Making tax digital
Discussion
MaxFromage said:
What a waste of time and effort. HMRC should concentrate on the areas they're currently getting wrong instead i.e. everything.
I have been on the digital VAT scheme since the start.We keep good records so it was no harder with the free software, than it was before it came in.
Eric Mc said:
<snip>
One other clarification is that the quarterly periods are fixed (originally they had said that businesses could elect to chose quarterly periods that suited their business - as we already do for VAT returns). The quarterly periods will be statutorily set at 5 July, 5 October, 5 January and 5 April. The taxpayer can ELECT to submit quarterly returns on the actual calendar month so that would mean 30 June, 30 September, 31 December and 31 March.
If you are already VAT registered and submitting quarterly VAT returns to different month ends, you can continue to use those VAT quarters although that would mean you have two sets of quarterly submissions to make which don't end in the same quarters. Have fun with that.
https://www.accountingweb.co.uk/tax/business-tax/m...
Thanks for the heads up on this - although watch the systems fall to their knees as everyone starts to access them at about the same time....!One other clarification is that the quarterly periods are fixed (originally they had said that businesses could elect to chose quarterly periods that suited their business - as we already do for VAT returns). The quarterly periods will be statutorily set at 5 July, 5 October, 5 January and 5 April. The taxpayer can ELECT to submit quarterly returns on the actual calendar month so that would mean 30 June, 30 September, 31 December and 31 March.
If you are already VAT registered and submitting quarterly VAT returns to different month ends, you can continue to use those VAT quarters although that would mean you have two sets of quarterly submissions to make which don't end in the same quarters. Have fun with that.
https://www.accountingweb.co.uk/tax/business-tax/m...
Anyone else been waiting to file a VAT return today will also have noticed HMRC VAT was down for maintenance most of the day..
..I promised myself I wouldn't leave it until the end of the month to finally get signed up for MTD returns - but thats exactly what happened.
I did have ANNA earmarked as the bridge software / portal I'd use... however it turned out their template formulas didnt work on the Mac I was using (in numbers, not excel). So instead I started looking at vatMTD which has an app for mac - its a bit shonky, but the template populated all okay.
Turns out, when HMRC came back online tonight I can still submit a return the old way with just adding the 9 box totals. So that was time wasted filling out vatMTD.
However its something I've got to get used to by the looks of things, it does say this will be the last time to submit returns 'the old way'.
I have a question about using these templates:
Previous, on my own spread sheet (taking my accountants advice years ago) - I'd just split my receipts in main categories of outgoings: petrol, maintenance, equipment, materials (about 15 - which covered all aspects). Total up all the petrol and input that figure.. and so on..
Now, on the new template for the bridge software, do HMRC want to see the date, company, product description.. for every single receipt? (obviously I'll be keeping the receipts as per usual) But that will takes hours.
For example there could be 30 petrol receipts from different garages, used in different vehicles - so petrol or diesel.
or can I just carry on splitting all outgoings in a category and grouping the cost ex VAT, VAT, and Total inc VAT.
'Inputs / sales' isn't such an issue as there are only a few per month - in comparison to 100+ receipts per month.
..I promised myself I wouldn't leave it until the end of the month to finally get signed up for MTD returns - but thats exactly what happened.
I did have ANNA earmarked as the bridge software / portal I'd use... however it turned out their template formulas didnt work on the Mac I was using (in numbers, not excel). So instead I started looking at vatMTD which has an app for mac - its a bit shonky, but the template populated all okay.
Turns out, when HMRC came back online tonight I can still submit a return the old way with just adding the 9 box totals. So that was time wasted filling out vatMTD.
However its something I've got to get used to by the looks of things, it does say this will be the last time to submit returns 'the old way'.
I have a question about using these templates:
Previous, on my own spread sheet (taking my accountants advice years ago) - I'd just split my receipts in main categories of outgoings: petrol, maintenance, equipment, materials (about 15 - which covered all aspects). Total up all the petrol and input that figure.. and so on..
Now, on the new template for the bridge software, do HMRC want to see the date, company, product description.. for every single receipt? (obviously I'll be keeping the receipts as per usual) But that will takes hours.
For example there could be 30 petrol receipts from different garages, used in different vehicles - so petrol or diesel.
or can I just carry on splitting all outgoings in a category and grouping the cost ex VAT, VAT, and Total inc VAT.
