Making Tax Digital
Discussion
Eric Mc said:
That's all right then. Bad law affecting a smallish sector of the working population can't really be that bad after all.
What about incomes £100-122k not fairWhat about child benefit earn 1 salary £60k get zero have 2x£49,999 keep it all - not fair
Removing debt financing from the p&l of a rental property only for those not set up as limited or self employed - not fair
Not increasing the state pension age 20 years ago to not have to increase it as much for the future - not fair
Moving the age you can draw private pensions from 55 to a higher age linked to the state pension even though it's a pension pot not a house of cards Ponzi scheme
Not allowing those with a known hereditary problem meaning much shorter life that they can draw pension
Etc
Life isn't fair Eric Mc. but you choose your battles.
Welshbeef said:
Eric Mc said:
That's all right then. Bad law affecting a smallish sector of the working population can't really be that bad after all.
What about incomes £100-122k not fairWhat about child benefit earn 1 salary £60k get zero have 2x£49,999 keep it all - not fair
Removing debt financing from the p&l of a rental property only for those not set up as limited or self employed - not fair
Not increasing the state pension age 20 years ago to not have to increase it as much for the future - not fair
Moving the age you can draw private pensions from 55 to a higher age linked to the state pension even though it's a pension pot not a house of cards Ponzi scheme
Not allowing those with a known hereditary problem meaning much shorter life that they can draw pension
Etc
Life isn't fair Eric Mc. but you choose your battles.
We've already seen some major governmental backpedalling on MTD and I fully expect to see more as this nonsense attempts to progress.
Rovinghawk said:
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.
I don't care about HMRC staff time- I care about my time. Why should I work more so that they can work less?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.
For any business of any size using proper accounting software is far more likely to save time once everything, not just generating VAT returns is considered (as long as the user has received training of course). From being able to generate customer statements at the click of a button, to having a trial balance at the year end ready to be uploaded into accounts reporting software.
So what the government is actually asking everyone to do (assuming the reporting requirements stay at a detailed VAT report) is to do the same work (or less), just in a different way, so they can save time and money
Eric Mc said:
No such thing as a self employed landlord (running a buy to let is not considered to be a trading/employment/business) type activity.
But yes, buy to let landlords are the main people affected by the interest charge restrictions recently introduced.
That was my point. AFAIK only landlords incorporated escape the changes.But yes, buy to let landlords are the main people affected by the interest charge restrictions recently introduced.
Eric Mc said:
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.
Speaking personally, despite working in practice I don't regard HM Revenue & Customs as "the enemy". If there is a way to legitimately reduce a client's tax liability then we will advise them accordingly, but that is a different matter to turning a blind eye to error or deliberate misstatement. New technology is not to be feared if used appropriately. Anyone who has renewed their road tax these past few years can see how it can improve the experience of interacting with government agencies to the benefit of both parties.
It is not the government's job to dictate to businesses the manner and style of their book-keeping. There is a massive conceit at the heart of the whole MTD project that small businesses are -
a) incompetent
b) cheating on their taxes
c) untrustworthy
d) have inadequate and inaccurate accounting
In my experience over 40 years of dealing mainly with smaller business and landlords, their accounting records may be basic on occasion but on the whole, they are not inaccurate. Indeed, accounting standards do not ask for "accuracy" and do not even state that "accuracy" is possible. What they ask for is the accounts to be "true and fair",
Once a professional has reviewed the original bookkeeping entries, it is expected that the final figures will satisfy the "true and fair" test. HMRC and the Inland Revenue before them has always accepted that this was the basis for assessing the tax position of a business or landlord.
Throughout the MTD process, HMRC has thrown out large figures of how much tax they claim they are losing out on due to "erroneous" accounts. Although they have been asked repeatedly, they have been unable to show they have arrived at these figures and what assumptions they have made in their calculation.
The assumption by HMRC is that their stipulated MTD system will magically make dishonest businesses honest and sloppy businesses less sloppy. It will do nothing of the sort. Conscientious businesses will agonise and fret and be stressed out by the requirements. The crooks and careless businesses will continue to be crooks and be careless.
a) incompetent
b) cheating on their taxes
c) untrustworthy
d) have inadequate and inaccurate accounting
In my experience over 40 years of dealing mainly with smaller business and landlords, their accounting records may be basic on occasion but on the whole, they are not inaccurate. Indeed, accounting standards do not ask for "accuracy" and do not even state that "accuracy" is possible. What they ask for is the accounts to be "true and fair",
Once a professional has reviewed the original bookkeeping entries, it is expected that the final figures will satisfy the "true and fair" test. HMRC and the Inland Revenue before them has always accepted that this was the basis for assessing the tax position of a business or landlord.
Throughout the MTD process, HMRC has thrown out large figures of how much tax they claim they are losing out on due to "erroneous" accounts. Although they have been asked repeatedly, they have been unable to show they have arrived at these figures and what assumptions they have made in their calculation.
The assumption by HMRC is that their stipulated MTD system will magically make dishonest businesses honest and sloppy businesses less sloppy. It will do nothing of the sort. Conscientious businesses will agonise and fret and be stressed out by the requirements. The crooks and careless businesses will continue to be crooks and be careless.
So said:
Eric Mc said:
No such thing as a self employed landlord (running a buy to let is not considered to be a trading/employment/business) type activity.
But yes, buy to let landlords are the main people affected by the interest charge restrictions recently introduced.
That was my point. AFAIK only landlords incorporated escape the changes.But yes, buy to let landlords are the main people affected by the interest charge restrictions recently introduced.
