Making tax digital

[Eric Mc]

The whole point about VAT MTD is that HMRC really want more than just quarterly totals.

[wombleh]

I just moved my accounting onto an online platform partly for this MTD stuff but also to be able to do more as I go rather than once a month. So far the phone app is too limited to be much use, still need the spreadsheets to check things and it buggered up the first VAT return as I'd marked a lot of stuff as 0% rather than N/A. Not exactly off to a running start but hopefully will get better when I'm more familiar with the software, probably in time for the company to go bust and I'll have to swap to another accounting platform that works completely differently.

People who run small businesses and aren't IT savvy are going to have a complete nightmare with this.

[markcoznottz]

snuffy said:

Terminator X said:

snuffy said:

Then, for example, 3 months ago, I wanted to leave their flat rate scheme because at 16.5% now you will actually lose money. And how does the oh-so-up-to-date HMRC allow you to change back to normal VAT ? By email ? Nope. Online, via your VAT account ? Nope. Oh yes, you can only send them a letter. And long did it takes them to acknowledge my letter ? 2 months !!

I did the same and they never even acknowledged the letter; I just started to log it differently and further they've said nothing since.

TX.

That's what I would have done as well, even if they'd not bothered to reply.

The thing that amazes me is that flat rate VAT was introduced in 2002 but HMRC could not even be arsed to update their webform. So you just had to fiddle the boxes to fit (and they even gave you the instructions on what to put in each box because it was too much like hard work for them to produce a flat rate webform).17 years and the lazy bds could not update a simple form on a webpage.

There's no career progression for individuals who point out problems with the infrastructure, that would get you labelled a troublemaker.

[plasticpig]

snuffy said:

Yep, its' just an approved spreadsheet that submits exactly the same data as you do on their website (by typing the numbers in) but in a format their new portal understands. So with the spreadsheet bridging software you are just paying a third party to submit your return on your behalf.

Can you tell my piss is boiling with all this MTD bks ?

Quite a few posters here including yourself are entirely missing the point of MTD. The change in method of submission is just a small part of the changes. The main change is it is now a legal requirement to keep digital records that form the basis of the return you are making. You are actually breaking the law if you type the Box 1 to 9 numbers into a spreadsheet and use that as a basis of submission because that is not a digital link.

[Eric Mc]

Precisely.

The ability to use "bridging software" is purely an interim concession to get the ball rolling. They announced that this concession would end in April 2020 - although I have a funny feeling it may be extended - perhaps by quite a few years.

[plasticpig]

Eric Mc said:

Precisely.

The ability to use "bridging software" is purely an interim concession to get the ball rolling. They announced that this concession would end in April 2020 - although I have a funny feeling it may be extended - perhaps by quite a few years.

HMRC have posted no time limit on bridging software. What they have said is for the first year they will allow cut and paste from one from one software package to bridging software. If someone already maintains as sales / purchase day book in Excel then they are already complying with most of the digital record keeping aspect.

[Eric Mc]

plasticpig said:

HMRC have posted no time limit on bridging software. What they have said is for the first year they will allow cut and paste from one from one software package to bridging software. If someone already maintains as sales / purchase day book in Excel then they are already complying with most of the digital record keeping aspect.

They are making up their definition of "digital" record keeping as they go along. Originally they had stated that spreadsheet records did not count as "digital" records. Now they do - “for the time being” – which sounds rather ominous, don’t you think.
Indeed, that is what I was getting at. They are adjusting the playing field as and when they feel like.

It's about time they realised the utter balls-up this whole enterprise is and call it a day.

[wombleh]

markcoznottz said:

There's no career progression for individuals who point out problems with the infrastructure, that would get you labelled a troublemaker.

For all their faults as a customer, I've worked there in the past on Aspire and didn't have that impression of HMRC. People sorting out problems was common because internally that was how they generate promotions (and at higher level OBEs), while externally the outsource partners would propose fixes/improvements because solving problems generated income for them. I suspect that fixing that flat rate leaving postal process is way down the list of priorities because it's not widely used and it works today, albeit clunky. It's a massive legacy organisation so has quite a list of things to fix!

[sgrimshaw]

Just had an email from Tax Calc, who I've used for countless years for doing the partnership and the partners tax returns.

They now have a bridging solution, which starts at £20 (for a single buisiness)

https://www.taxcalc.com/businessVAT?utm_source=Pur...

If it's anything like their Tax software it'll be quick and easy to use.

[PurpleMoonlight]

That looks good, thanks for the head up.

[The Ferret]

Eric Mc said:

It's about time they realised the utter balls-up this whole enterprise is and call it a day.

I completely agree Eric, but we both know they won't as this is just the start of things to come. Eventually you'll be submitting monthly management accounts via MTD, and paying corporation tax in the same way you do PAYE/NI. For me that's the end goal for HMRC. While it won't make them any more money, it will bring forward the receipt of tax on profits that otherwise might not be seen for well over a year, as much as 21 months.

I've no problem with that per se, it's everything that goes with it. The fact it will force thousands of companies not paying for (and not needing) software to do so in future. The fact we've all go enough on our plates trying to fathom out what might happen once the government finally sorts out which way things are going with Brexit. The fact they are expecting companies to do it in such short timescales.

I've just been speaking to a fellow contractor who pretty much ready to throw the towel in as a result. His business needs an upgrade to its current software as the version they are running won't support the MTD module the provider is offering. That'll be a couple of days consultancy at the thick end of £1k per day. Then he's being asked to pay annual fees for the new module he doesn't even want. It's just a big scam. If he decides to call it a day (which it looks like he will) it'll put a small number of decent people out of jobs - and take a decent little company out of the market. I guess HMRC don't really care about the impact they're having though, as long as they eventually get the ability to scrutinise peoples data in a little more detail all is well for them (apart from the small thing they forget, nobody works there any more so there won't be anyone to do the scrutinising)

It's an utter joke, and been managed completely inappropriately.