'Inputs / sales' isn't such an issue as there are only a few per month - in comparison to 100+ receipts per month.
for MTD - VAT
all HMRC get / see is the summary 9 boxes identical to the ones you used to enter online, but now submitted via software…
the software has to have a digital source (eg a spreadsheet), but that can have been completed manually, so the minimum you now need to do is:
- manually fill in 9 boxes on a spreadsheet
- use authorised software to read that and submit it to HMRC
v. previously
- fill in 9 boxes online
how it is any more accurate or secure I have no idea - it is a huge amount of bureaucracy for no extra outcome…
but no, HMRC has zero idea / knowledge on how you get to those 9 figures…
all HMRC get / see is the summary 9 boxes identical to the ones you used to enter online, but now submitted via software…
the software has to have a digital source (eg a spreadsheet), but that can have been completed manually, so the minimum you now need to do is:
- manually fill in 9 boxes on a spreadsheet
- use authorised software to read that and submit it to HMRC
v. previously
- fill in 9 boxes online
how it is any more accurate or secure I have no idea - it is a huge amount of bureaucracy for no extra outcome…
but no, HMRC has zero idea / knowledge on how you get to those 9 figures…
Eric Mc said:
HMRC learn privately nothing more under MTD compared to the previous system,
akirk said:
but no, HMRC has zero idea / knowledge on how you get to those 9 figures…
Thanks both - always appreciated.So this 'advancement' really is as nonsensical as it seems?
I just assumed the only justification was if each input that made up the box 7 figure in the linking spreadsheet was itemised to the 'enth degree (hence my concern about the huge amount of time that would take an individual trader). However this would only increase the risk for error when adding dates, locations, descriptions to each one. (obviously that isn't the case then)
Yes I have a accountant for Tax Returns - but I'm not paying someone to do VAT when it (was) so simple and quick + we've all got years worth of hard copies and spreadsheets to back these returns up in the first place.
Yes and no
For now it makes no difference, but it is starting to build the framework for more connected accounts and more frequent returns which we will start seeing with quarterly income tax reports very soon…
It is based on a fallacy that because the data is digital it will be accurate, missing the point that until costs / expenses / income / invoicing / etc is put into the machine it doesn’t exist, nor is it digital, so those who wish to mess around with HMRC will carry on doing so, all it will add is hassle for the honest ones and a belief in a level of accuracy which will never occur
For now it makes no difference, but it is starting to build the framework for more connected accounts and more frequent returns which we will start seeing with quarterly income tax reports very soon…
It is based on a fallacy that because the data is digital it will be accurate, missing the point that until costs / expenses / income / invoicing / etc is put into the machine it doesn’t exist, nor is it digital, so those who wish to mess around with HMRC will carry on doing so, all it will add is hassle for the honest ones and a belief in a level of accuracy which will never occur
HMRC wants more data...
From my accountancy publication:
In an unexpected power grab, HMRC is working on plans to access more information about individual taxpayers, particularly the self employed and employees, from working hours to job titles, to tackle tax evasion
The main focus will be on accessing more data about the self employed, partnerships and those earning dividends, as well as the number of hours worked by employees, their job titles and the locations of businesses.
This would inevitably raise administrative costs for businesses and individuals who have to comply with the rules, and there would be a penalty system for non-compliance.
The proposal is to add a compulsory field to real time information (RTI), the reporting mechanism for PAYE, requesting the occupation of each employee. This would have to be completed by employers, but it is hard to understand why the tax authority would need such information.
It also wants to know which office or business location the employee is based at, and says that this information would be useful to know in terms of where senior management and back office support is based, for example.
HMRC admits that collecting data on this would be challenging as not every employee is based at a single company site so even providing this data may not give HMRC the granular level of information it wants.
The demand for such detailed data would require a change in legislation to give HMRC far more powers.
It is clear from the consultation that HMRC does acknowledge that the data plans are far reaching. ‘HMRC carries out data protection impact assessments for new processing activities likely to have a higher risk to the rights and freedoms of individuals, particularly if there are proposals to change our statutory powers, and where new legal gateways are created to share personal data with other public sector bodies and tax jurisdictions,’ HMRC’s consultation stated.
One of the main thrusts of the data plan is to access more detailed information about the profile of the self employed and the type of business they are involved in, and HMRC justifies this by stating that support could have been more tailored to specific self employed sectors when providing covid-19 support during the pandemic.
One of the options is to require the self employed to provide a description of their business type when they complete their annual self assessment tax return.
