Making Tax Digital
Discussion
JagLover said:
Personally I think it is a rather old fashioned view that HM Revenue and Customs should be required to employ thousands of people to check accounting records when simple data analysis by computer can do so using modern technology.
There will still be a need for both VAT inspections and tax investigations but if basic errors can be detected with the minimum of Revenue staff time it should be celebrated.
The problem is that in order for HMRC to perform this "simple data analysis" they need to be given enormous powers and rights that they currently don't have.There will still be a need for both VAT inspections and tax investigations but if basic errors can be detected with the minimum of Revenue staff time it should be celebrated.
Maybe you are happy with the state having full access to everything you do from a financial point of view coupled with much personal data. It doesn't fill me with joy or confidence that they will use this data effectively or that they can retain it securely.
Eric Mc said:
That's why they used to send VAT Inspectors out to businesses. They stopped most of that about 10 to 15 years ago.
That's why they invented Flat Rate VAT for small traders (it eliminated virtually all Input VAT errors) Flat Rate VAT has now been effectively abandoned.
Effectively, HMRC wants 100% access to 100% of business records 100% of the time.
Under the current law they don't have that right.
Once MTD goes through, they will.
They pretty much do have that right. They have the power of entry and can demand to see any records concerning the business and also search the business premises. What they can't do without a court order is seize documents. That's why they invented Flat Rate VAT for small traders (it eliminated virtually all Input VAT errors) Flat Rate VAT has now been effectively abandoned.
Effectively, HMRC wants 100% access to 100% of business records 100% of the time.
Under the current law they don't have that right.
Once MTD goes through, they will.
k.plasticpig said:
Eric Mc said:
That's why they used to send VAT Inspectors out to businesses. They stopped most of that about 10 to 15 years ago.
That's why they invented Flat Rate VAT for small traders (it eliminated virtually all Input VAT errors) Flat Rate VAT has now been effectively abandoned.
Effectively, HMRC wants 100% access to 100% of business records 100% of the time.
Under the current law they don't have that right.
Once MTD goes through, they will.
They pretty much do have that right. They have the power of entry and can demand to see any records concerning the business and also search the business premises. What they can't do without a court order is seize documents. That's why they invented Flat Rate VAT for small traders (it eliminated virtually all Input VAT errors) Flat Rate VAT has now been effectively abandoned.
Effectively, HMRC wants 100% access to 100% of business records 100% of the time.
Under the current law they don't have that right.
Once MTD goes through, they will.
Why is everyone so keen to support the government on this? On PH we can normally rely on people to be against HM Gov obtaining massive data on our affairs. On this topic everybody seems to think it's all OK and they will only do "good and correct" things with this data - and they won't lose it or allow it to be stolen or fall into the wrong hands.
Eric Mc said:
Which I presume you think is a fairly trivial matter as the ultimate goal of MTD is to get the underlying documents as part of normal filing.
Why is everyone so keen to support the government on this? On PH we can normally rely on people to be against HM Gov obtaining massive data on our affairs. On this topic everybody seems to think it's all OK and they will only do "good and correct" things with this data - and they won't lose it or allow it to be stolen or fall into the wrong hands.
Most people are employed and don't know or care about the requirements of running a business.Why is everyone so keen to support the government on this? On PH we can normally rely on people to be against HM Gov obtaining massive data on our affairs. On this topic everybody seems to think it's all OK and they will only do "good and correct" things with this data - and they won't lose it or allow it to be stolen or fall into the wrong hands.
Just look at the Dividend tax, yes I know my pet hate. Very little dissent because it affects so few people. If they suddenly saw their Income Tax rate increase by 5% which we have they would be screaming from the roof tops.
Eric Mc said:
Which I presume you think is a fairly trivial matter as the ultimate goal of MTD is to get the underlying documents as part of normal filing.
Why is everyone so keen to support the government on this? On PH we can normally rely on people to be against HM Gov obtaining massive data on our affairs. On this topic everybody seems to think it's all OK and they will only do "good and correct" things with this data - and they won't lose it or allow it to be stolen or fall into the wrong hands.
In terms of VAT it's what you would have to provide a VAT inspector with anyway. I am not convinced that HMRC want that level of detail Even with the self employment stuff HMRC are currently only asking for categorized income and expenditure data. Why is everyone so keen to support the government on this? On PH we can normally rely on people to be against HM Gov obtaining massive data on our affairs. On this topic everybody seems to think it's all OK and they will only do "good and correct" things with this data - and they won't lose it or allow it to be stolen or fall into the wrong hands.
