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Where Taxpayers and Advisers Meet

Making Tax Digital

kanrent
Posts:83
Joined:Tue Dec 16, 2014 8:20 am
Making Tax Digital

Postby kanrent » Mon Sep 20, 2021 5:44 am

Hi I'm a retired British non resident landlord with 1 property and pension total income about £20,000 a year will I have to by law sign up for "Making Tax Digital" ? at the moment I complete a paper self assessment every year and my tax affairs are up to date.
I'm a bit worried about this because I'm computer illiterate, and Internet access is unreliable where I live.
(My rental property is fully managed by a UK letting agent).

kanrent
Posts:83
Joined:Tue Dec 16, 2014 8:20 am

Re: Making Tax Digital

Postby kanrent » Mon Sep 20, 2021 7:31 am

Forgot to mention I'm not VAT registered

someone
Posts:521
Joined:Mon Feb 13, 2017 10:09 am

Re: Making Tax Digital

Postby someone » Mon Sep 20, 2021 11:00 am

If your gross rents are 10K or more per year then yes, you will have to do MTD (unless you can get an exemption)

robbob
Posts:3149
Joined:Wed Aug 06, 2008 4:01 pm

Re: Making Tax Digital

Postby robbob » Mon Sep 20, 2021 5:45 pm

If your gross rents are 10K or more per year then yes, you will have to do MTD (unless you can get an exemption)
We can always hope this silly pet project of hmrc may be delayed or scrapped or toned down - watch this space.

kanrent
Posts:83
Joined:Tue Dec 16, 2014 8:20 am

Re: Making Tax Digital

Postby kanrent » Tue Sep 21, 2021 8:02 am

Is it just the same a doing your annual tax return online.
I called HMRC I was told its just replacing the paper self assessment. (or is there more to it)
I'm not VAT registered

someone
Posts:521
Joined:Mon Feb 13, 2017 10:09 am

Re: Making Tax Digital

Postby someone » Tue Sep 21, 2021 9:37 am

I think it's going to be a _lot_ harder to get right.

The quarterly submissions shouldn't be too hard. But the end of year part (equivalent to the current SA return) looks to me to be a nightmare.

Currently when I do my tax return (using the HMRC online service) I go through it all and fill everything in. I then download a copy of the complete return and read through it all looking for mistakes (which are sometimes "random" numbers where I didn't know the answer when I first filled it in so I guessed). Once I think it's all ready I leave it for a month and then login again for a final download and read through before I submit.

But I think we'll be utterly dependent on what the software shows us. It may not even be possible to see everything in one place, you might get something like:

Total Income: 27500
Tax Due: 3100
Tax already paid: 2100
Tax Due Jan: 2550
Tax Due July: 1550

And you'll be on your own trying to work out where the numbers have come from. One thing for pensions, another thing for dividends, yet another for PAYE, another for bank interest, another for self employment, another for property income. You'll have to copy and paste the values into a spreadsheet to make sense of it. (You might even have to use different software to get to all of the different parts for free)

I'll be very surprised if "free" software does anything more than the absolute minimum. It will be all paid add-ons to make sense of this.

It also appears that once you're caught by MTD you cannot escape - hotel california - so I can see self employment people having a "bumper 12K year" and being sucked in and then being forced to do it for 5K a year of income for ever more.

etf
Posts:774
Joined:Mon Nov 02, 2009 5:25 pm

Re: Making Tax Digital

Postby etf » Wed Sep 22, 2021 8:38 am

And the opposite HMRC view (more absolute guff from the people who introduced NRCGT?)...I know which side of the fence I am on:

Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.

HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world. Making Tax Digital is making fundamental changes to the way the tax system works – transforming tax administration so that it is:

more effective
more efficient
easier for taxpayers to get their tax right

robbob
Posts:3149
Joined:Wed Aug 06, 2008 4:01 pm

Re: Making Tax Digital

Postby robbob » Wed Sep 22, 2021 10:46 am

more effective
5 submissions per year rather than 1 how is that more effective?

more efficient
5 submisions per year how is that more efficient ?
easier for taxpayers to get their tax right ?
So its easier to break one simple annual task down into 5 sub sections that need to be aligned as appopriate. When was quickly adding and submitting frequently under time constraints safer than doing once a year at a time that suits the individual - have they thought some bods might actually go on holiday for 6-8 weeks? probbaly not


With their logic it would be easier to do car tax renewals 5 times a year - their logic is pretty much nonsensical for any bods not reliant on means tested benefit who are well able under current rules to submit a simple annual summary of their income. The powers that be who are driving this nonsense through should be sacked forthwith.

etf
Posts:774
Joined:Mon Nov 02, 2009 5:25 pm

Re: Making Tax Digital

Postby etf » Wed Sep 22, 2021 12:08 pm

Accountingweb article:

MTD fails to reduce the tax gap
by Rebecca Cave
The gap between amount of VAT paid and VAT expected to be paid has increased by £2.3bn during the first year of MTD for VAT, undermining a key justification for the MTD programme.


Reader reply:

I think this demonstates the lack of joined up thinking in a failing organisation
HMRC had the orportunity to "demonstrate" that the daft MTD project was worthwhile. They failed to bend their thinking and daft assumptions.
They have now demonstrated that MTD increases the tax gap, if assumptions and models remaimed constant.
Is there no oversight in HM Gov?


I expect HMRC Freedom of Information Bods will now scramble to prevent the release of any more damaging information....they have previous form in this area.

etf
Posts:774
Joined:Mon Nov 02, 2009 5:25 pm

Re: Making Tax Digital

Postby etf » Wed Sep 22, 2021 12:21 pm

Another reader reply:

I was still at HMRC when this shower of sh*te was being touted to front line VAT officers as the greatest thing ever.

All the newbies thought "Ooooh...." and all the experienced officers thought "this won't make a blind bit of difference"

Guess which category were marked down for being 'non corporate' and for not getting on board with the future?

In fairness, it wasn't just advisors that thought it was a complete waste of time.


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