It is considering using standard industrial classification (SIC) codes which are already required by Companies House, but this information is not shared with HMRC.
In the consultation HMRC stated: ‘It would also increase HMRC’s ability to target compliance interventions at higher risk sectors. This would help the vast majority of businesses who try to get their tax right, by nudging those who are accidentally non-compliant and helping to avoid unnecessary investigations.
‘Finally, it would provide an evidence base to support future sector-specific policy interventions, both in HMRC and across government, for example economic support in relation to a future crisis.’
Businesses are required to tell HMRC the ‘nature of business’ when they register. However, because businesses only have to register once, HMRC said it ‘does not have a lever to effectively ensure that this is updated. Furthermore, because HMRC use free text, it is difficult to analyse the data or combine it consistently with other datasets, so it is not easily comparable with SIC codes for example’.
HMRC said: ‘The changes in this document will potentially affect all self-employed taxpayers, all employers, employees about whom additional data may be stored and shared, as well as tax agents and tax or payroll software providers for these groups.
‘Better data about the whole customer population can help us target operational activity more effectively – for example compliance and debt collection activity.’
There is also hints that the level of data HMRC wants to collect would be really extensive, with details about employees from the type of job they perform to the hours worked.
HMRC claimed that ‘collecting occupation data alongside tax records would support the government in delivering the skills needed by employers, the economy and society’.
Better location data would help HMRC and the Treasury to design tax policy in a way that supports levelling up and enable greater policy flexibility, the consultation stated.
HMRC seems to be indicating that the data would be available to employers in some format although it is not clear how this data would be shared. The consultation stated: ‘Improved occupation data can also help businesses and employers. It would help employers understand more about what skills and training they need employees to have. It could also help businesses with investment decisions, by using information on which areas of the country have concentrations of people with particular skills and experience they are looking for.’
Finally, it is also looking at expanding the amount of information it collects about dividend payments and proposes changing the reporting requirements for owner managed businesses.
‘To avoid confusion and to achieve consistency for our customers and between our own internal datasets, we are therefore proposing to build on the existing definition of a close company, in three ways,’ HMRC said.
First, the company director and close company fields that already exist on the SA102 form would be made mandatory.
Second, a new mandatory field would be added to the SA102 form that would ask for the value of dividends received from the close company of which the individual is a director.
Finally, there would be a further new mandatory field on SA102 asking for the percentage shareholding in the company.
Subject to the response to this consultation, the government plans to legislate for any changes in Finance Bill 2023/24 at the earliest.
The consultation closes for comment on 12 October 2022
Open consultation here:
https://www.gov.uk/government/consultations/improv...
From my accountancy publication:
In an unexpected power grab, HMRC is working on plans to access more information about individual taxpayers, particularly the self employed and employees, from working hours to job titles, to tackle tax evasion
The main focus will be on accessing more data about the self employed, partnerships and those earning dividends, as well as the number of hours worked by employees, their job titles and the locations of businesses.
This would inevitably raise administrative costs for businesses and individuals who have to comply with the rules, and there would be a penalty system for non-compliance.
The proposal is to add a compulsory field to real time information (RTI), the reporting mechanism for PAYE, requesting the occupation of each employee. This would have to be completed by employers, but it is hard to understand why the tax authority would need such information.
It also wants to know which office or business location the employee is based at, and says that this information would be useful to know in terms of where senior management and back office support is based, for example.
HMRC admits that collecting data on this would be challenging as not every employee is based at a single company site so even providing this data may not give HMRC the granular level of information it wants.
The demand for such detailed data would require a change in legislation to give HMRC far more powers.
It is clear from the consultation that HMRC does acknowledge that the data plans are far reaching. ‘HMRC carries out data protection impact assessments for new processing activities likely to have a higher risk to the rights and freedoms of individuals, particularly if there are proposals to change our statutory powers, and where new legal gateways are created to share personal data with other public sector bodies and tax jurisdictions,’ HMRC’s consultation stated.
One of the main thrusts of the data plan is to access more detailed information about the profile of the self employed and the type of business they are involved in, and HMRC justifies this by stating that support could have been more tailored to specific self employed sectors when providing covid-19 support during the pandemic.
One of the options is to require the self employed to provide a description of their business type when they complete their annual self assessment tax return.
It is considering using standard industrial classification (SIC) codes which are already required by Companies House, but this information is not shared with HMRC.
