MTD, sounds like a new sex disease but it’s actually the latest government scheme. Making Tax
Digital.
Our clients are ready for this without even knowing, are you aware of this initiative?
HMRC have not escaped the governments austerity measures. They have been looking for a solution to be more efficient. RTI, Ct600, taxpayer online accounts and now HMRC claim that MTD is just another way to achieve this. They will get the taxpayer to enter the data into their system.
That’s how they sold it to the politicians and the public. It did not matter if your allegiance was blues, reds or yellows. BUT wait what was the need to get the data into a special format, why was xbrl or pdf not good enough. You may not be aware of this but HMRC have been using data analytics to do their risk assessment when looking at taxpayers affairs and picking who to investigate. To put it into perspective they now have about 27000 (63000 – 2010) staff to monitor about 12 million tax return filers. Not an easy task hence why we have had various specialist teams. Focusing on Landlords in the South East, restaurants, mini cab firms, online traders and unrepresented taxpayers. Their task simplified because their system tells them who they need to check.
IS IT fair to ask business to buy accounting software when they do not need it? Can it be right that
HMRC is acting as a salesman for Software companies. HMRC do not care, they are not paying for it the taxpayer is. It’s also more work for accountants, now there will be four returns in a year.
Each self employed person will have to file data every 3 months. Ok it will start with vat registered
businesses but it will be rolled out to all. There is no exemption level such as for pensioners, single
property landlords and so on.
If you do not comply then they will fine you and pursue these in court.
