Making Tax Digital

[Ken Figenus]

PurpleMoonlight said:

You don't need to pay £400 pa.

There are some free ones, but I like this best:

https://www.absoluteexcelvatfiler.co.uk/pages/abso...

Thanks for that. £40 is more like it - although I see they couldn't resist the pay forever model either!

Cheers - good to have options

[Mandat]

PurpleMoonlight said:

You don't need to pay £400 pa.

There are some free ones, but I like this best:

https://www.absoluteexcelvatfiler.co.uk/pages/abso...

I've had a look at the training video on their website, and it seems easy enough to use.

However, it seems that it doesn't transmit any of the underlying transaction data to HMRC (which I understood was the main driver for MTD), and it also seems to contradict the previous comments from Eric that spreadsheets will not be supported by MTD.

[plasticpig]

Mandat said:

I've had a look at the training video on their website, and it seems easy enough to use.

However, it seems that it doesn't transmit any of the underlying transaction data to HMRC (which I understood was the main driver for MTD), and it also seems to contradict the previous comments from Eric that spreadsheets will not be supported by MTD.

HMRC don't want the underlying transactional data and spreadsheets are fine:

HMRC said:

Functional compatible software is a software program, or set of software programs, products or applications, that must be able to:

record and preserve digital records (see paragraph 3.3)
provide to HMRC information and returns from data held in those digital records by using the API platform
receive information from HMRC via the API platform
HMRC expects that there will be software products available that will perform all of the functions listed above. Some software programs will not be able to perform all of these functions by themselves. For example, a spreadsheet or other software product that is capable of recording and preserving digital records may not be able to perform the other 2 functions listed above, but can still be a component of functional compatible software if it is used in conjunction with one or more programs that do perform those functions.

The complete set of digital records to meet Making Tax Digital requirements does not all have to be held in one place or in one program. Digital records can be kept in a range of compatible digital formats. Taken together, these form the digital records for the VAT registered entity.

See the MTD VAT Notice for more information.

[Eric Mc]

Mandat said:

and it also seems to contradict the previous comments from Eric that spreadsheets will not be supported by MTD.

HMRC only allow spreadsheet data that has been processed through bridging software. At one point they weren't going to allow spreadsheet data at all but did back down.

The British Chambers of Commerce have asked HMRC to defer MTD for VAT - but what do they know.

[K12beano]

Eric Mc said:

The British Chambers of Commerce have asked HMRC to defer MTD for VAT - but what do they know.

I admit I only keep ½ an eye out over MTD - it’s been talked about for so long, and I’m bored with it. We have the McExperts to look after us - especially round these parts anyway.


.....but part of me thinks: OFI.... JFDI... HMRC/gov - then we can all have a usual sort of purgatory period where it all goes wrong and people can run around shouting “I bloody told you - didn’t I say?” And others can run around going “No you never” just like in Kelly’s Heroes and we can all just prepare to get on with our lives as normal by about 2027......

[LeighW]

Lords call for delay in Making Tax Digital for VAT until 2020

But will HMRC listen?

[Eric Mc]

LeighW said:

Lords call for delay in Making Tax Digital for VAT until 2020

But will HMRC listen?

Déja vu all over again.

[PurpleMoonlight]

LeighW said:

Lords call for delay in Making Tax Digital for VAT until 2020

But will HMRC listen?

Hope so.

I'm delaying buying anything to the last minute just in case they do.

[LeighW]

PurpleMoonlight said:

Hope so.

I'm delaying buying anything to the last minute just in case they do.

Me too. I'm speaking to clients, and we will be offering clients without MTD compliant software a VAT filing service, but it is very annoying spending so much time on something that seems pointless.

[Eric Mc]

I may have to do that too - but it adds a huge amount of extra work on to my shoulders as well as substantially changing my letters of engagement for those cases - not to mention imposition on available time.

In other words, how much checking and verifying should I do before I submit VAT returns on my clients' behalf. In HMRC's eyes, I will be equally responsible for incorrect VAT returns as the client.

[So]

Eric Mc said:

In HMRC's eyes, I will be equally responsible for incorrect VAT returns as the client.

Personally I think you should be entirely responsible for accurate submissions, if your client has given you accurate input data.

[Eric Mc]

So said:

Eric Mc said:

In HMRC's eyes, I will be equally responsible for incorrect VAT returns as the client.

Personally I think you should be entirely responsible for accurate submissions, if your client has given you accurate input data.

That's the big "if". Normally, it would be expected that an accountant would check the data they have been sent by the client before onward submission to any third party. If an accountant has to take on loads of additional VAT return work simply so that his client can submit his VAT return (something he was happilly doing himself previously), then that will require a lot more time and effort from the accountant.

[So]

Eric Mc said:

So said:

Eric Mc said:

In HMRC's eyes, I will be equally responsible for incorrect VAT returns as the client.

