Making Tax Digital, MTD
As we prepare for a Digital future we would like to keep you all up to date on the timescale set by HMRC for digital record keeping and the mandation of quarterly reporting. VAT registered clients will see these changes from April 2019. We are currently working with our VAT registered clients to prepare them for this which largely involves using cloud accounting software.
Non VAT registered businesses may see these changes as early as April 2020 however there is some uncertainty regarding this.
In a nutshell each business is going to have to record each transaction digitally and submit this information to HMRC every quarter totalling 4 submissions during the year. There will then be a fifth submission which will include adjustments for Capital Allowances, Stock Valuation, Debtors and Creditors. A sixth submission will then be sent which will include any other taxable income.
A more detailed letter has been sent to our clients, all we ask of them is to respond to our requests promptly and help us to help them to make the changes happen as smoothly as possible.
MTD Are accountants taking it seriously enough? Our response...
4th October 2018
All our clients who will fall in to MTD in April are either ready or well prepared and will be ready in the next few months, we have wrote to them all on numerous occasions, we update the website regularly regarding MTD and we tweet often.
The only thing stopping us being MTD compliant is HMRC themselves, it took me 42 days to connect my current log in to HMRC services to the new agent services account, in the end we believe it was due to regular tweeting and a letter in The Daily Telegraph that finally encouraged someone from HMRC to ring me back and sort out the problem (which was at their end not mine!).
We then opted for our own practice to join the MTD pilot and a client who has been ready for MTD since April 2018, our practice couldn’t and still can’t (yes with just 128 working days to go) because we are on the flat rate scheme, and our client has still not being invited to join even though I would regard their business as an ideal straightforward candidate for the MTD pilot, so what I would like to know is exactly what business’s are in the pilot if my client STILL doesn’t fit the criteria to be invited to join.
Consequently my practice and my clients are as ready as they can be yet we still feel very much in the dark.
We use Quickbooks for our clients who are going to be MTD compliant, thankful to them I feel confident going forward however Quickbooks is not free, even if it is just to use their bridging software, MTD is an extra cost to small businesses. Where is HMRC’s free bridging software ? Would I feel confident using it if there was such a thing …. No ! Our clients who are going to use bridging software are the ones who do not fall in to HMRC’s ideal category of a ‘small business’ they are the ones who use a margin scheme, have hundreds of hand written invoices a month which are completed on the job where there is no broadband or signal to produce them on an app, where online banking is a scary big step in itself, and yes maybe they should become more up to date with technology but have you ever tried telling this to a 60 year old farmer who lives 20 miles from the nearest shop but his business has ran successfully over decades through generations with no technology what so ever….
I do not know where the 40% of the accountancy profession have been hiding who have not heard from MTD, I agree there is no excuse for any accountancy profession to have not heard but will they have heard it from HMRC themselves… no ! They will have heard from software providers, or accounting web or twitter and social media etc
We have prepared our clients, not because we believe in MTD but because we beleive HMRC will go their own sweet way and leave it to accountants and software providers to sort out their mess, but we have gone as far as we can go and now we just have to sit back and wait for HMRC, we are not hopeful for a helping hand from them any time soon, we suspect they will blame everyone else for not being ready to buy some time for themselves to be ready …………
12th January 2018
HMRC propose that the digital records to be kept need not be on just one piece of software provided that there is a digital link between the different programmes.
Neither will HMRC insist that records must be updated in real time. Somewhere over Christmas they must have poked their heads into the real world.
For further details and to respond direct to HMRC go to firstname.lastname@example.org
Closing date 9 February.
MTD Consultations ; What do you think ?
5th October 2017
We urge all of you to read through the MTD consultation and respond by emailing email@example.com by 10th November 2017.
Here is a link to the consultations; https://www.gov.uk/government/consultations/making-tax-digital-reforms-affecting-businesses
This is very likely the very last chance to have any say at all on this subject. You have a voice, use it !!