The key word is "currently". Once they have their foot in the door, digitally speaking, they will push it open all the way.
Indeed, when MTD was first outlined, it was couched on the basis that it would be 100% disclosure with full document back-up from day 1.
Obviously, there has been a lot of water under the bridge since this time last year when this is what was being told at professional update lectures. Their present stance is that they DON'T want all that mass of detail - yet.
But I have no doubt that this is the start of a process which will eventually lead to full disclosure as a matter of course to the government of all your business and financial details together with all your personal data - and all held in one spot.
It's a Russian hackers wet dream.
Indeed, when MTD was first outlined, it was couched on the basis that it would be 100% disclosure with full document back-up from day 1.
Obviously, there has been a lot of water under the bridge since this time last year when this is what was being told at professional update lectures. Their present stance is that they DON'T want all that mass of detail - yet.
But I have no doubt that this is the start of a process which will eventually lead to full disclosure as a matter of course to the government of all your business and financial details together with all your personal data - and all held in one spot.
It's a Russian hackers wet dream.
Eric Mc said:
The key word is "currently". Once they have their foot in the door, digitally speaking, they will push it open all the way.
Indeed, when MTD was first outlined, it was couched on the basis that it would be 100% disclosure with full document back-up from day 1.
Obviously, there has been a lot of water under the bridge since this time last year when this is what was being told at professional update lectures. Their present stance is that they DON'T want all that mass of detail - yet.
But I have no doubt that this is the start of a process which will eventually lead to full disclosure as a matter of course to the government of all your business and financial details together with all your personal data - and all held in one spot.
It's a Russian hackers wet dream.
HMRC have never talked about 100% disclosure with full supporting documentation. Nor did they ever say that invoices and supporting documentation had to be stored digitally. Indeed, when MTD was first outlined, it was couched on the basis that it would be 100% disclosure with full document back-up from day 1.
Obviously, there has been a lot of water under the bridge since this time last year when this is what was being told at professional update lectures. Their present stance is that they DON'T want all that mass of detail - yet.
But I have no doubt that this is the start of a process which will eventually lead to full disclosure as a matter of course to the government of all your business and financial details together with all your personal data - and all held in one spot.
It's a Russian hackers wet dream.
What did happen though is that some IT illiterate parts of the profession jumped to conclusions based on examples of how individuals and businesses could use apps/services like Receipt Bank and AutoEntry to automate data entry into a software accounting package.
I mean your conspiracy theories fail even the most basic logic check for anyone familiar with big data.
And if you're so scared of Russian hackers, why aren't you advocating a return to full paper tax returns processed manually with the all the extra HMRC staff, costs and taxes that entails?
Out of interest, Eric, how exactly are you helping your clients prepare? Are you just sticking your head in the sand, hoping that somehow you can hold back the tide of technological progress with ill-informed rants on a internet forum? Because there are practices out there who have 100% of their clients using accounting packages that integrate with their practice management system and they will eat competitors like you for breakfast.
This is about the future of our tax system. It's about how we deal with:
- the gig economy and the highest levels of self employment this country has ever seen
- an economy transformed by automation
- record levels of landlords
- businesses with no physical presence and taxpayers who can run every aspect of their business from their phone
- grandparents as au fait with social media as their grandchildren
PF62 said:
From the same document -
"The MTD requirements for VAT will apply to any VAT registered business with a taxable turnover over the VAT registration threshold.
This requirement will remain, even if they fall below the threshold at a later date. The requirement will cease upon deregistration."
If you don't have to submit the supplementary data, then what's stopping a business from keeping their existing spreadsheet (or whatever) ledger going, and just use the totals from that to create one transaction for the VAT quarter for sales and purchases? The MTD accounting software will then total up the single transaction and come to the same conclusion. HMRC will be none the wiser unless they later ask to see the supporting supplementary data. "The MTD requirements for VAT will apply to any VAT registered business with a taxable turnover over the VAT registration threshold.
This requirement will remain, even if they fall below the threshold at a later date. The requirement will cease upon deregistration."
Edited by PF62 on Wednesday 20th September 21:32
There are still massive amounts of this that are unclear - despite what others may say on here.
I am not optimistic that this the scaled back VAT only version of MTD will be ready for implementation in April 2019. We've already had one massive hiccup in the introduction of the system and I expect a few more.
