So we don't know much more than we did already. A couple of surprising things for me are 3 line accounts are acceptable still. Er, exactly what new info will that give HMRC? Spreadsheets are still ok, that's a good thing, although I have to admit that, other than when I first started and used a specialised taxi spreadsheet, I've never used them. VT does what I need to do. Spreadsheet must be linked to an app that can extract the info (piece of p if all that is needed is Sales - Expenses = Profit.
At the moment they are still saying 10k threshold, although its subject to more detailed consultation in the spring, and they are still looking at a 2018 start time. Now heres a question. All my sole trader clients have a 31st March or 5th April accounts finish. Do I need to start submitting electronic data for quarter ending June 2018 or 2019, I'm a bit confused on that point.
The VAT return will vanish and be replaced by the digital submission. Does that mean HMRC will be expecting the digital submissions to be done within a month and 7 days? Also will they shift the stupid 5th April finish to 31st March so it matches up better with the VAT reporting?
Companies I was a little bit confused on, as they get an extra month to supply accounts, but I also read 10 months or 31st January, whichever is sooner. Does that mean a company that has a 31st December filing date have to get their accounts in by 31st January?
A caveat is that all this was a quick skim read after I finished the tax returns yesterday, so I may have got some things wrong there. I'm happy to be corrected if i am.
Right I'm off until Friday now, taking a trip down sunny Watford to see the inlaws. The good news on that score is that the wife is stopping down there for 3 weeks, FREEDOM (for a little while at least )
-- Edited by Leger on Wednesday 1st of February 2017 11:05:37 AM
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
The main thing I took from the link that Johnny posted is that it reaffirms what I and others have been saying all along about the bullshit FUD that cloud companies and fans have been saying - that it is indeed bullshit FUD.
(FUD, for those who aren't familiar with the term, stands for 'Fear, Uncertainty, Doubt' - and IMO cloud companies have, in effect, been using FUD as a marketing tactic when they claim MTD means accounts need to be kept in the cloud.)
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
What about those who work full-time, receive dividends and savings income? Are these to report quarterly too?
A few interesting points, I thought:
Businesses will be able to continue to use spreadsheets -
I concur with Vince, the Cloud Cartel have seemingly come unstuck here, great news for VT and Sage.
HMRC will provide software -
Will this be akin to HMRC's current, simple PAYE software, and anything 'tricky' needing 3rd party?
Businesses who cannot, will not be required to submit quarterly -
With cannot being a world away from will not what circumstances will pass this test? Living in a cave?
<=10,000 will not need to submit quarterly -
Would the VAT threshold not be a better level to set? I think / hope that will change. Or is it the case whereby HMRC 'could' believe that it is those who have negligible amounts to pay, fall mainly into the £8 Billion due? Through maybe not seeing the need, or going through the motions of reporting mediocre amounts. (Pure opinion, I'm not saying they don't I'm just trying to understand why it is so low)
I can not see how reporting quarterly, as an oppose to reporting annually, reduces errors, as is their reasoning - as per the link.
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
What about those who work full-time, receive dividends and savings income? Are these to report quarterly too?
That's where your 10k level kicks in. If divi's, property income or savings interest (or a combination) come to over 10k, then it needs to be reported quarterly.
A few interesting points, I thought:
Businesses will be able to continue to use spreadsheets -
I concur with Vince, the Cloud Cartel have seemingly come unstuck here, great news for VT and Sage.
I was under the impression that it was HMRC who originally said spreadsheets wouldn't be allowed, and software used would need to be able to communicate with HMRC's API. However they did not say that any program used would have to be in the cloud, so I'm with you and Vince on that score.
HMRC will provide software -
Will this be akin to HMRC's current, simple PAYE software, and anything 'tricky' needing 3rd party?
Businesses who cannot, will not be required to submit quarterly -
With cannot being a world away from will not what circumstances will pass this test? Living in a cave?
Haha, probably. There is a religious organisation that doesn't believe in using computers, and certainly not the internet. I would imagine they would be exempt unless that situation's changed. I would also imagine that some rural businesses would also be exempt.
<=10,000 will not need to submit quarterly -
Would the VAT threshold not be a better level to set? I think / hope that will change. Or is it the case whereby HMRC 'could' believe that it is those who have negligible amounts to pay, fall mainly into the £8 Billion due? Through maybe not seeing the need, or going through the motions of reporting mediocre amounts. (Pure opinion, I'm not saying they don't I'm just trying to understand why it is so low)
If they set it at the VAT level then all they need to do is add another box to the VAT return for profit or loss. I'm guessing this will be raised to around 25k
I can not see how reporting quarterly, as an oppose to reporting annually, reduces errors, as is their reasoning - as per the link.
