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trade vet

MTD ....just what you need

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My accountant just explained the implications of the imminent MTD ....Making Tax Digital which I do not yet fully understand.It appears everyone is going to need the correct softwhere to comply and to daily download their income and expenditure into the HMRC cloud so it is easier for them to keep an eye on you ( I think ). It appears to me to be a bit like providing your annual accounts every 3 months plus a lot more.For thousands who are digitally challenged/illiterate ( like me ) it will be extra work at extra cost for no return.Does anyone else have any comments ( other than pack in all together).......Boring topic for most of you.

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25 minutes ago, trade vet said:

My accountant just explained the implications of the imminent MTD ....Making Tax Digital which I do not yet fully understand.It appears everyone is going to need the correct softwhere to comply and to daily download their income and expenditure into the HMRC cloud so it is easier for them to keep an eye on you ( I think ). It appears to me to be a bit like providing your annual accounts every 3 months plus a lot more.For thousands who are digitally challenged/illiterate ( like me ) it will be extra work at extra cost for no return.Does anyone else have any comments ( other than pack in all together).......Boring topic for most of you.

Daily? Civil servants, don't you just love them.

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14 minutes ago, trade vet said:

My accountant just explained the implications of the imminent MTD ....Making Tax Digital which I do not yet fully understand.It appears everyone is going to need the correct softwhere to comply and to daily download their income and expenditure into the HMRC cloud so it is easier for them to keep an eye on you ( I think ). It appears to me to be a bit like providing your annual accounts every 3 months plus a lot more.For thousands who are digitally challenged/illiterate ( like me ) it will be extra work at extra cost for no return.Does anyone else have any comments ( other than pack in all together).......Boring topic for most of you.

TV. if you are a SE sole trader  it makes no sence to me in being LTD. Rules, regulations are endless...... Been there, done it, never again...

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7 minutes ago, Arfur Dealy said:

TV. if you are a SE sole trader  it makes no sence to me in being LTD. Rules, regulations are endless...... Been there, done it, never again...

AD as I understand,MTD applies to everyone.As regards incorporating or remaining self employed,with this MTD stuff I think having limited liability is worth considering more than ever for anyone running a proper business.

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Theres a huge difference in being a SE sole trader, to being a ltd company. There’s no attraction or benefit in being a limited company if you are a sole trader. IMO

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10 minutes ago, Arfur Dealy said:

Theres a huge difference in being a SE sole trader, to being a ltd company. There’s no attraction or benefit in being a limited company if you are a sole trader. IMO

True story....I know a part time inexperienced dealer who wishes he had been a Ltd co,he was a soft target.This guy did not record a deal properly in his stock book.( one deal)He had bought and sold the car at the same auction.It appeared to me that having established he was financially comfortable,living by himself and owning his house,HMRC then took the view that he must have done this many times ( which he definateley had not ).So what happened,he was assessed for a lot of money and had to remortgage.That could not have happened if he was a Ltd company.......So self employed guys making digital imputting mistakes with MTD .....Good Luck.

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40 minutes ago, Arfur Dealy said:

Theres a huge difference in being a SE sole trader, to being a ltd company. There’s no attraction or benefit in being a limited company if you are a sole trader. IMO

Would you mind expanding on this please mate? I’ve had a LTD Co when I was in construction and it made perfect sense to be LTD in that domain. Why is it better to be ST if you fly solo?

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Slightly related but our accountant tells us that basically the new rhetoric the government plans is to inform people the liability to ensure tax is paid by a company is on them when paying cash, so they should deduct the tax amount when paying and pay it their selves. The ramifications are ridiculous.

No one knows how accountancy fees might change. No one knows how the system will work. Guarantee it'll cost us more money, be a balls-up and make life so much harder. It makes you think the government doesn't want people doing their own thing, doesn't it? <_<

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As I said it’s my opinion.

17 minutes ago, trade vet said:

True story....I know a part time inexperienced dealer who wishes he had been a Ltd co,he was a soft target.This guy did not record a deal properly in his stock book.( one deal)He had bought and sold the car at the same auction.It appeared to me that having established he was financially comfortable,living by himself and owning his house,HMRC then took the view that he must have done this many times ( which he definateley had not ).So what happened,he was assessed for a lot of money and had to remortgage.That could not have happened if he was a Ltd company.......So self employed guys making digital imputting mistakes with MTD .....Good Luck.

