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MTD muddle
I was catching up on my Taxation reading and noticed the article ‘Time to act’ (9 January 2020, page 15) which was referring to making tax digital (MTD). I was astonished to read statements such as ‘how are Britain’s small businesses doing when it comes to realising the multitude of benefits of the change?’ As someone who deals with small businesses, I can’t recall any of my clients realising any benefits from MTD.
Nor have my dealings with HMRC over MTD been any better. HMRC’s websites on the subject have been a master class in confusion. I like to think of myself as being computer literate, but at times was driven to distraction by MTD. Other professionals I have spoken to have had similar problems.
Once MTD has been fully operational for a few years, it will be interesting to see who has benefitted most from its introduction: HMRC, businesses or software companies.
Alan Poole, Alan Poole & Co.
VAT and MTD
I was interested in Shaun Shirazian’s article on making tax digital (MTD) for VAT and how it has progressed (‘Time to act’, Taxation, 9 January 2020, page 15).
I have not been involved with MTD for VAT. My practice is small and my clients are all individuals with none earning above the VAT threshold. I have spoken to clients and keep them abreast of MTD and what it could mean for them. They are all terrified of what HMRC is forcing them into. All have smartphones, PCs and tablets and are adept with modern technology. What they are not skilled at is inputting and using them to deal with HMRC’s MTD requirements.
They have no wish to be forced into acquiring software and do not currently use it. Spreadsheets and paper work perfectly well for them. My clients all work 24/7 and do not have time to take on MTD as it stands. And I cannot possibly input quarterly tax information for every client because I could not charge them for my time. If I did, my charges would have to double (at least).
HMRC says MTD will vastly reduce errors. It won’t; mistakes will still be made using software: to err is human and to err with tax is inevitable.
I also saw the promotion on digital links (see Taxation, 6 February 2020, page 15). It was very complicated. I was lost after the first paragraph and the illustrated example flummoxed me. I am now terrified that the whole tax system will be in the charge of those who live and breathe digital.
HMRC needs to listen carefully to the recent survey and feedback on VAT and MTD. If it is hell bent on introducing an extremely complicated digital regime for the self employed it needs to provide the wherewithal to its ‘customers’ to enable them to cope with it. Those customers should not have to finance this. And please do not roll out the mantra that tax professionals need to ‘educate their clients’. That is costly and we do not have the time to do this.
HMRC is like all government departments. Universal credit is a prime example of a concept that, on the face of it, sounds wonderful. No consultation was sought from those who had to implement it and the result has been chaos and hardship. Millions of pounds have been spent on the rollout and then on fixing the fallout.
I expect readers will dismiss me as a dinosaur, I am not. I cope with my smartphone, self assessment, tablet and PC, but wonder whether other tax practitioners can empathise with my feeling of total powerlessness at the prospect of MTD. I face the prospect of ceasing my business and my clients will very likely be forced to go elsewhere and pay more for something that is being foisted on them.
Gerri Baird.
More MTD
I have to agree wholeheartedly with Gerri Baird's comments (Feedback-19th March 2020) and then to read in the same issue that HMRC will no longer be sending paper returns to those who have always used them is quite disgraceful. Do these people forget who pays their salaries?
I am sure all those who still file paper returns are (like me) in the 'elderly' bracket and in many cases will have to find someone to print a form for them. Surely HMRC should be making things easier for this age group and not more difficult. I suppose it will even be too much to ask for the 'short tax return' to be available to print off.
I can envisage this being the final straw - retirement beckons which, while it may delight the powers that be, will greatly upset my clients who would then face a big increase in fees or, dare I say, just not bother.
AN Other-Dinosaur.