In the consultation HMRC stated: ‘It would also increase HMRC’s ability to target compliance interventions at higher risk sectors. This would help the vast majority of businesses who try to get their tax right, by nudging those who are accidentally non-compliant and helping to avoid unnecessary investigations.
‘Finally, it would provide an evidence base to support future sector-specific policy interventions, both in HMRC and across government, for example economic support in relation to a future crisis.’
Businesses are required to tell HMRC the ‘nature of business’ when they register. However, because businesses only have to register once, HMRC said it ‘does not have a lever to effectively ensure that this is updated. Furthermore, because HMRC use free text, it is difficult to analyse the data or combine it consistently with other datasets, so it is not easily comparable with SIC codes for example’.
HMRC said: ‘The changes in this document will potentially affect all self-employed taxpayers, all employers, employees about whom additional data may be stored and shared, as well as tax agents and tax or payroll software providers for these groups.
‘Better data about the whole customer population can help us target operational activity more effectively – for example compliance and debt collection activity.’
There is also hints that the level of data HMRC wants to collect would be really extensive, with details about employees from the type of job they perform to the hours worked.
HMRC claimed that ‘collecting occupation data alongside tax records would support the government in delivering the skills needed by employers, the economy and society’.
Better location data would help HMRC and the Treasury to design tax policy in a way that supports levelling up and enable greater policy flexibility, the consultation stated.
HMRC seems to be indicating that the data would be available to employers in some format although it is not clear how this data would be shared. The consultation stated: ‘Improved occupation data can also help businesses and employers. It would help employers understand more about what skills and training they need employees to have. It could also help businesses with investment decisions, by using information on which areas of the country have concentrations of people with particular skills and experience they are looking for.’
Finally, it is also looking at expanding the amount of information it collects about dividend payments and proposes changing the reporting requirements for owner managed businesses.
‘To avoid confusion and to achieve consistency for our customers and between our own internal datasets, we are therefore proposing to build on the existing definition of a close company, in three ways,’ HMRC said.
First, the company director and close company fields that already exist on the SA102 form would be made mandatory.
Second, a new mandatory field would be added to the SA102 form that would ask for the value of dividends received from the close company of which the individual is a director.
Finally, there would be a further new mandatory field on SA102 asking for the percentage shareholding in the company.
Subject to the response to this consultation, the government plans to legislate for any changes in Finance Bill 2023/24 at the earliest.
The consultation closes for comment on 12 October 2022
Open consultation here:
https://www.gov.uk/government/consultations/improv...
ooh fun, I am sure that job titles could change every month, January, all Jedi Knights / February - village fool or jester / March - call everyone a consultant (eg Stationery Supplies Consultant) / April… etc
as there is zero legislation regarding job titles, there is zero method of enforcing or faining any sense of reliability…
someone at HMRC needs to wobble their head
as there is zero legislation regarding job titles, there is zero method of enforcing or faining any sense of reliability…
someone at HMRC needs to wobble their head
In my view, the government is falling down on the job in failing to control the ambitions of the Treasury. We've had ineffective actual government for decades now. They are good at sound bites but useless at genuine action and control.
The ambitions of government departments need reining in.
The ambitions of government departments need reining in.
Anyone care to share positive experiences of decent FREE software that comply with this waste of time implemented by HMRC?
Picked what turned out to be totally confusing software (to me) by a company based in America. Not sure if I can say the firm's name, but Z*ho B*oks might be near enough? Z*ho B*llocks more like.
My VAT return has been submitted, apparently, but I have zero faith it is correct.
Couldn't fill various boxes in, so made sure I saved notes to go with it. Time will tell.
Any recommendations welcome.
Picked what turned out to be totally confusing software (to me) by a company based in America. Not sure if I can say the firm's name, but Z*ho B*oks might be near enough? Z*ho B*llocks more like.
My VAT return has been submitted, apparently, but I have zero faith it is correct.
Couldn't fill various boxes in, so made sure I saved notes to go with it. Time will tell.
Any recommendations welcome.
BlimeyCharlie said:
Anyone care to share positive experiences of decent FREE software that comply with this waste of time implemented by HMRC?
Picked what turned out to be totally confusing software (to me) by a company based in America. Not sure if I can say the firm's name, but Z*ho B*oks might be near enough? Z*ho B*llocks more like.
My VAT return has been submitted, apparently, but I have zero faith it is correct.
