Daily takings

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A client of mine, who is a hairdresser, gives us a record of her daily takings which she then adds up at the end of the week. Can I input the total weekly amount instead of daily entries? I was under the impression that the tax should be recorded when the service is completed, not at the end of the week. I've had some people say you can't for MTD purposes... is that correct? 

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    Scalloway Castle
    By scalloway
    22nd Jun 2024 07:09

    As VAT is only reported once a quarter currently I don't see it making any difference how often it is entered into the books. What does matter is having a trail that goes from daily takings to bank deposits.

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    By SXGuy
    22nd Jun 2024 07:11

    Well, providing that week is within the vat quarter, what difference would it make?

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    VAT
    By Jason Croke
    22nd Jun 2024 10:39

    Section 3.5 has the force of law, a daily gross taking (DGT) should be used for MTD purposes.

    https://www.gov.uk/government/publications/vat-notice-70022-making-tax-d...

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    Replying to Jason Croke:
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    By Paul Crowley
    22nd Jun 2024 13:46

    That section is headed retail schemes.
    The only reason why HMRC would want daily recording is surely because they want to check the specific day that they made their test purchases.

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    Replying to Paul Crowley:
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    By rmillaree
    23rd Jun 2024 12:32

    "That section is headed retail schemes."

    yes - its reasonably likely the hairdresser may/will use a till - as such the need to enter every transaction (non retail) is replaced by the need to enter daily total. So i would agree 100% with Jasons comments

    "The only reason why HMRC would want daily recording is surely because they want to check the specific day that they made their test purchases."

    HMRC want every sale recorded unless you use retail scheme - the retail scheme is simply there to keep things sensible. the whole point here is that hmrc ideally want every sale listed -with till though they are happy with that info not being submitted.

    Practicably speaking i have never seen a vat officer care about the technicalities of mtd if the source data is available in suitable fasghion for a visit - that doesnt alter the fact the rules can be pretty onerous.

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    By FactChecker
    22nd Jun 2024 12:04

    "A client of mine, who is a hairdresser, gives us a record of her daily takings which she then adds up at the end of the week. Can I input the total weekly amount instead of daily entries?"

    If you are already being given her "daily takings" values, why would you even consider entering just the total weekly amount?
    It's hardly a measurable amount of effort (entering 6 more numbers once p.w.) - and it avoids having to calculate the split between quarters every 3 months.
    [I'm assuming (because it's not clear) that you only receive the 'daily takings' once p.w. - as entering a number every day would seem over the top and unnecessary!]

    Anyway, Jason has provided the reason that you *must* enter daily amounts ... assuming as we all are that your reference to MTD relates to VAT (not ITSA or whatever is threatened to be around the corner).

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    Replying to FactChecker:
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    By Paul Crowley
    22nd Jun 2024 13:53

    I may be out of date, but I had always understood that VAT could always be operated on the nearest complete week.
    13 weeks a quarter until we reach the odd 14 weeks every 5/6 years.

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    Replying to Paul Crowley:
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    By FactChecker
    22nd Jun 2024 16:17

    You may be right ... there are some odd rules/schemes out there, per https://library.croneri.co.uk/cch_uk/bvr/51-305

    I've not heard of a "nearest complete week" approach ... maybe Jason can comment?

    But either way, I suspect there's a difference between the rules of 'operating VAT' (in the sense of what's reported in which boxes, and when) ... and the rules that 'support' MTD for VAT (in terms of how/when the source data must be captured)?

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    Replying to FactChecker:
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    By Paul Crowley
    24th Jun 2024 08:42

    No different to Companies House. The accounts can be up to 7 days either way from the expected date and be accepted.
    We dealt with a service charge company with the expected date of say 23rd. But from year 1 the accounts were always prepared to say 25th.
    It took me two years to spot it. Setting such odd dates really is a bit daft.

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    Replying to Paul Crowley:
    Routemaster image
    By tom123
    25th Jun 2024 07:16

    Presumably to align with the quarter days?

    Which I always remember as:

    March 25th (5 letters in March)
    June 24th (4 letters in June)
    September 29th (9 letters in September)
    And Christmas eve.

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    By the_drookit_dug
    23rd Jun 2024 10:02

    Get her to provide the daily takings for each day in a digital format (eg CSV) - you could provide a template, even include an officescript or macro to automatically send it to you.

    From your end, if you capture the info in the CSV files digitally (such as using a macro to automatically read it in to an Excel sheet), and then write another macro which automatically creates a weekly journal and saves it in a suitable format (again eg CSV) for uploading to the accounts system, then I believe it would be MTD compliant as the links from Daily Takings through to the VAT return would all be digital.

    It would be easier though to just key the Daily Takings for each day into the accounts system.

    In the real world, I'd expect many businesses have non-digital links somewhere in their processes. Not strictly MTD compliant though.

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    Replying to the_drookit_dug:
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    By FactChecker
    23rd Jun 2024 15:16

    Determining the 'source' of data isn't as easy as it sounds (to Harra anyway).
    It's much like tracking the source of a river ... sounds easy until you find it's not one Spring but a host of seepages, some of which visibly flow whilst others just ooze through the earth at a pace slower than a snail. So which is the 'true origin'?

    But fortunately, as the legislation currently stands anyway, you don't have to do this for MTD.
    HMRC would indeed *like* you to .. determine the initial source of each item of data and then ensure that it somehow seamlessly moves (without any rekeying) through all your software until it reaches your submission file.
    But all that's actually *required* is that you (or any other human) doesn't directly key any numbers into the transmission file.

    So plenty of plaudits for anyone setting up all those templates & macros (possibly even with automated triggers to run each action without human intervention) - but it's not necessary merely to ensure that you're compliant.
    [You might to do these things because it makes life easier for you or to avoid keying errors - which were HMRC's original justifications - but it is not mandatory.]

    Not recommending it, but even the following would be compliant (for Retail):
    * daily phone-call to tell you the day's takings;
    * you key this into a simple spreadsheet (the 'books');
    * at the appropriate time you use one of the 'bridging' offerings (suitably pre-mapped to your spreadsheet) to extract the 'raw' data and submit it to HMRC.

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