With the soft landing period coming to an end very soon businesses will be required to have digital links from the initial capture of the digital sales data. https://www.gov.uk/government/publications/vat-notice-70022-making-tax-d...
This statement seems extremely vague and the examples HMRC have provided appear to have completely missed the mark in my opinion.
Notice 700/22 says the following are a list of digital links that are acceptable:
"emailing a spreadsheet containing digital records so the information can be imported into another software product
transferring a set of digital records onto a portable device (for example, a pen drive, memory stick, flash drive) and physically giving this to someone else who then imports that data into their software
XML, CSV import and export, and download and upload of files
automated data transfer
This list is not exhaustive.
HMRC does not consider the use of ‘cut and paste’ or ‘copy and paste’ to select and move information, either within a software program or between software programs, to be a digital link."
As data can not be copied and pasted does this mean that we are not able to edit data to be in a suitable format to import to another software? Typically if a sales system does not have direct intigration with an accounting software you would need to put the data in to a preset format to import. Does saying things can not be copied and pasted also apply to inputting data to your bridging software i.e. posting to an accounting system like Xero must be done hands free?
It also says that data must be imported or use automated data transfer does this mean if a client were to send an invoice via email (digital link) I would then not be able to manually enter this invoice to an accounting system (also bridging) like Xero as this would break the digital link?
Moving on to an actual example.
Say there is a client with high sales volume 2-4k transactions per month through an online presence all being recorded through Magento. The individual uses Xero as an accounting solution.
In this instance would you be able to pull the sales reports from Magento include formula to sum the relevant totals this could then be formula'd in to a format that would allow for an import of 1 journal to Xero for the sales for a given period month quarter. Although in the accounting system / bridging software you only have 1 transaction the full dataset is maintained in the excel sheet which can be attached. Would this be sufficient? Alternately would have to use something like datadear to import each individual transaction which would be an extremely time consuming task, is this what is required?
Say you have a client that typically provides daily taking totals for their sales for example a hair dresser, pub ect. Say they enter this as daily totals on to a spreadsheet creating the digital records. Say this client uses again Xero however any accounting software would be the same.
In this situation would I be able to enter weekly totals as a sales journal attaching the weekly takings schedules that have a daily breakdown? Two points concern me here I have are
1. For clients making retail sales that have a requirement to keep records of daily sales per 4.5 on 700/22. Does this mean these records need to be detailed in full on the VAT return / bridging software or would a single line referencing the spreadsheet with daily information be sufficient?
2. Does manually entering the totals of a spreadsheet to a bridging software constitute a break in the digital chain? If so can I work around by formulating in to the correct format - don’t see what the point of this would be but it is possible just seems like meaningless hoops to jump through.
Would appreciate any insight / opinions held, thank you in advance!