I agree. GIGO and that applies whether it's quarterly or annually.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hi John, I suppose one way to look at is that folk have always had the option to fill in their books, either with pen, or keyboard, the same setup with the tax return - some do and others pay a bookkeeper or accountant. Guess there are pros and cons to MTD in equal measure.
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
I would like to know how this will shorten the tax gap -
With the cloud the client is effectively taking responsibility for their bookkeeping, ultimately they do now, but at least the invoices are checked by someone who is, or should be, totally impartial to the client and his affairs.
With the cloud being as popular as it is, how many items are going through the books which shouldn't?
Expense Vs Drawings....
That is tax lost already. Then there is the VAT -
I do hope, and I'm sure folk do have, strong letters of engagement setting out who is responsible for what parts of the chain.
On the positive side - it allows for more clients, it allows you to use others areas of our accountancy studies, such like the management and costing side - maybe offering opinions and ideas to help their businesses grow.
There is still opportunities there I believe.
We shall see, I'm just trying to remain positive to it all....
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
I would like to know how this will shorten the tax gap -
With the cloud the client is effectively taking responsibility for their bookkeeping, ultimately they do now, but at least the invoices are checked by someone who is, or should be, totally impartial to the client and his affairs.
With the cloud being as popular as it is, how many items are going through the books which shouldn't?
I totally agree, and conversely, how many items not claimed that could be. HMRC, through penalties, will jump down hard on people that mess up, and the cynic in me suggests it is a means of increasing revenue. It is unfair to push this burden to the tax payer, the majority of whom aren't out to diddle the tax man.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Interesting, so my sole trader client who has a YE of 31/8 will have to have his 'tax return/final submission' done by 30 Jun - but he also has a rental property which we do in tax years, so will they run on different dates or will that then have to swap to also end on 31 Aug, or if everything is quarterly is that all irrelevant really. Hmm.
Still getting my head round how some of it is going to work in practical terms with people (probably especially trades people) who have been doing this stuff once a year forever and I just can't see being very enthusiastic! However in terms of me personally not having the 31 Jan rush that we have now I think the whole thing is a marvelous idea - as long as the majority don't want to do their own submissions then we can totally smooth out our workflow over the year.
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Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
"the cynic in me suggests it is a means of increasing revenue"
The cynic in me has believed similar from the outset - except I've been thinking cashflow rather than revenue.
I don't think the link above mentions it (and can't be bothered to check now) but in some of the MTD stuff that's been published, there was mention of "being able" to pay tax sooner, suggesting it as a benefit to those paying because it will help them manage their cashflow, not have the burden of a large tax bill, etc.
Said cynic read that as improving the cashflow within the tax system - and therefore the government coffers - because Newton's third law of cashflow states that anything paid sooner is also received sooner by the other party. There's also potentially a larger short term bonus boost (a bubble, if you will) because the current system means a lot of tax is effectively paid quite late in terms of when it relates to.
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
Strictly speaking, that's not actual news on MTD, it reads to me as an opinion piece based on comments from someone at Xero - and therefore reflective of their point of view.
Note in particular, under "Free software" the article says software providers have voiced their concerns about being able to provide free software under MTD, but then goes on to cite just that one source - Xero1.
Consider the nature of that source: Cloud software. Software that is running on their servers (or server space they rent from bigger cloud providers), which is therefore an ongoing cost to them. Although people do provide free services online, something like this would need a lot more administrative work (consider what people would be putting through it) and so on. Xero have (or are paying for) the infrastructure - but a free service like that would come with quite a cost to them. (But if they DID offer a free service, on the other hand, it would count for a lot with cynical buggers like me.)
That is not a problem faced by software running on users' own computers.
Where it says that vigorous testing of any software is necessary - especially in this field; that's correct. (Not that it's stopped buggy software being released before now) But that's given as a reason for an opinion: That there will be no free software. While it might turn out to be true that there will be no free software, the logic they're applying to get to that opinion/conclusion is terribly, terribly wrong. If it weren't, there would be no free software in this or any other field.
In fact... *sniff, sniff* yeah, thought so. I smell FUD.
Despite my fears (see other thread), I do still hold out some hope that someone will investigate providing a separate piece of software that talks to HMRC via the necessary APIs and which will therefore allow us to use decent software without being forced to choose between a reduced number of possibilities, some expensive. I wouldn't expect that to be free, but as long as it's sensibly priced... great!
So, superstitious people should avoid walking under their crossed fingers while touching wooden black cats, or something, and maybe we'll end up with some decent options.
1. Sorry, two sources - as well as Xero, AutoEntry is quoted. An "add on partner of Xero".
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
)
