Using bridging software for MTD

mills112

https://forums.moneysavingexpert.com/discussion/comment/82152453#Comment_82152453

it would be good if they could accept lone developers' systems for their own personal use as people with some knowledge can develop their own spreadsheets for record keeping, which will be acceptable to HMRC as these spreadsheets aren't exactly rocket science to create!

but as I said earlier, it will not be possible to sell the product as there are data security issues as well as insurance issues for failures and errors, which only a large company will have the capability to sort out.

tax reporting should be made as simple as possible and shouldn't cost the reporting person money to report if they want to do it themselves, otherwise no one will be reporting anything, which is what HMRC is already spending money trying to prevent!

flaneurs_lobster

you have to think that HMRC needs to vet these companies stringently as don't forget they will have access to your personal data so i can see a hoard of scammers out there cashing in on this to steal your data. and even the companies that get accreditation, i hope HMRC will do enough security vetting of how safe your data will be kept by these companies before giving them accreditation.

Can't speak to MTD software but having been involved in getting a bureau payroll system accredited it is very exacting and as you say is not just concerned with getting the sums right - the company has to be vetted too.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82152472#Comment_82152472

tax reporting should be made as simple as possible and shouldn't cost the reporting person money to report if they want to do it themselves, otherwise no one will be reporting anything, which is what HMRC is already spending money trying to prevent!

I couldn't agree more. The idea that I have to engage some private company and pay them a fee just in order to report my taxes because HMRC couldn't develop a programme themselves made my blood boil.

I think I did see some suggestion that HMRC might be coming up with their own product. So I will keep my fingers crossed for that.

mills112

https://forums.moneysavingexpert.com/discussion/comment/82152694#Comment_82152694

i think it is very entitled of HMRC to force everyone to pay for accountants and software to report their income as it is HMRC that is going to benefit from the tax, not the individual tax payer that this affects. if HMRC does not provide a way for people to report earnings for tax then they should allow people to claim the cost of the accountants and software subscriptions back as expenses as it is an additional expense that wasn't there before!

it is particularly grating that they force low earners to pay for the reporting service, people whose turnover is only £20k in tax year April 2028. for those people, if you start taking away expenses, we are talking about people on mimimum wage probably! really is atrocious in my opinion.

if they want people to report more regularly, then fair enough, but they should be providing the software for people to do the reporting and not force people to pay for software that they don't even know will blooming work!

i am sure they are breaking the law somewhere as i believe that as long as you disclose your earnings for tax purpose, in whatever form that you may choose to do so, is all that you are legally required to do as it is their problem to sort out the tax from the information that you have provided. you shouldn't be liable for providing the information in the form that they want and certainly not to have to pay for doing so! you haven't really broken any law as you have told them how much you earn, so you haven't avoided tax in any way.

i think there is going to a big stink come April 2028 when low income earners are going to have to pay for submitting their earnings to be taxed.

DRS1

Yes I agree. But

1 A lot of self employed people now use digital services to send out their bills so for them the step to use that digital service for reporting their tax is probably a small one.

2 I think you will be allowed to deduct the cost of the MTD service for tax purposes.

mills112

https://forums.moneysavingexpert.com/discussion/comment/82152877#Comment_82152877

when i first heard of MTD, i thought that it just mean you do self assessment every quarter instead of every year. sounds simple enough as the idea is for HMRC to get the returns more regularly rather than annually. until i saw that isn't the case and in fact you have to start paying for accredited software to do your returns going forward, and there are so many out there, with ones focussing on certain types of income, it isn't that simple to actually start doing the MTD.

i don't know about self employed traders using digital services already to send out their invoices as i have come across a lot that send out invoices manually.

but self assessment is about all income streams, so even if the trader uses a digital platform to send out their invoices already and they have other income streams, like rental income, investment income, savings income, they would still need to work out what to do with these other income streams that used to be done through self assessment as i understand you no longer do self assessment if you have to do MTD.

good to hear that you can claim the costs of these software and accountants as expenses!

DRS1

It is only self employed income/expenses and rental income/expenses which need to be reported quarterly (so far). The rest of the income streams and CGT will get swept up in a year end submission which presumably will be like the self assessment return but I haven't seen one yet. I think others on here have done their year end submission already for 25/6 using MTD (maybe that was using Sage? I forget)

Don't forget there are changes coming down the track to the way the self employed (well self assessed) have to pay their tax - the payment on account system being turned into 12 monthly instalments instead of 2 half yearly instalments. All for the convenience of the taxpayer of course!

mills112

https://forums.moneysavingexpert.com/discussion/comment/82152897#Comment_82152897

the only thing that has been done for MTD is the first quarterly submission, the deadline was last month, and I read half of the people missed the deadline but HMRC has made the decision not to fine them! the final return isn't until end of March next year, so I guess HMRC is still working on it!

that is interesting to hear that the MTD is only for self employment and rental income for the quarterly submissions. i thought it covers all income.

i read from the "Low Incomes Tax Reform Group" link provided earlier by the other member, that you register self employment and rental income separately for MTD. i wonder if that means they are reported separately.

yeah, i have heard about self assessment payments being spread out monthly, which I think is a good thing as it can be a big burden when you have to pay a large bill at the end of January, even if you have the money to do so!

DRS1

i read from the "Low Incomes Tax Reform Group" link provided earlier by the other member, that you register self employment and rental income separately for MTD. i wonder if that means they are reported separately.

Yes they are (but as I said before I don't know if this means you can separate MTD providers - eg the one that specialises in landlords for the rent and someone else for the self employed income).

yeah, i have heard about self assessment payments being spread out monthly, which I think is a good thing as it can be a big burden when you have to pay a large bill at the end of January, even if you have the money to do so!

Yes that is what they say - easier for people to afford it. But the crossover is going to be painful.

mills112

https://forums.moneysavingexpert.com/discussion/comment/82152909#Comment_82152909

i will look into the matter of whether you can use different software for MTD reporting if you have self employment and rental income. i am guessing you will be able to as i said, the software seem to be specialising into the different groups of reporting.

i read on an accountancy forum where the accountants were discussing the topic with each other and wondering if they can just push through rubbish in the quarterly reporting and clean it all up for the final reporting as that is the one where the tax is calculated. this way they can reach the quarterly submissions deadline easier if they don't have to be so pedantic about it 😁