MTD VAT

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Discussion

Dixy

Original Poster:

2,915 posts

204 months

Friday 2nd February 2018
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Having booted MTD into the long grass I am led to believe if you are VAT registered returns must be done through MTD software from April 2019.

Anyone care to comment.

Eric Mc

121,785 posts

264 months

Friday 2nd February 2018
quotequote all
Yes and no.

If you are VAT Registered AND also trading above the compulsory VAT registration turnover threshold of (currently) £85,000, then it is intended that you will have to switch to MTD for VAT in April 2019.

If you are VAT registered but trading BELOW the compulsory threshold (there are quite a few smaller traders in this situation), then you can remain on the "normal" VAT filing system as it currently operates after April 2019.

After April 2019, if you are in the latter position and you go above the compulsory threshold, you must switch to MTD for VAT. If you then drop back below the threshold, you CANNOT return to the old system.

There is current speculation that the VAT registration threshold is going to be seriously slashed - but not until at least 2020. I would expect that the new threshold will be under £50,000.

Clockwork Cupcake

74,404 posts

271 months

Thursday 22nd February 2018
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My accountants have just emailed me telling me I should be planning for MTD, and wanting me to sign up to FreeAgent for £15+VAT per month.

Seems a ridiculous amount of money for something that doesn't give me any real benefit, and does my accountants' job mostly for them.

By contrast, a subscription to Microsoft Office 365 Business Premium is less than £10 + VAT per month.

(No, I know that Office doesn't do accounting, but I'm just mentioning it in the context of price for subscription software)

PurpleMoonlight

22,362 posts

156 months

Friday 23rd February 2018
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Do we know what the specific reporting requirements will be yet?

Eric Mc

121,785 posts

264 months

Friday 23rd February 2018
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Not in full detail yet.

It's obviously initially supposed to capture the quarterly totals that are normally submitted in VAT returns. But the REAL desire of HMRC for MTD is that it will also capture all the underlying individual transactions that make up the totals as well. In other words, your entire book-keeping and accounting records.

There is a voluntary pilot running at the moment so the full implementation will happen following the results of the pilot.

PurpleMoonlight

22,362 posts

156 months

Friday 23rd February 2018
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Thanks Eric.


Eric Mc

121,785 posts

264 months

Friday 23rd February 2018
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The costs quoted above are interesting. HMRC claimed that smaller businesses would only need to pay a one off charge of around £200 to "get on board" for MTD.

That was always a load of old bo***x.

In fact, they even claimed that some software companies would provide MTD compatible systems for nothing.

PurpleMoonlight

22,362 posts

156 months

Friday 23rd February 2018
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Well I will have to buy software from someone as I use excel spreadsheets and complete the quarterly return manually.

Pity HMRC are not providing free basic software they way they do for PAYE. I say pity, I really mean shame on them.

Clockwork Cupcake

74,404 posts

271 months

Friday 23rd February 2018
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PurpleMoonlight said:
Well I will have to buy software from someone as I use excel spreadsheets and complete the quarterly return manually.

Pity HMRC are not providing free basic software they way they do for PAYE. I say pity, I really mean shame on them.
I agree. Same here.

The spreadsheet my accountant provides is so clever these days that it's pretty much a basic accounting package and calculates the VAT return for you. So basically they are effectively hiking their fees by £15+VAT per month as it gives me absolutely nothing over what I already have.

As for Eric pointing out that ultimately HMRC want to be able to pore over your electronic accounts in minute detail whenever they want - that's rather a scary thought.

Eric Mc

121,785 posts

264 months

Tuesday 16th April 2019
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Listening to an HMRC Webinar at the moment on MTD VAT for agents (i.e. bookkeepers and accountants submitting VAT returns on behalf of their clients.

All I can say is, what a mess.

All agents who intend to submit MTD VAT returns for their clients will need a completely new set of logins/passwords/IDs/codes etc to be able to set themselves up to do this. The old credentials that agents may have used for VAT/Self Assessment etc will no longer be valid -

except they WILL be valid for -

a) those who will be allowed to submit VAT the "old fashioned way"
b) Self Assessment
c) Corporation Tax
d) CIS

Therefore, for many years, agents will need to use TWO completely separate sets of log-ins etc to handle the tax affairs of their clients.

Not to mention that the webinar itself ran into all sorts of sound problems etc. Doesn't give me a huge amount of confidence in HMRC IT.

