New client runs a BnB business. Does his accounts and bookkeeping in Xero.
At the moment he puts his income on a simple spreadsheet and enters a monthly figure into Xero. He is concerned that under MTD he will have to enter every booking and sale separately. What would be the best solution? Could he enter daily sales, or weekly sales would that produce enougfh detail? Or daily bank receipts as a sales figure?
He just wants to keep things as simple as possible
Replies (8)
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Is he VAT registered ? If not he hasn't got a problem .....yet/for the foreseeable future
The thing is, he should be tagging bank payments to the income, so if he recorded a daily sale for example, that would link up to multiple bank transactions.
The issue with mtd is whether that would be acceptable, I know retailers will have the option to record daily sales but clearly they have not thought of every business senario.
My advice if vat registered would be to use the first year of no penalties and just make it as easy as possible for him, worry about correcting the takings entries once mtd is firmly in place and real world situations are played out forcing hmrc to revise methods.
I think they're expecting details of every single transaction.
But who knows ?
It sounds very impractical for many businesses.
An alternative, of course, is to use the Spreadsheet as the primary records and get an MTD bridge from the spreadsheet to HMRC. HMRC are only using the 9 Box information.
The key to MTD and Digital Links (which are only required from 2020 anyway) is not to retype any information that is used to send information to HMRC.
No idea what HMRC expect. However, as a software user, why not enter it all and use it to create an invoice for the visitor?
He could even use tracking codes and use MTD to his advantage for future management reports.
Im no fan of MTD. I think its madness as plenty of clients keep great paper records but for someone embracing the technology, its worth using it as best you can. It costs enough!
Can client not just alter the way in which he records in his spreadsheet to the CSV format supplied by Xero? You could help him set up Line Items for varying rooms, to make it even simpler.
Then using the management tracking/individual budgets would give him even more insights when it comes to MA. Most profitable room in qtr etc.
Bit of value add for the customer too - he can send them individual invoices.