Couldn't fill various boxes in, so made sure I saved notes to go with it. Time will tell.
Any recommendations welcome.
I posted the above as a new topic today which was locked as this thread exists already - apologies.Picked what turned out to be totally confusing software (to me) by a company based in America. Not sure if I can say the firm's name, but Z*ho B*oks might be near enough? Z*ho B*llocks more like.
My VAT return has been submitted, apparently, but I have zero faith it is correct.
Couldn't fill various boxes in, so made sure I saved notes to go with it. Time will tell.
Any recommendations welcome.
Reading through the recent replies I don't think Zoho Books is compatible with Mac. Possibly.
I couldn't enter boxes 6 or 7 for example, but the whole thing was massively chaotic. Maybe it is like that anyway.
So I'll attempt to do this the old way, just to be safe, but if anyone has any recommendations for a Mac user then please say. I hadn't thought to check Mac compatibility, which given we are in 2022 seems a bit weird.
Thanks!
Just had the idea to log into HMRC and found my return has been submitted, which is great.
Some info is missing, as per software submission, but reads correct with regard to money owed/owing.
However, the difference between boxes 3 and 4 makes sense as one is a minus figure, so all info is actually correct...
I couldn't do it the 'old' way as I guess it has already been submitted.
So my advice if in doubt via MTD software is to manually log-in to HMRC and check 'past returns' to make sure it is there.
Time will tell if I hear anything, or fine etc, and I will update here.
Some info is missing, as per software submission, but reads correct with regard to money owed/owing.
However, the difference between boxes 3 and 4 makes sense as one is a minus figure, so all info is actually correct...
I couldn't do it the 'old' way as I guess it has already been submitted.
So my advice if in doubt via MTD software is to manually log-in to HMRC and check 'past returns' to make sure it is there.
Time will tell if I hear anything, or fine etc, and I will update here.
BlimeyCharlie said:
Reading through the recent replies I don't think Zoho Books is compatible with Mac. Possibly.
I couldn't enter boxes 6 or 7 for example, but the whole thing was massively chaotic. Maybe it is like that anyway.
So I'll attempt to do this the old way, just to be safe, but if anyone has any recommendations for a Mac user then please say. I hadn't thought to check Mac compatibility, which given we are in 2022 seems a bit weird.
Thanks!
Have a look at VitalTax as it's recommended quite often:I couldn't enter boxes 6 or 7 for example, but the whole thing was massively chaotic. Maybe it is like that anyway.
So I'll attempt to do this the old way, just to be safe, but if anyone has any recommendations for a Mac user then please say. I hadn't thought to check Mac compatibility, which given we are in 2022 seems a bit weird.
Thanks!
https://vitaltax.uk/#landing
It claims to work with Excel for Mac:
"VitalTax supports Microsoft Excel 2013 and later versions for Windows, Excel 2016 and later versions for Mac, Office 365, Office Online and Excel for the iPad. So whatever platform your business uses, VitalTax is here to help"
BlimeyCharlie said:
Anyone care to share positive experiences of decent FREE software that comply with this waste of time implemented by HMRC?
Picked what turned out to be totally confusing software (to me) by a company based in America. Not sure if I can say the firm's name, but Z*ho B*oks might be near enough? Z*ho B*llocks more like.
My VAT return has been submitted, apparently, but I have zero faith it is correct.
Couldn't fill various boxes in, so made sure I saved notes to go with it. Time will tell.
Any recommendations welcome.
I feel your pain..Picked what turned out to be totally confusing software (to me) by a company based in America. Not sure if I can say the firm's name, but Z*ho B*oks might be near enough? Z*ho B*llocks more like.
My VAT return has been submitted, apparently, but I have zero faith it is correct.
Couldn't fill various boxes in, so made sure I saved notes to go with it. Time will tell.
Any recommendations welcome.
..My post a few days ago, same issue.
I found vatMTD.com
Its app based for mac - works with 'numbers' - I put the app on my old ipad and it worked fine. Their template spreadsheet also worked fine when I opened it up in 'Numbers'
...then I found out the HMRC servers were down and i couldn'nt sign up for Making tax digital - but low & behold I could still submit my return the old way.
ETA: so I didn'nt actually need vatMTD to do the submission / bridge.. but it looked way better and didn't have the issues of ANNA (the one I had perviously planned to use)
If you try it - please report back next time
Edited by Steamer on Wednesday 3rd August 18:46
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