For UK users: Will gnucash get ready for Making Tax, Digital ?

Mon Jul 31 15:13:48 EDT 2017

This reminds me of an earlier question from a user in Sweden.
Apparently governments (Sweden in that case, the UK in this one) are
getting into the habit of specifying not only acceptable tax software
but also accounting software.  The UK has not yet required businesses
of a certain size to use specifically approved tax or accounting
software (have they?), but it seems that Making Tax Digital might lead
there.

But who knows.  I'm averse to having information stored in a digital
format on government servers because it will eventually be hacked,
stolen, or otherwise used for something other than the original and
limited intention (you can pick your favourite bogeyman here; your own
government, the Russians, the Chinese, cyber criminals, etc.)   In a
better world, when HMRC (or the IRS, or the Australia Tax Office)
requires something, it should provide the software to do it, free.  It
appears that in the UK you won't have a choice after 2018.

Thompson Reuters already makes MTD software, or close to it:

https://www.digita.com/pro/making-tax-digital/what-is-making-tax-digital.aspx

Why not ask (and suggest!) HMRC and the MTD office if they will be
paying for the cost of the compliance software?  Users could deduct
the cost of the software from their VAT payments (quarterly?  It's not
clear to me).  And it would be great if the MTD software worked with
gnucash .txf imports.  You can do a lot to customise the txf exports
from gnucash.  Compliance software might already be "write off" (it's
been a while since I looked at the UK regs), but much nicer if paid
for by HMRC up front.

I would worry about keeping "electronic records on transaction basis",
but that's a larger discussion.  It will likely be introduced as a way
to reduce reporting errors, but like FACTA in the US, it will be used
in a way to penalise the vast majority of law abiding citizens and
firms in order to try to dig up criminal activity.

FOSS doesn't work for the reasons Buddha Buck outlined, and more.  It
would be great if someone volunteered to work on a txf export template
for MTD.  Beyond that, I'm not sure how the devs would "hard wire" MTD
(or other jurisdiction specific) features into gnucash that would meet
the requirements of the Swedish or UK governments.  That sounds like a
lot of extra effort even if it were possible.  I think Alain has it
right, and perhaps its easiest to use the txf export from gnucash to
import to another program.

You might be stuck with using gnucash for the bookkeeping, and then
digita for the reporting.  I agree that is "sub optimal", but that
describes tax compliance in most jurisdictions.  Out of curiosity, who
wants MTD?  Is it mostly HMRC and large firms which can easily comply
with new regs to the disadvantage of their smaller competitors?
Sounds like the EU (or the US) to me.  You can like or dislike Brexit,
but one thing it does is give UK citizens more say over their own
governance.  If MTD has been delayed because of Brexit, that's
probably good; the government should be devoting its energies on
something like a Swiss solution to synchronise UK regs with both WTO
and the EU.  MTD seems a lesser priority (but I do agree with you that
the snap general election was a dumb idea).  Sorry you have to put up
with it.

Gordon

On Fri, Jul 28, 2017 at 4:01 AM, Geert Janssens
<geert.gnucash at kobaltwit.be> wrote:
> A shared library would even better imo. Similar to what aqbanking does for online bank communications.
>
> That would allow for easier integration with gnucash and even other open source applications that wish to interact with HMRC.
>
> Regards,
> Geert
>
> Alain Williams <addw at phcomp.co.uk> schreef op 27 juli 2017 11:01:10 CEST:
>>On Thu, Jul 27, 2017 at 12:52:41AM +0000, Buddha Buck wrote:
>>
>>> GnuCash does not currently (to my knowledge) support any
>>> jurisdiction-specify tax policy or reporting requirements. To do so
>>for one
>>> would imply that it should do so for all, and that is a maintenance
>>> nightmare. As such, I think it more likely that someone would write a
>>> program that can take reports or data that GnuCash can already
>>generate
>>> (CSV exports? OFX exports?) and uploads the necessary info to HMRC.
>>
>>A small program that takes a well defined import and can talk the HMRC
>>Making
>>Tax Difficult protocol might be the best way forwards; similar programs
>>could
>>then also be written to talk to the tax people in other countries -
>>without
>>cluttering up the core of Gnucash.
>>
>>I am not sure, however, if this would be enough to keep HMRC happy -
>>they seem
>>to want verification of the whole accounts program ... I am talking
>>about a
>>standalone shim/add-on.
>>
>>I know many companies that have their own accounts s/ware, written over
>>many
>>years that does just what they need. MTD could cause huge problems if
>>there is a
>>lot of effort in getting these certified or if the companies need to
>>change to
>>use an off-the-shelf/bought-in package.
>>
>>I don't think that HMRC have thought about it from anything other than
>>their own perspective.
>>
>>On Wed, Jul 26, 2017 at 08:03:45PM -0700, John Ralls wrote:
>>
>>> GnuCash can generate TXF files that certain US and German tax prep
>>software can support. Alex Aycinena maintains the former and Christian
>>Stimming the latter, but Christian has had real life intervene and
>>doesn’t at present have time to contribute code to GnuCash so I suspect
>>that the German version is out of date.
>>>
>>> If anyone else would like to contribute a similar report for their
>>country we’ll be happy to add it to the distribution, but one should
>>bear in mind that doing so is a commitment to maintain it with
>>typically annual updates.
>>>
>>> That applies to MTD as well: Of our current regular contributors only
>>Mike Evans is British; if he’s not motivated to develop the support
>>someone else from the UK will have to step up or it won’t happen.
>>
>>I would be willing to help here.
>>
>>However: I know nothing about Gnucash, neither as a developer nor a
>>user. My own
>>small business accounts are essentially manual; if it were not for MTD
>>I would
>>not see any benefit in changing this - so I want what will be least
>>effort to
>>keep HMRC off my back.
>>
>>--
>>Alain Williams
>>Linux/GNU Consultant - Mail systems, Web sites, Networking, Programmer,
>>IT Lecturer.
>>+44 (0) 787 668 0256  http://www.phcomp.co.uk/
>>Parliament Hill Computers Ltd. Registration Information:
>>http://www.phcomp.co.uk/contact.php
>>#include <std_disclaimer.h>
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> Sent from my smartphone. Please excuse my brevity.
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