Rant over

[sbk1972]

Ok, pretty late the party but I am also an IT contractor, 25years, using excel, currently do my own VAT returns online.

So, reading the above I now need to download some software to then upload my VAT return ? Correct ? I have a VAT return for Dec 2018, and then Apr 2019, so I need this stuff ready for April 2019.

Now reading the above am I right in assuming my old excel workbook, where VAT is worked out via forumlas etc, is now deemed illegal ?

Do I now need to buy / subscribed to some digital software ? By this Im assuming this will require me to entry expenses, inputs / outputs, invoices ? etc ? does it link to bank accounts ?

Can I not just continue with excel, but this VAT software and hey presto ?

HRMC !!!!!

[plasticpig]

sbk1972 said:

Ok, pretty late the party but I am also an IT contractor, 25years, using excel, currently do my own VAT returns online.

So, reading the above I now need to download some software to then upload my VAT return ? Correct ? I have a VAT return for Dec 2018, and then Apr 2019, so I need this stuff ready for April 2019.

Now reading the above am I right in assuming my old excel workbook, where VAT is worked out via forumlas etc, is now deemed illegal ?

Do I now need to buy / subscribed to some digital software ? By this Im assuming this will require me to entry expenses, inputs / outputs, invoices ? etc ? does it link to bank accounts ?

Can I not just continue with excel, but this VAT software and hey presto ?

HRMC !!!!!

You can use your existing Excel workbook with no problems. All you need to do is have sheet and populate cells with box 1 to 9 for the VAT return. You can use bridging software to send this data to HMRC. This is a screenshot of the demo I did for our product for HMRC which they were fine with.

|https://thumbsnap.com/WoyCu3p3[/url]


ETA. Hmm forum dosen't scale the image very well: https://ibb.co/t8ptCkr

Edited by plasticpig on Thursday 10th January 17:42

[wombleh]

I just had to do mine today and discovered accountant had registered me for the mtd pilot. Was fairly simple but it struck me that having to make manual adjustments will be a nightmare as the return gets generated based on previous quarter and the software I use has no obvious way to override those fields, which would make sense based on description of where mtd is going above.

So that'll be a day lost on the phone to hmrc or the software vendor in future, rather than doing the job I actually started the company to do. Seems to be getting ever more painful and expensive to run a company in this country.

[johnhemming]

Eric Mc said:

Precisely.
The ability to use "bridging software" is purely an interim concession to get the ball rolling. They announced that this concession would end in April 2020 - although I have a funny feeling it may be extended - perhaps by quite a few years.

They have not time limited bridging software. They have said that you need to have digital links by April 2020 which can be done with a spreadsheet.

[johnhemming]

HMRC provide a list of possible suppliers:
https://www.gov.uk/guidance/software-for-sending-i...

Most of the bridging suppliers (from a spreadsheet to MTD) offer a free introductory option.

[rival38]

My small business, like many others has run very properly on Excel workbooks for 15+ years. I did look at Xero late last year on the recommendation of my accountant. Despite its claims to be simple I did not get very far.

Our accountant is going to set it up for us (inc bank feeds) and will run it remotely for us using our monthly spreadsheets and supporting paperwork (invoices etc) to populate the required fields for a quarter or two while we get to grips with it. We will have our VAT returns in a submit-able format and HMRC will be happy.

In time I am assured we will be able to get a number of insightful reports from it. Meanwhile it is expected to be only marginally more expensive in accounting time than our current system - because a lot of the leg work they do to produce our year end accounts will already be in Xero and easy to extract.

Anybody else doing similar?

[Dixy]

I to went Xero at my accountants suggestion. It ads nothing to the party, costs money and is a pain as you have to jump through hoops in its order.
HMRC have introduced a new sign in for submitting digitally, there is an online video that shows you step by step how to sign up. Unfortunately there actual website bears no resemblance.

[akirk]

It has been an interesting experience...

we signed up for the pilot
then signed up for the API

we wrote the code for our internal system to talk to their API and submit the figures digitally...
all went well and their digital team were fantastic in supporting the process...
they then had a conference call with us to see a test of our system before putting our 'app' live on their API

we then tried to submit last QTR's figures digitally only to find that our sign up for the pilot hadn't gone through!

so we will re-sign up in the next week or so and test again at the end of March

considering that we took the more complex route of writing our own link to the API - actually it is a very straightforward process - the software basically has steps for authorisation / gaining a valid token / checking which period is open (what obligations there are) / submitting the relevant figures / getting a confirmation reply

in reality - neat simple software with really good support from the relevant team - an approach more akin to a modern tech company, not HMRC - so to be applauded... I appreciate that there is a valid debate around whether it should happen or not (I think that it is inevitable that all accounting will go fully digital at some point) - but the actual implementation has been good as far as we can see...

[plasticpig]

akirk said:

It has been an interesting experience...


in reality - neat simple software with really good support from the relevant team - an approach more akin to a modern tech company, not HMRC - so to be applauded... I appreciate that there is a valid debate around whether it should happen or not (I think that it is inevitable that all accounting will go fully digital at some point) - but the actual implementation has been good as far as we can see...

The main issue we had is the sandbox API is stateless. Not a major problem when you are doing a single submission for a single company. It's very difficult to test an agent with a multiple submission scenario. We ended up writing our own API simulation which filled in some of the missing bits.