At the moment, they can't even get the well established Self Assessment system to work properly.
I am not optimistic that this the scaled back VAT only version of MTD will be ready for implementation in April 2019. We've already had one massive hiccup in the introduction of the system and I expect a few more.
At the moment, they can't even get the well established Self Assessment system to work properly.
Eric Mc said:
There are still massive amounts of this that are unclear - despite what others may say on here.
I am not optimistic that this the scaled back VAT only version of MTD will be ready for implementation in April 2019. We've already had one massive hiccup in the introduction of the system and I expect a few more.
At the moment, they can't even get the well established Self Assessment system to work properly.
This is the HMRC time scale.I am not optimistic that this the scaled back VAT only version of MTD will be ready for implementation in April 2019. We've already had one massive hiccup in the introduction of the system and I expect a few more.
At the moment, they can't even get the well established Self Assessment system to work properly.
HMRC said:
1. October 2017 – private beta (API testing) with interested software vendors
2. April 2018 – public beta (pilot) data submission for VAT purposes
3. From April 2019 – data submission for VAT purposes (that is all VAT-registered businesses whether the business is unincorporated or not); Mandated for VAT registered businesses with a turnover above the VAT threshold, but all VAT registered businesses can use the service.
2. April 2018 – public beta (pilot) data submission for VAT purposes
3. From April 2019 – data submission for VAT purposes (that is all VAT-registered businesses whether the business is unincorporated or not); Mandated for VAT registered businesses with a turnover above the VAT threshold, but all VAT registered businesses can use the service.
mjb1 said:
If you don't have to submit the supplementary data, then what's stopping a business from keeping their existing spreadsheet (or whatever) ledger going, and just use the totals from that to create one transaction for the VAT quarter for sales and purchases? The MTD accounting software will then total up the single transaction and come to the same conclusion. HMRC will be none the wiser unless they later ask to see the supporting supplementary data.
Nothing at all, but when they do find out, to quote from the release "Sanctions for failure to keep or preserve digital records for VAT purposes will correspond to the existing penalties for failure to keep or preserve records for VAT purposes".PF62 said:
Nothing at all, but when they do find out, to quote from the release "Sanctions for failure to keep or preserve digital records for VAT purposes will correspond to the existing penalties for failure to keep or preserve records for VAT purposes".
A spreadsheet is a digital record. There may be some people keeping a hand written ledger but I doubt there are that many.plasticpig said:
PF62 said:
Nothing at all, but when they do find out, to quote from the release "Sanctions for failure to keep or preserve digital records for VAT purposes will correspond to the existing penalties for failure to keep or preserve records for VAT purposes".
A spreadsheet is a digital record. There may be some people keeping a hand written ledger but I doubt there are that many.Does it "receive information from HMRC via the API platform in relation to a relevant entity’s compliance with obligations under the regulations."?
Does it "contain a specific data set of supplementary information"?
If not, I am not sure that it ticks the box required by MTD of being "functional compatible software".
PF62 said:
mjb1 said:
If you don't have to submit the supplementary data, then what's stopping a business from keeping their existing spreadsheet (or whatever) ledger going, and just use the totals from that to create one transaction for the VAT quarter for sales and purchases? The MTD accounting software will then total up the single transaction and come to the same conclusion. HMRC will be none the wiser unless they later ask to see the supporting supplementary data.
Nothing at all, but when they do find out, to quote from the release "Sanctions for failure to keep or preserve digital records for VAT purposes will correspond to the existing penalties for failure to keep or preserve records for VAT purposes".PF62 said:
Of course a spreadsheet is a digital record, but does it "keep records in a digital form as required by the regulations"?
Does it "receive information from HMRC via the API platform in relation to a relevant entity’s compliance with obligations under the regulations."?
Does it "contain a specific data set of supplementary information"?
If not, I am not sure that it ticks the box required by MTD of being "functional compatible software".
Originally HMRC said Excel was not compliant.Does it "receive information from HMRC via the API platform in relation to a relevant entity’s compliance with obligations under the regulations."?
Does it "contain a specific data set of supplementary information"?
If not, I am not sure that it ticks the box required by MTD of being "functional compatible software".
Then they said it could be used as the basis of the MTD submission - but not the submission itself (which had to be made using specific MTD software).
I'm sure they'll change their minds again at some point.
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