More negative feedback for Jim Harra's MTD for IT.
10th Aug 2022 10:10
The short answer is we accountants do not have the capacity to digitise our clients records, nor to correct the digital records prepared by our clients (which can take longer than scrapping our client's attempts and starting again from scratch). Our job is to prepare accounts and Tax Returns, it is not to teach our clients how to use a computer or how to become bookkeepers. We all know it takes years of experience to become a bookkeeper, so how can we teach our entire client base? Add to this the huge number of experienced accountants that are retiring by 2024 because of MTD (I know several personally) will increase the shortage of accountants further.
The only way we could cope with the workload is to (1) switch to monthly bookkeeping for all clients and (2) hire staff now to get them trained up. But if we hire staff now, who is going to pay for them? Given the massive financial pressures on clients as a result of Brexit/Covid/Inflation/Energy costs, clients can't afford the extra costs. And in any case, HMRC have kicked the MTD-can down the road so many times and the complete lack of detail and disastrous pilot (only 8 participants after 5 years), I can't see how MTD can go live in 2024. So who is going to risk training more staff when they might not be needed in 2024?
And what is the point of MTD? We warned HMRC it would increase error and sure enough, the VAT gap increased the first year of MTD VAT. All that cost for less tax. Maybe the increase in the tax gap is the "saving" that HMRC said "customers" would benefit from as a result of MTD? Silly me, I had thought HMRC had been arguing the cost of the software and time was the saving. No, it's because everyone will be paying less tax because the software allows them to put all their personal expenses against the business and claim VAT on everything including wages, drawings and the VAT payment itself. HMRC don't seem to mind at all and accept any rubbish as long as it is digital rubbish.