Making Tax Digital
Discussion
The problem is that HMRC are not accountants or businesses and do not properly understand accounts and what accounts are for in a business. They work on the assumption that accounts are purely there for the provision of profit or loss figures for the benefit of HMRC. If HMRC becomes the sole arbiter of what accounts need to look like and the manner in which they are put together and submitted to them, many (if not most) businesses would not survive.
They need to be reined in - but sadly they won't because there are too many outside entities hoping to make lots of dosh out of these new ways of doing things.
They need to be reined in - but sadly they won't because there are too many outside entities hoping to make lots of dosh out of these new ways of doing things.
clockworks said:
jammy-git said:
What do you do in the event of loss, fire, etc?
If my house burns down I'll have bigger things to worry about than losing a pile of paperwork. Tax bill is only a few hundred quid.Worst case I can get electronic copies of all the invoices from the supplier, and see my receipts on internet banking
Over my 40 plus years of looking after clients (thousands of them) only once did a client lose paperwork to a fire - and that was probably a deliberate ploy by the client as he was under a tax investigation. It was a long time ago and the client is long since dead.
Keeping digital records is a completely separate (and much simpler) issue than getting compliant with HMRC's Making Tax Digital rules.
carl_w said:
Already file VAT electronically.
TBH it's the original proposals that were more of a worry -- implied that you'd have to have your accounts made up every quarter rather than annually. Hopefully it won't come to that as the paperwork is onerous already.
To be fair, the current MTD for VAT is not too onerous. It's what's coming along behind it that is more worrying.TBH it's the original proposals that were more of a worry -- implied that you'd have to have your accounts made up every quarter rather than annually. Hopefully it won't come to that as the paperwork is onerous already.
plasticpig said:
One of the driving forces behind the supplemental data HMRC are proposing to collect is so they don't have to do so many VAT inspections. For instance if they can tell why the input VAT exceeds the output VAT for several VAT returns in a row from the supplemental data provided then they may not carry out a VAT inspection.
They don't have many VAT inspections now.markcoznottz said:
What about a free simple version for non vat registered sole traders etc.
Not required yet. They were hoping such a product would be in place by 5 April 2018 because that was the original implementation date of "full fat" MTD.That has now been postponed until April 2020 at the earliest.
What does a commercial software company get supplying a product for nothing?
jammy-git said:
The Freenium model is a well travelled business model.
Explain how it works. Most "free" software isn't really free. Most of us have acquired it when we bought a product so the cost was included in the purchase of the machine. This giving away of software is so successful that some of what used to be "free" is no longer free. That obviously worked. My Excel package used to be "free". Now I have to pay an annual fee for it.
PurpleMoonlight said:
HMRC admits MTD will cost business £37m but extra tax of £1bn will be collected (which is the real reason for this).
http://www.dailymail.co.uk/money/news/article-6122...
HMRC has never explained how they assume that MTD will result in an extra tax take for them.http://www.dailymail.co.uk/money/news/article-6122...
PurpleMoonlight said:
I would presume the hope less likelihood of incorrect reporting?
Seems an awful lot though.
Why should incorrect posting automatically assume that under the current reporting systems there are tax shortfalls? Unless they are assuming that the incorrect reporting is down to deliberate understating of income and profits - which is, of course, fraud.Seems an awful lot though.
So far, HMRC has not stated that M<TD was anything to do with cutting down tax fraud. Are they being "economical with the truth" of their motives?
And a recent tax case has thrown out HMRC late filing penalties on the basis that their e-mail communications to the taxpayer were poorly worded, inaccurate and misleading.
This has serious implications for MTD because under MTD, 100% of ALL communications from HMRC will be electronic so legal notices will have to be cast iron in their wording and formats to make them legally binding.
At the moment it seems that HMRC's electronic communications are way too vague and imprecise to be legally effective.
This has serious implications for MTD because under MTD, 100% of ALL communications from HMRC will be electronic so legal notices will have to be cast iron in their wording and formats to make them legally binding.
At the moment it seems that HMRC's electronic communications are way too vague and imprecise to be legally effective.
plasticpig said:
HMRC have launched their pilot (open beta) of MTD for VAT today: https://www.gov.uk/government/news/making-tax-digi...
Oh goodie.My software supplier has also updated my software to allow me to file VAT returns on behalf of clients - if I want to.
So not tour operators using the TOMS scheme, those using the various second hand good schemes or retailers using the various permutations of the Retail Schemes?
They'll be pleased to learn that their VAT returns are "simple".
Nice to see they are letting some government agencies off the hook (Local Authorities etc).
They'll be pleased to learn that their VAT returns are "simple".
Nice to see they are letting some government agencies off the hook (Local Authorities etc).
Ian Geary said:
I work for a largish council, and sign off the vat return each month. Whilst not particularly complex, it does involve gathering a lot of data from schools, which presumably opens up issues around their network, security and system compatability.
I understand the need for rti on payroll data, as it has massive uses for assessing welfare benefit claims and detecting fraud.
I can only assume the mtd for vat has the same sort of purpose, and can further assume that as councils typically reclaim vat rather than pay it, we are not their highest risk when it comes to revenue maximisation.
So basically swap the word "complex" for "risky".
I personally haven't got a problem with it, but was surprised our large usa financial system didn't appear on the list of compatible software...
Ian
Initially MTD will give HMRC the same data they currently get. In the future, of course, it will allow them to data mine.I understand the need for rti on payroll data, as it has massive uses for assessing welfare benefit claims and detecting fraud.
I can only assume the mtd for vat has the same sort of purpose, and can further assume that as councils typically reclaim vat rather than pay it, we are not their highest risk when it comes to revenue maximisation.
So basically swap the word "complex" for "risky".
I personally haven't got a problem with it, but was surprised our large usa financial system didn't appear on the list of compatible software...
Ian
LeighW said:
Obviously their long term aim is to be able to interrogate your software from the submission, but that is not in the current requirements, and would require legislation (I believe) to enable them to do this.
Now that they have this right to your business data - they will eventually expect you to provide it to them frequently - at least every three months.
plasticpig said:
If you are registered for VAT on a voluntary basis (under the threshold) then nothing changes. You will still be able to use the old system.
For one year only.I expect that some business that are technically over the £85,000 threshold will still continue to file the old way as long as they can as HMRC has no "in -year" meachanism to recognise if a trader will exceed the £85,000 on a VAT return by VAT return basis.
Mandat said:
and it also seems to contradict the previous comments from Eric that spreadsheets will not be supported by MTD.
HMRC only allow spreadsheet data that has been processed through bridging software. At one point they weren't going to allow spreadsheet data at all but did back down.The British Chambers of Commerce have asked HMRC to defer MTD for VAT - but what do they know.
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