[GNC] Making Tax Digital (MTD) for Tax Self-Assessment

[Maf. King]

Hi Mark & Neil.

thanks for highlighting the github repository - looks interesting, I might 
have a play next month..  I've been using a commercial bridgeing spreadsheet 
so far for VAT submission of data from GC, I rather anticipate that the next 
step (which, AIUI, is not for Corp Tax (yet)) for the self-assessment pages 
will allow similar spreadsheet manipulation and submission.  It seems to me 
that they are targetting smaller one-man-band type businesses via the personal 
tax return.


the direction of travel is clear, though!  Digital APIs wherever possible, and 
remove a different sort of digit-al mistake - the fat fingered kind!

regards,
Maf


On Wednesday, 28 July 2021 12:48:36 BST Neil Campbell wrote:
> Hi Mark
> 
> Thank you for all that background information which I found to be very
> informative. I hear, and agree with, you about the complexity of UK
> Taxation system and the practicality of this, but do wonder how the
> software developers mentioned on HMRC website got MTD status. I expect all
> they did was to get submission of the unadulterated records without year
> end adjustments etc linked to HMRC via their API. I was not aware of the
> HMRC motives, so that was interesting. From what you have said, it may be
> correct to say that the existing P&L Report would be OK for this automatic
> return. It would just need to be integrated with the HMRC system using
> their API. But I am not a programmer, so I couldn’t do this.
> 
> I have put in an enhancement request for this change and will see what
> happens next. Thank you for your enlightenment.
> 
> Regards.
> Neil
> neilcamp65 at gmail.com
> 
> > On 28 Jul 2021, at 12:24, Mark <alien.technology at gmail.com> wrote:
> > 
> > Hi Neil,
> > 
> > From what I understand, HMRC's stated aim for Making Tax Digital is to
> > reduce errors which cost the government tax money. The general approach
> > consists of (my interpretation): - Making APIs which make it easier for
> > the right information to be submitted. - Requiring that software
> > developers that implement the APIs do so by creating submissions straight
> > out of the raw accounts.  Thus, there is no way for the end user to
> > manipulate the submission data; the data will be accurate (if the
> > accounts are right) and it's harder to defraud the system.
> > 
> > I got to see inside the MTD process as I've implemented the MTD VAT
> > interface for my businesses, taking the account data out of GnuCash. In
> > order to get this approved for production use, I had an interview with an
> > HMRC engineer, shared my screen and showed the solution at work. It was
> > relatively painless, but the interviewer wanted to check that the general
> > approach was right, that there was a legal submission containing required
> > text, and that there was no way for the end user to change the submitted
> > data (other than by editing the accounts).  I shared the code on GitHub,
> > Google for gnucash-uk-vat if anyone is interested.
> > 
> > I would expect that MTD for Corporation Tax submission is going to be
> > along the same lines i.e. a requirement that the corporation tax return
> > is automatically derived from accounting records.  I wonder how that will
> > work in reality: VAT accounting is relatively straightforward - the same
> > accounting approach works in lots of different countries. Corporation Tax
> > is a whole different kettle of fish - there are arcane rules specific to
> > the UK: Depreciation, two ways for getting R&D relief, and the way
> > profit/loss is shifted between tax years to name a few.
> > 
> > Mark.
> > 
> > > From April 2023, new laws in UK will require all businesses with a gross
> > > income of in excess of £10,000 to keep digital records for Tax returns.
> > > I think that there are already laws in place for record-keeping and
> > > submitting VAT digitally direct to HMRC. I am sure that there must be
> > > thousands of GNUCash users who will be affected.
> > > 
> > > This may seem a long way away, but can one of the developers please
> > > confirm that GNUCash either complies already (I can’t find anything in
> > > the Menu’s that relates to VAT or the collection thereof) or the matter
> > > is in hand and GNUCash will comply before April 2023.
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