Personally I think you should be entirely responsible for accurate submissions, if your client has given you accurate input data.

That's the big "if". Normally, it would be expected that an accountant would check the data they have been sent by the client before onward submission to any third party. If an accountant has to take on loads of additional VAT return work simply so that his client can submit his VAT return (something he was happilly doing himself previously), then that will require a lot more time and effort from the accountant.

Fine, but if an accountant is given accurate data and is tasked with submission of a VAT return it should be incumbent upon the accountant to ensure that the return is correct. Ditto stat accounts.

Regrettably this very often doesn't happen. Twice, chartered accountants have submitted significantly incorrect VAT returns for companies I have owned. On one occasion it cost us a fine. The second time, at the start of the GFC, it cost us the company (and me a six-figure sum). I cannot recall the specific legal advice, but it was along the lines of "you're responsible for your accountants fk-ups".

[LeighW]

So said:

... if an accountant is given accurate data and is tasked with submission of a VAT return it should be incumbent upon the accountant to ensure that the return is correct. Ditto stat accounts.

Surely this goes without saying? If I (or someone at my firm) made an error like that, I would fully expect to be sued, and rightly so.

[So]

LeighW said:

So said:

... if an accountant is given accurate data and is tasked with submission of a VAT return it should be incumbent upon the accountant to ensure that the return is correct. Ditto stat accounts.

Surely this goes without saying? If I (or someone at my firm) made an error like that, I would fully expect to be sued, and rightly so.

Someone qualified will, I am sure, comment. But as far as I recall it used to be the case that YOU were responsible for figures prepared on YOUR BEHALF by an accountant. Certainly that seemed to be the main thrust of HMRC's line with us.

[Rovinghawk]

PurpleMoonlight said:

LeighW said:

Lords call for delay in Making Tax Digital for VAT until 2020

But will HMRC listen?

Hope so.

I'm delaying buying anything to the last minute just in case they do.

I've already sent in the forms for VAT deregistration & will be reducing my work to be well under the threshold.

[Eric Mc]

So said:

Fine, but if an accountant is given accurate data and is tasked with submission of a VAT return it should be incumbent upon the accountant to ensure that the return is correct.

You don't need to tell me what accountants should do. I've been doing all those things for over 40 years. Of course it's incumbent on the accountant to ensure that any return they are submitting on behalf of a client is correct. I know all that.

The problem with VAT MTD is that many clients who currently submit their own returns will now be asking their accountants to submit them on their behalf. If that is what transpires, the accountants will HAVE to spend quite a bit of time checking the accuracy of the book-keeping data they have been given before they can make the submission. This will be a NEW service being provided by the accountant and they will have to charge for it. It's ascertaining if the data given by the client is accurate that is time consuming - and expensive for the client. The accountant should not assume that what they have been given is accurate.

In my situation, I only currently submit a very small number of VAT returns for clients. It's something I would prefer not to do. The vast bulk of them do their own returns - and I would prefer if it stayed that way.

[PurpleMoonlight]

Eric Mc said:

You don't need to tell me what accountants should do. I've been doing all those things for over 40 years. Of course it's incumbent on the accountant to ensure that any return they are submitting on behalf of a client is correct. I know all that.

The problem with VAT MTD is that many clients who currently submit their own returns will now be asking their accountants to submit them on their behalf. If that is what transpires, the accountants will HAVE to spend quite a bit of time checking the accuracy of the book-keeping data they have been given before they can make the submission. This will be a NEW service being provided by the accountant and they will have to charge for it. It's ascertaining if the data given by the client is accurate that is time consuming - and expensive for the client. The accountant should not assume that what they have been given is accurate.

In my situation, I only currently submit a very small number of VAT returns for clients. It's something I would prefer not to do. The vast bulk of them do their own returns - and I would prefer if it stayed that way.

Do they realise that they can buy access to a system for £40 pa that will let them copy/paste the totals from an excel spreadsheet?

[Eric Mc]

So said:

Someone qualified will, I am sure, comment. But as far as I recall it used to be the case that YOU were responsible for figures prepared on YOUR BEHALF by an accountant. Certainly that seemed to be the main thrust of HMRC's line with us.

Up until very recently, the tax payer and/or directors of limited companies always had prime responsibility for the accuracy (or otherwise) of the data returned to HMRC. In the past couple of years, accountants and other tax agents are now equally liable for what is submitted.

[So]

Eric Mc said:

So said:

Someone qualified will, I am sure, comment. But as far as I recall it used to be the case that YOU were responsible for figures prepared on YOUR BEHALF by an accountant. Certainly that seemed to be the main thrust of HMRC's line with us.

Up until very recently, the tax payer and/or directors of limited companies always had prime responsibility for the accuracy (or otherwise) of the data returned to HMRC. In the past couple of years, accountants and other tax agents are now equally liable for what is submitted.

Jolly good. Perhaps we will have a better experience going forwards.