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Help with multi businesses and MTD

Client with several businsesses, one VAT number, using Sage

We have a few clients who for various reasons, have several businesses setup on Sage separately.  Currently they prepare a spreadsheet summary of the various VAT returns, then log into the HMRC VAT portal and submit the return.

I have read the following extract from VAT notice 700/22, where it states "and then transfers the totals", I assume this must be digitally transferred not manually entered!

Example 5 - Using accounting software, a spreadsheet and bridging software

It uses accounting systems or general ledgers (which are not API-enabled) to record all sales, purchases, and expenses in a digital format, and then transfers the totals of each of these into a spreadsheet used to prepare the VAT Return. This spreadsheet may also be used for any Partial Exemption calculation that is required. The return information in the spreadsheet is then sent via a mandatory digital link to bridging software, which submits the VAT Return to HMRC via an API. (As an alternative to bridging software, the spreadsheet could have API functionality built into it.)

If this is the case, I would be very interested to hear if of any ideas or information on how to proceed?

Have asked this question on a couple of HMRC webinars, but got no response!

Replies

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14th Sep 2018 11:45

Id just plan to do it in excel myself and not worry too much, and hope this magic API is available.

How on earth are HMRC going to audit this anyway? Its not like they really care if the VAT is right.

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to ireallyshouldknowthisbut
14th Sep 2018 13:14

Was having the same thought, just wanted to see if anyone else had the same opinion. How are HMRC going to know!

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to JayneMcK
14th Sep 2018 14:18

Short of employing 20,000 VAT inspectors just going around checking this, they wont have a clue.

And if they did employe 20,000 new VAT inspectors one would hope they would find something better to do.

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to ireallyshouldknowthisbut
14th Sep 2018 18:01

I like your thinking

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By NH
14th Sep 2018 12:49

Have you thought about moving them all onto one version of Sage and then using an analysis code for each entity for reporting purposes?
Either that or there might be other software that would handle this in a better way

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to NH
14th Sep 2018 13:17

One of the clients has only moved from TAS books to Sage in recent years, so I don't think they would welcome moving again. There's way too many transactions in each of the businesses to combine them, it's been that way for 15-20 years. Thanks for your input.

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14th Sep 2018 16:43

Hi Jayne,

Full disclosure - I'm the Marketing lead at Clear Books and I sent your enquiry to our MTD project lead for his expertise!

He basically said it all depends on whether the business is a VAT group or if it's a single legal entity with multiple business.

If it's a group, you could download the quarterly transactions from all legal entities, and upload into a single company account in the HMRC recognised MTD software. You then do your consolidation there, and the VAT filing.

For multiple business you could use the Projects feature in a HMRC recognised software. It would be similar to the Sage analysis codes. You could run a P&L etc. for each project code, but file VAT in the standard way. Usually, migrating the data to the new system is free and completely managed by the new online accounting system you're moving to (like the banks with their current account switching service).

Without more information he couldn't be more specific, but I hope that information helped a little bit!

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By Matrix
to Karina.Harley
14th Sep 2018 18:35

What if the business owner runs separate businesses under one VAT registration and does not want to set them up as projects?

If they were set up as projects then can you run separate P&L and balance sheet for each? Thanks

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to Matrix
17th Sep 2018 09:32

Hi Matrix,

If you don't want them set up as projects, you could apply the group treatment I described above and comply with MTD. If you feel keeping things separate is easiest, this could be a good solution for you. If the best long term outcome is to bring them together though, many software providers will provide free data migration from your old tool and 1:1 training options to learn the new software.

With regards to your projects question, I am only familiar with Clear Books although Project accounting is a feature of many softwares. Clear Books allows you can run P&L and cashflow statements per project.

Karina

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By ShayaG
to Karina.Harley
20th Sep 2018 17:46

Katrina,

I appreciate that you are trying to bridge between the accounting world and HMRC. However, in this case, I feel you are being used.

HMRC should come clean - they didn't think about VAT groups.

Most of the supposed benefits of MTD were supposed to arise by forcing people to keep up to date books. Instead, we have HMRC suggesting different legal entities intermingle their accounting records. It's a disgrace.

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By Matrix
14th Sep 2018 18:41

Which Sage is it? If it doesn’t have MTD capability then what are these Sage users doing? Can you export to a spreadsheet for the first year?

Many of my clients use Sage but are not interested in changing or subscribing to Sage for digital filing.

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to Matrix
17th Sep 2018 09:15

Latest version of Sage, so MTD compliant. Problem as I previously stated - several shops, loads of transactions, kept totally separate on Sage under multi-company, one VAT registration. VAT is prepared for each shop individually, them figures are summarised on spreadsheet for input to HMRC VAT portal.

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By NH
17th Sep 2018 09:36

Of course the easiest solution would be to apply for vat numbers for each entity, any reason why you couldn't do that?

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20th Sep 2018 11:03

My software company (Absolute) has produced a very simple excel worksheet that will comply fully with MTD for VAT (no cut and paste required) and can be used to file any VAT return as long as the user has already prepared the relevant figures. Groups, partial exemption, monthly - they make no difference to the basic filing.

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By Matrix
to Tim Good
20th Sep 2018 11:16

How do you get the data into the spreadsheet? If a client had an old version of Sage then how would it be input if you can't copy and paste and have to do it digitally? Thanks

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20th Sep 2018 11:33

Export to a csv file then link the cells to our excel vat filer.

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20th Sep 2018 19:26

You have said you are using sage in a multicompany way, but you haven't said if the separate businesses are in fact separate companies, or if there is a company involved at all.

What is the actual setup?

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By johnt27
20th Sep 2018 19:55

Hi Jayne,

If your client(s) are on the latest version of sage then when they upgrade to the MTD compliant version it supports group VAT reporting from multiple versions of sage.

It's the one solitary advantage Sage has over their competitors but in principle it's an easy solution to build and I'd expect QBO and Xero to launch something similar if needed.

Our recommendation to clients is to move to a proper cloud provider unless they are absolutely wedded to Sage. It's over priced, poorly integrated and the huge discounts they are offering to convince lapsed customers to upgrade to their SAAS model will only last 2 years.

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