The filing deadline has come and gone, so our thoughts firstly turn to MTD4VAT and then, of course, it’s ‘Big Brother’ MTDfB.
You are reading this issue in early March and the January filing hiatus may seem like a long time ago, but April brings us the introduction of MTD4VAT, with the first returns having to be filed under the new regulations in the next few months.
I sincerely hope that you have all settled on the software you are going to use to file returns on behalf of your clients, and also the bridging software you are going to use for those cases that require off books workings or for clients who are refusing to pay exorbitant upgrade costs or are happy to continue using spreadsheets.
If you are still searching for a solution then don’t forget that we produced a special MTD4Vat software supplement e-magazine in February. This showcased how five top providers were dealing with the problem and if you missed it and would like a copy please email Tony@icpa.org.uk and ask for a copy and I’ll make sure you get a one.
Now that we know for certain that we are only filing the same nine boxes as before and that the bridging software means there really is no necessity to move to the cloud based solely on MTD4VAT as the decision driver. There are lots of valid and good reasons to use cloud-based bookkeeping packages that are too numerous to mention, but MTD4VAT is simply not one of them, despite the outpourings from some software providers. If you have a client who will benefit from upgrading to the cloud for commercial reasons then make that change, but as our VAT supplement quite clearly shows MTD4VAT does not mean you have to change. The bridging software is affordable, easy to use and means that many clients can continue to work the way they have always worked unless, of course, they are using manual records.
What MTD4VAT is doing, however, is giving HMRC a much better insight into accountants in practice, because as you will all know if you want to file on behalf of your clients you need to have an Agent Services Account. The questions asked to open an account will provide HMRC with more information about Agents all in one place; in the past the information about us has been held across various platforms. We will have to state and place on record our Money Laundering Supervisory body, which is information HMRC has never had before, because practices are often multi-disciplined and multi-institute, meaning the choice of supervisory body is not obvious.
For those accountants not members of the supervisory institutes who have somehow after all this time still not registered with HMRC for money laundering purposes they will be forced down this route if they want to get an Agent Services Account, and the late registering fines will doubtless follow.
Getting back to the filing deadline hiatus, it is a fact that 48% of tax returns were still outstanding as of 1 January, which is a very sobering thought. I know how hard our practice had to work throughout December and January as we raced to get accounts produced and returns filed. When we factor in MTDfB and contemplate filing for EVERY client every three months I must admit a shudder goes down my spine. However, once the remaining manual record keepers have been sorted and with some form of bridging software in place for the spreadsheet users will it be so bad?
Obviously, there is still a year to go before the supposed implementation date and in all honesty the outpourings from HMRC have been aimed and preparing us for another delay. But with no fines for the in-year quarters filings, will it be so bad as we simply file the interim three quarters based upon a review and then concentrate our work on the final quarter, adjusting errors and omissions before the making the final filing? It all sounds workable. However, HMRC want every error to be adjusted back to the correct quarter in which the error arose and that quarter re-filed, which frankly is a non-starter. So when we are sure when MTDfB is actually going to happen we must make sure we get HMRC to accept that errors are adjusted in the quarter they are found not in the quarter they arose.
Finally, as HMRC won’t do it, let me say well done for putting in the extra hours of work to file so many returns in December and January. Wouldn’t it have been nice if HMRC had said so as well.
• Tony Margaritelli Chair, ICPA
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