So the guy was an idiot, he didn’t cover himself, he didn’t do things right and got caught out. No wonder HMRC threw the book at him. 

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24 minutes ago, EPV said:

Would you mind expanding on this please mate? I’ve had a LTD Co when I was in construction and it made perfect sense to be LTD in that domain. Why is it better to be ST if you fly solo?

Its specifically your choice. 

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24 minutes ago, Arfur Dealy said:

As I said it’s my opinion.

So the guy was an idiot, he didn’t cover himself, he didn’t do things right and got caught out. No wonder HMRC threw the book at him. 

I would say incompetent,he was not a young man,part time,very part time but VAT regd buying and selling one sometimes two cheapies per week through the auction and earning little,just getting by.It was not fair and this guys heath later suffered.

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I think the moral of that tale is if you’re fiddling & get caught you are going to get the book chucked at you so don’t fiddle. I will add that if you give ‘them’ the chance to get their claws into you they will rip you a new arsehole.

As an aside, the vast majority of one-man-band sole traders I know aren’t VAT registered except for one who sells shite & near-deathtraps on Facebook, Gumtree etc. from his front door but isn’t even V.A.T. registered. I’d of thought that would of flagged up ‘something’ but it doesn’t appear to of done so yet.

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1 hour ago, BHM said:

I think the moral of that tale is if you’re fiddling & get caught you are going to get the book chucked at you so don’t fiddle. I will add that if you give ‘them’ the chance to get their claws into you they will rip you a new arsehole.

As an aside, the vast majority of one-man-band sole traders I know aren’t VAT registered except for one who sells shite & near-deathtraps on Facebook, Gumtree etc. from his front door but isn’t even V.A.T. registered. I’d of thought that would of flagged up ‘something’ but it doesn’t appear to of done so yet.

I agree,also it appears it’s not cost effective for HMRC to chase these guys unless they have visible assets.I would imagine with MTD a lot of people will deregister from VAT and just carry on and be better off.

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As normal this scheme is being rolled out over a few years and not bang all in one hit, as its is going to be a MASSIVE headache. 

One of the typically dumb ass things is you will no longer be able to submit your vat return via there on line portal you will have to be registered with a softwear supplier. 

We use sage in the building company which works well but doesnt fit the second hand car market so have done them manually to date not any more what a royal pain this is going to be. 

 

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3 hours ago, BHM said:

As an aside, the vast majority of one-man-band sole traders I know aren’t VAT registered except for one

Did you mean to write "are" VAT registered?

 

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21 hours ago, Nick M.K. said:

Did you mean to write "are" VAT registered?

 

Sorry, I meant the majority of one-man-bands I know aren’t a LIMITED COMPANY, but are VAT registered.

God only knows how I changed LTD CO. to VAT - fingers & brain in flux!

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21 minutes ago, BHM said:

Sorry, I meant the majority of one-man-bands I know aren’t a LIMITED COMPANY, but are VAT registered.

God only knows how I changed LTD CO. to VAT - fingers & brain in flux!

As I understand it,MTD applies to anyone who pays VAT,that is probably most of us on the forum.

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49 minutes ago, trade vet said:

As I understand it,MTD applies to anyone who pays VAT,that is probably most of us on the forum.

Thats the first phase there intentions are to roll it out to anyone paying HMRC tax what ever your legal entity but it will be a few years rolling out process. 

Another expense there putting on small businesses a lot of people use manual or excel to record there transactions HMRC will no longer be allowing you to enter your VAT submission via there old one to 9 box system from the start date you MUST have an accounts package that links with HMRC to submit your vat and tax returns via there on line portal. 

The word on the street is where they wish to end up HMRC can access your info without even leaving there offices as it will all be cloud base, this hasnt been mentioned yet but it is coming, by pushing every small business into an accounts package there one step closer, upon which time they no doubt will need less inspectors only smart ass computers to spot errors or patterns in accounting records, inspectors are very expensive and costly to train so it was an obvious move for them at some point. 

 

All very X files....   

 

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Hi All

This MTD came as a shock to me at the start of the week. I have been doing some research and speaking to different people to see exactly what is required.