Squiddly Diddly

22,362 posts

156 months

Tuesday 16th April 2019
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Did you ever have it?

I didn't.

Eric Mc

121,785 posts

264 months

Tuesday 16th April 2019
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Have what?

And then she

4,399 posts

124 months

Tuesday 16th April 2019
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Eric Mc said:
Listening to an HMRC Webinar at the moment on MTD VAT for agents (i.e. bookkeepers and accountants submitting VAT returns on behalf of their clients.

All I can say is, what a mess.

All agents who intend to submit MTD VAT returns for their clients will need a completely new set of logins/passwords/IDs/codes etc to be able to set themselves up to do this. The old credentials that agents may have used for VAT/Self Assessment etc will no longer be valid -

except they WILL be valid for -

a) those who will be allowed to submit VAT the "old fashioned way"
b) Self Assessment
c) Corporation Tax
d) CIS

Therefore, for many years, agents will need to use TWO completely separate sets of log-ins etc to handle the tax affairs of their clients.

Not to mention that the webinar itself ran into all sorts of sound problems etc. Doesn't give me a huge amount of confidence in HMRC IT.
I skipped this one today because Oh My God HMRC Webinars Are Dull.

Thankfully our (in-house) first MTD VAT return is for p/e 29 February 2020, so I've a little while yet.

Michaelbailey

651 posts

105 months

Tuesday 16th April 2019
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If people wish to continue using excel I would suggest using a bridging software which converts the excel into an MTD friendly format. Much cheaper than getting onto free agent, xero, sage one etc. Think we found one which is £30 per annum

Dixy

Original Poster:

2,915 posts

204 months

Tuesday 16th April 2019
quotequote all
I gave in, took my accountants advice, changed to Xero and have submitted 2 returns (I am a repayment trader so do monthly returns), seems to be working ok so far.
Getting the system set up was a nightmare as the HMRC end kept timing out but would neither let me start again or go back where I was. I did this as part of the beta test, how they will cope when thousands try to sign in is any ones guess.

Clockwork Cupcake

74,404 posts

271 months

Tuesday 16th April 2019
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Eric Mc said:
Have what?
a huge amount of confidence in HMRC IT

Clockwork Cupcake

74,404 posts

271 months

Tuesday 16th April 2019
quotequote all
Michaelbailey said:
If people wish to continue using excel I would suggest using a bridging software which converts the excel into an MTD friendly format. Much cheaper than getting onto free agent, xero, sage one etc. Think we found one which is £30 per annum
Worth knowing. Still extra money for absolutely no benefit though.

I'm going to resist it for as long as possible. I'm pretty sure my company turnover is less than £85,000 so I will be applying for exemption (or, rather, a stay of execution).

I think the whole thing is ridiculous for small businesses like mine. Extra expense for no benefit.

If HMRC want the data in a certain format then it should be up to them to provide the software, rather than throwing everyone to the capitalist wolves (sorry, I mean the free market).


Edited by Clockwork Cupcake on Tuesday 16th April 16:51

Eric Mc

121,785 posts

264 months

Tuesday 16th April 2019
quotequote all
Clockwork Cupcake said:
Worth knowing. Still extra money for absolutely no benefit though.

I'm going to resist it for as long as possible. I'm pretty sure my company turnover is less than £85,000 so I will be applying for exemption (or, rather, a stay of execution).

I think the whole thing is ridiculous for small businesses mine. Extra expense for no benefit.

If HMRC want the data in a certain format then it should be up to them to provide the software, rather than throwing everyone to the capitalist wolves (sorry, I mean the free market).
As long as your 12 monthly turnover remains below £85,000 you do not have to apply for anything. Just continue to submit your VAT returns the old fashioned way.

Clockwork Cupcake

74,404 posts

271 months

Tuesday 16th April 2019
quotequote all
Eric Mc said:
As long as your 12 monthly turnover remains below £85,000 you do not have to apply for anything. Just continue to submit your VAT returns the old fashioned way.
Thanks for the clarification, Eric. thumbup


Ken Figenus

5,680 posts

116 months

Friday 19th April 2019
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Can anyone recommend a bridging software for Excel please - or any templates out there that have this in already?

I have succumbed to accountants basic castrated Xero recommendation and I hate it, and its cost. Its so hard to use and wont even let me reconcile entries without filling in fields that I have no idea what to put in there. Doesn't even seem to update the bank info ongoing - despite a gazillion emails and phone support to get that working (ohh and an extra cost). Hate it!