds.
The one thing they haven't thought through is how to educate Joe Public to understand how to submit stuff in an intelligible manner to HMRC even if they could understand their website which I doubt. So I anticipate that HMRC and Jim Harra in particular will be standing resplendent with their faces covered in plentiful egg.
Like many other of your correspondents I shall be watching from the sidelines so who is going to pick up HMRC's pieces for them?
Well they wanted accountants out of the way so maybe they will have their wish and, just possibly, live to rue the day.
I have been in this job for over 50 years and the Inland Revenue as it was years ago was more efficient, more helpful to accountants and taxpayers and considerably more prompt at dealing with questions and problems than the HMRC are today. Could be that all the good people have left to work for accountants.

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Tornado
By Tornado
16th Jul 2021 13:14

As one of those who have dealt with the introduction of VAT, Self-Assessment, Independent Taxation for Wives, joining the Common Market, computerised book-keeping & Accounts production (as far back as 1981) and numerous other revolutions, some of which did not and never would work properly, I can say that I simply do not believe the hype from HMRC about their MTD plans and their belief in what is going to happen. The COVID Grants fiasco is a classic example of plans gone wrong.

Whilst those that try to convince us that MTD will happen and we will need to spend loads on suitable software (and those that promote the project probably have a vested interest in this), my experience in advising hundreds (perhaps thousands) of businesses over the years is that if something looks unfeasible, then it probably is.

I think the MTD proposals are clearly unfeasible, and I also think many experienced Accountants would say the same. HMRC are just kidding themselves about what they can do. Whilst MTD in itself is not bad idea, forcing millions of people to do something that they cannot do and/or cannot afford is unacceptable. If HMRC came up practical and more realistic plans for MTD then I think more Accountants and people in business would be willing to go along, but we should be looking at a ten year transition period at least to make this project successful.

I imagine that HMRC have inspirational staff seminars where everyone get up and shouts 'WE CAN DO THIS' but the fact is that just convincing yourself that something can happen will not make it happen, such as those people who jump out of windows convinced that they can fly. What is really required is a proper plan from HMRC that is practical and has a real purpose.

In the meantime I think it is inevitable that MTD for ITSA will be postponed indefinitely or become voluntary because it simply will not work in its present format.

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Replying to Tornado:
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By GHarr497688
16th Jul 2021 13:31

You are 100% correct. I am not chancing it though. I will retire at 5th April 2022 and let these idiots at HMRC get on with their daft plan.

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By Mr J Andrews
19th Jul 2021 15:45

Free software by becoming a NatWest customer - and obviously train up to use it ?
Many of my clients are elderly and clueless when it comes to computers . But surprisingly many are becoming deeply religious as the MTD fiasco rumbles on. Specifically and coincidentally , they have opted for the Plymouth Bretheren .
So I guess I'll have to carry on with annual filing regardless ?

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Replying to Mr J Andrews:
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By johnjenkins
20th Jul 2021 14:45

Hoe Hoe Hoe.

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boxfile
By spilly
20th Jul 2021 07:40

It would be far better if only new entrants had to sign up for MTD ITSA. Then they know the situation right from the start.
Yes, that means it will take yonks for the ‘old scheme’ to tail off, but it also means that HMRC will have time to sort out the inevitable problems whilst having fewer ‘customers’ actively to using it. And saves us from trying to explain to current clients why their fees will increase, even though their tax situation remains the same.

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By bluebaron
20th Jul 2021 17:26

Sorry, my reply got posted twice!

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By bluebaron
20th Jul 2021 17:25

I won't be getting involved in MTD for Income Tax, and the nightmare of at least 5 submissions a year for each sole trade client, it's just not worth the stress and hassle. I'm hoping it might be delayed a bit longer, or there's a reasonable soft landing period, but knowing HMRC they will just plough on regardless in the teeth of all opposition.

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