As I understand it any VAT registered company can only submit VAT returns through an accounting package that links to the HMRC.

The first package that came to my mind was Sage as I have used them in the past, however, as justina3 mentioned above Sage does not deal with the second-hand margin scheme.

I have been speaking with a company called Autosales Systems (They were the ones that notified me of MTD through their email marketing). They have designed a system for independent car dealers and all purchases & sales etc. which feeds into Sage instantly with the Margin VAT calculated for you. I received a full demonstration this morning and I must say i was very impressed with the simplicity of it. The monthly subscription for me would be £40 a month which I found very reasonable, their system put my excel sheet to shame to be honest!

I have another demo booked with Dragon2000 (which I believe does the same thing) this afternoon but having spoken with a friend they will cost me £100+ per month.

Still think this whole MTD is ridiculous but you can only make the best out of the situation I suppose.

It would be nice to know what everyone else plans on doing.

 

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1 hour ago, justina3 said:

Thats the first phase there intentions are to roll it out to anyone paying HMRC tax what ever your legal entity but it will be a few years rolling out process. 

Another expense there putting on small businesses a lot of people use manual or excel to record there transactions HMRC will no longer be allowing you to enter your VAT submission via there old one to 9 box system from the start date you MUST have an accounts package that links with HMRC to submit your vat and tax returns via there on line portal. 

The word on the street is where they wish to end up HMRC can access your info without even leaving there offices as it will all be cloud base, this hasnt been mentioned yet but it is coming, by pushing every small business into an accounts package there one step closer, upon which time they no doubt will need less inspectors only smart ass computers to spot errors or patterns in accounting records, inspectors are very expensive and costly to train so it was an obvious move for them at some point. 

 

All very X files....   

 

Hi Justin....All very confusing for the old school who just send all their invoices and bank statements to their accountant every 3 months.You appear very switched on with MTD,I thought there would be more debate on this.

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Xero also have a bolt on module for the car market at a cost of £55 per month. 

The autosales system you quoted at £40pcm assumes you also have a sage package so that cost would have to be factored in. 

I sit here and shake my head at even more red tape thrown at the country business small and large, and cant help feel sorry for the IT dinosaurs out there. 

 

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Yes did speak to my accountant also uses Xero put he didn't believe I could operate my own accounting system. (He has Xero faith in me!! :) ).

Autosales systems also supply Sage at a one-off cost. Can't remember the exact cost but it was around the £100 mark, i'm waiting for an email with the exact pricing from them.

100% agree with you!! :(

 

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3 minutes ago, trade vet said:

Hi Justin....All very confusing for the old school who just send all their invoices and bank statements to their accountant every 3 months.You appear very switched on with MTD,I thought there would be more debate on this.

MTD has been a long time coming I do feel the accountants out there have been sitting on the info waiting for the flood gates to open from new or current clients not knowing which way is up or down, or that might be me being a tad cynical. 

I have been working on this for over a year as it is going to cause a massive problem in the building company, oddly enough even though we build new builds which are currently zero rated for vat as the company has a vat number and submits returns the builds have to be included which is causing us a huge legal headache with no answers forthcoming. 

A quick example when we started our latest project 9 units we received holding deposits within a month on all the plots now HMRC are classing them as sold just from the deposits, our stand point is that the deposits are just a fee to secure the slot to then negotiate the final build spec and costs which then goes to contract and finally exchange, two clients have walked away and since been replaced this we fully expected. 

On there new system we would be required to file tax return on 9 houses being sold even though 4 of them havent even had the foundations put in and costs have a massive variable due to the council having a brain cell or 100 short, so how can anyone compute a work in hand balance sheet on % built is a question no one can answer.

As you know i have an unusual connection with HMRC (sure she will love being called that) but even with that huge advantage it is still going to be carnage. 

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Justin....that sounds rediculous,I wonder how that works when calculating your year end results.I can now understand why my accountant was suggesting I should think about packing in altogether ! 

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"As you know i have an unusual connection with HMRC (sure she will love being called that) but even with that huge advantage it is still going to be carnage."

So if you get a letter saying you are about to get a thorough examination from a Vat inspector is that the equivalent of a "booty call"?

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