JagLover said:
Speaking personally, despite working in practice I don't regard HM Revenue & Customs as "the enemy". If there is a way to legitimately reduce a client's tax liability then we will advise them accordingly, but that is a different matter to turning a blind eye to error or deliberate misstatement.
New technology is not to be feared if used appropriately. Anyone who has renewed their road tax these past few years can see how it can improve the experience of interacting with government agencies to the benefit of both parties.
Don't assume that a simple operation like renewing your road tax is a sign that MTD will be a simple process.New technology is not to be feared if used appropriately. Anyone who has renewed their road tax these past few years can see how it can improve the experience of interacting with government agencies to the benefit of both parties.
And the DVLA has already been the source of a number of serious data and identity breaches. Imagine what will happen when such breaches occur at HMRC.
JagLover said:
Eric Mc said:
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.
Speaking personally, despite working in practice I don't regard HM Revenue & Customs as "the enemy". If there is a way to legitimately reduce a client's tax liability then we will advise them accordingly, but that is a different matter to turning a blind eye to error or deliberate misstatement. New technology is not to be feared if used appropriately. Anyone who has renewed their road tax these past few years can see how it can improve the experience of interacting with government agencies to the benefit of both parties.
Given that I'm also a BTL landlord I see HMRC as a body that wants to tax me more and make me less productive at the same time.
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."?
Perfectly possible to do in Excel with some use of VBA.Does it "receive information from HMRC via the API platform in relation to a relevant entity’s compliance with obligations under the regulations."?
PF62 said:
Does it "contain a specific data set of supplementary information"?
I am sure I can come up with a template that meets that requirement.PF62 said:
If not, I am not sure that it ticks the box required by MTD of being "functional compatible software".
Out of the box Excel isn't. It's not a massive amount of work for a developer to make it so. If someone is calculating the figures for a VAT 100 return in Excel then should already have the underlying sales and purchase ledger worksheets required in their workbook. JagLover said:
So what the government is actually asking everyone to do (assuming the reporting requirements stay at a detailed VAT report) is to do the same work (or less), just in a different way, so they can save time and money
No.I have a system that works just fine. HMRC want me to spend time doing more work and spend money on software to save them time & money.
Bad market conditions & bad clients won't put me out of business- HMRC might.
Eric Mc said:
It is not the government's job to dictate to businesses the manner and style of their book-keeping.
That's your opinion based on how it has historically been done in the UK. Looking at other European countries they place more regulations on business, standard Chart of Accounts in France, changing submission methods in Spain recently etc.SunsetZed said:
Eric Mc said:
It is not the government's job to dictate to businesses the manner and style of their book-keeping.
That's your opinion based on how it has historically been done in the UK. Looking at other European countries they place more regulations on business, standard Chart of Accounts in France, changing submission methods in Spain recently etc.And doing something that has a long history of working reasonably well is, to me, a good reason to keep doing it.
And just because other more dictatorial governments might go down a particular path is no reason for ours to copy them.
Even less so now that we have decided to "break free" of foreign rule making. Wasn't that one of the main reasons for Brexit - less oppressive bureaucracy?
98elise said:
If Eric is correct then MTD would have meant me submitting 9 tax returns a year, and my wife about 5. Currently I spend a day making sure everything is right for my 1 tax return. MTD could mean another 9 days I cannot be productive.
Given that I'm also a BTL landlord I see HMRC as a body that wants to tax me more and make me less productive at the same time.
This specific proposal however is for VAT registered business to submit a detailed VAT report. For most such businesses this is significantly less onerous than existing reporting requirements such as the need to submit an EC sales list or an Intrastat return.Given that I'm also a BTL landlord I see HMRC as a body that wants to tax me more and make me less productive at the same time.
It doesn't involve changing the quarterly reporting period (which was initially proposed) nor does it require any additional work for those who have the correct software.
So far then MTD is proving significantly less problematic than past changes, such as the need to submit all accounts electronically with electronic tagging.
JagLover said:
It doesn't .......................... require any additional work for those who have the correct software.
And for those of us who don't it's additional work & cost.I still don't like the idea of me having additional work & costs so that HMRC can have less. Successful parasites do minimum harm to the host.
And for those who DON'T have the required software, of course it involves extra work, time and cost in order to purchase it, train to use it and integrate it into what they already do. The assumption seems to be that "not having MTD compliant software" means your book-keeping and accounting is poor and inaccurate.
That is a grossly incorrect (not to say - insulting) assumption. Many businesses have perfectly adequate and suitable accounting systems that serve their businesses well. Why should they have to jump top the tune of a government dictat for no additional benefit to themselves?
That is a grossly incorrect (not to say - insulting) assumption. Many businesses have perfectly adequate and suitable accounting systems that serve their businesses well. Why should they have to jump top the tune of a government dictat for no additional benefit to themselves?
Eric Mc said:
SunsetZed said:
Eric Mc said:
It is not the government's job to dictate to businesses the manner and style of their book-keeping.
That's your opinion based on how it has historically been done in the UK. Looking at other European countries they place more regulations on business, standard Chart of Accounts in France, changing submission methods in Spain recently etc.And doing something that has a long history of working reasonably well is, to me, a good reason to keep doing it.
And just because other more dictatorial governments might go down a particular path is no reason for ours to copy them.
Even less so now that we have decided to "break free" of foreign rule making. Wasn't that one of the main reasons for Brexit - less oppressive bureaucracy?
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