Making Tax Digital

[Eric Mc]

clockworks said:

When (if) this comes into effect for low-turnover sole traders, I wonder how many will just become "cash in hand" operations, and pay no tax at all?

Indeed.

[Eric Mc]

Ultimately HMRC thinks it will get more accurate financial information - especially from small businesses.

I seriously think they do not understand the type of people who run small businesses.

[Eric Mc]

It's not so much the politicians as the civil servants. Many of them are excellent, thoughtful and do great work - but an awful lot of them are bureaucrats and who love creating more and more bureaucracy.

[Eric Mc]

So said:

Eric Mc said:

It's not so much the politicians as the civil servants. Many of them are excellent, thoughtful and do great work - but an awful lot of them are bureaucrats and who love creating more and more bureaucracy.

If you take MTD however, that's not something that a lowly bureaucrat has been able to instigate on his own.

Nothing to do with "lowly bureaucrats".

There are plenty of high powered bureaucrats (often referred to as the Whitehall Mandarins) who have wanted these "mega data" system for ages. All they needed was complicity between a pliable and unprincipled politician (i.e. George Osborne) and an enthusiastic commercial software sector.

[Eric Mc]

ninja-lewis said:

Kashflow is owned by IRIS who are on the list.

Various software providers are also developing free tools for tax agents to provide to their clients which will interface with the agent's practice software. The agent can then extract the records, submit the VAT return and prepare th statutory accounts - .e.g. Clear Books Micro. https://clearbooksmicro.co.uk/

The key word is "developing". What is compatible right now?

There are only 8 months to go.

Is HMRC ready?

[Eric Mc]

Is that why the former boss of Sage was on the HMRC consultative committee?

[Eric Mc]

And how is it going?

[Eric Mc]

bga said:

There is a significant lead time required to ensure that policy can be met by the software community tasked to make it happen. Do you not think it would be remiss for the community not to be represented?

As much as the software industry is responding, the broader drive for change (in software) has been the accountancy profession.

In a congested and often considered commodity market (which I believe is not the case) practices are looking to upsell work and want the tools to support this. MTD is being seen as one way for practices to get more involved in customer's businesses and generate more fees.

I frankly don't think they will be able to cope.

[Eric Mc]

Yes - you need additional software over and above what you use already - if you actually already use Excel.

There are quite a few small business that don't use any software at all. This will soon be illegal - even if their records are perfectly adequate for the businesses they run.

[Eric Mc]

That's what people do already.

What is the point of making a small business pay for something that offers not one iota of an advantage to their business over what they currently do?

And does not provide HMRC with anything better than what they already get - except the ability to levy additional fines.

HMRC has already acknowledged that all this upheaval will not provide them with additional information.

[Eric Mc]

jammy-git said:

Also, why the feck is this in NP&E?!

Because it was quite big news when it was announced in its original form. The version we have now is substantially watered down on what was originally proposed. The original proposal affected at least 10 million tax payers - most who were not involved in any sort of business activity.

It was so big I didn't want it lost in the "Business" or "Finance" forums as it covered much more than that.

[Eric Mc]

HMRC have stated clearly they will not accept any data off Excel - unless it is passed through some conversion software first.
Don't expect any movement on this.

[Eric Mc]

When the system begins to operate on 1 April 2019, it will not accept data directly from Excel (or any other spreadsheet style software). It will have to go through a "translation" process tyo make it acceptable at HMRC's end.

That is the way HMRC has explained it.

Initially, they did not want records to be maintained on spreadsheets at all - and they may very well implement this restriction eventually. It's what they really want.

[Eric Mc]

It's a separate matter so shouldn't really be discussed on this specific thread. Having said that, the abolition of the seemingly innocuous Class 2 NI Contribution is proving immensely difficult and has already been postponed twice.

[Eric Mc]

jammy-git said:

plasticpig said:

This is hardly a surprise as the API is not been released for general use and is still in the beta testing stage. From a software development perspective reading the contents of 10 cells from an Excel sheet (9 Vat boxes + VAT Number) and using the MTDVat API to send the information to HMRC is a trivial exercise.

Exactly this. I think what Eric has been told is that it is not/won't be possible to upload an Excel spreadsheet as your submission. However I can't see why HMRC would not accept an Excel VBA macro reading the contents of certain cells on a spreadsheet and then being posted via their API using that VBA macro.

Tell that to your average small shopkeeper and see what reaction you get.

[Eric Mc]

jammy-git said:

I wasn't suggesting that the average shopkeeper try and write an API integration in a VBA macro. Hence why I asked whether anyone would be interested. As PP says, it's not a difficult thing to create for someone who knows VBA.

That's the problem. It's making a fairly straightforward process complicated for those who know nothing (and don't particulary want to learn) about IT issues.

They are trying to turn small businesses that are tough enough just to keep going without these additional burdens and costs.

[Eric Mc]

markcoznottz said:

Eric Mc said:

Dromedary66 said:

Would be nice if HMRC released a software package like their Basic PAYE tools but for VAT.

But that would cost the Exchequer. The whole point of MTD is NOT to spend government money.

Stop wasting money on st then. HS2, foreign aid, modern art for hospitals etc etc.

And I forgot to add - to provide work for software companies (and maybe ministers and high ranking civil servants to worm their way onto boards of directors of those companies when they eventually leave government employment).

[Eric Mc]

plasticpig said:

jammy-git said:

Exactly this. I think what Eric has been told is that it is not/won't be possible to upload an Excel spreadsheet as your submission. However I can't see why HMRC would not accept an Excel VBA macro reading the contents of certain cells on a spreadsheet and then being posted via their API using that VBA macro.

I personally wouldn't do the whole lot in VBA. The API uses OAuth2 for authentication. That means either relying on the machine having IE 11 installed and using COM or using the Selenium VBA wrapper (might be other solutions as well but those are the two I am aware of).

Problem solved. Tell that to Mr Patel in the curry shop down the road.

[Eric Mc]

plasticpig said:

The last curry shop I ordered from had online ordering and sent text notifications when the food was dispatched with an estimated delivery time. Then another text when the driver was a couple a minutes away from arriving. I suspect their accounting system does not consist of a Simplex accounts book.

You might be surprised at what types of records small businesses keep. I'm not. And I see hundreds.

[Eric Mc]

carl_w said:

markcoznottz said:

What about gig workers, part timers etc.

I'd love to be able to exceed the VAT registration threshold as a part-timer

Don't worry - it'll all be coming your way before too long.