Invoice Simple software and MTD

Client uses Invoice Simple to invoice he is on VAT flat rate scheme cash accounting- digital links?

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I use VT for bookkeeping and MTD. A client raises sales invoices ad hoc on Invoice Simple, this client is on vat flat rate. Where does the digital link have to start as the flat rate is calculated on the cash received, but only some sales invoices are raised, some cash receipts do not have a sales invoice. Is there a digital link available with this software and if so do I use it if it is incomplete? 

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By carnmores
21st Jul 2022 16:08

sounds like you need reversible journals at the end of each quarter. but you may be better off using bridging software (absolute?) and a bank download

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By Matrix
21st Jul 2022 18:01

How do you get the invoices into VT? It doesn’t deal with the flat rate scheme so you will have to make journals in any case. I would just do the bookkeeping in VT and don’t worry about a link from the other software or extract into excel and use VT bridging software. But you would still need to do the journals so just file from VTT.

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Replying to Matrix:
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By Di
22nd Jul 2022 09:46

Thanks for your response I am just getting bogged down with digital links. I thought once an invoice was issued in digital format it had to be used for MTD filing? I hope I can carry on with only using VT .

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Replying to Di:
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By cbarling
28th Jul 2022 09:39

My understanding is that if you had details of the actual transactions in VT that would count as the digital records. They would then be digitally linked to the MTD return. I'm not aware of any requirement to link to the very original source of the invoice.

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Replying to cbarling:
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By Di
28th Jul 2022 13:58

Hi thanks for your response. I have looked at Notice 700/22 and it seems that a digital link may be required?

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Replying to Di:
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By Matrix
28th Jul 2022 17:34

Is his invoicing software part of the electronic account?

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Replying to Matrix:
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By Di
29th Jul 2022 08:49

That's what I am asking, and if it is how do I link it?

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Replying to Di:
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By Matrix
29th Jul 2022 09:17

Just treat it as a mechanism for the business owner to raise invoices, you are complicating it by treating this as an electronic account (so part of the digital records).

If you are doing the bookkeeping then do it from scratch, treat the invoices as if they had been raised in Word per the post below.

I used to enter 3 monthly invoices into excel, calculate flat rate VAT and submit using VT bridging software, it doesn’t have to be complicated. I mean you don’t need to use VTT.

Or get him to use FreeAgent and then you don’t have two bookkeeping systems if that is causing you issues.

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By BIGWAL
28th Jul 2022 12:08

Go to "Help" then "User Guide" and search for "Flat Rate Scheme". VT supply full guidance on relevant journals. Once posted correctly the Vat return is automatically updated - and Hey Presto - there's your digital link.
If on checking before submission and you find you've made an error, you can delete the return and journal and start again till your sure it's OK.

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Replying to BIGWAL:
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By Di
28th Jul 2022 13:56

Hi, thanks for your reply I am ok with the journal it is the digital link I am having trouble with. Looking at notice 700/22 we have to keep records digitally so do we have to have a digital link to the invoices that have been raised by the client?

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By CardiffAccountant
29th Jul 2022 05:31

I think it is fair to say that you can simply copy the invoice details into VT. Imagine, if you like, that the client simply used Word to produce an invoice. You would then have to copy the details into VT and go from there.

Incidentally, I think you will find that under MTD for VAT, VT does not handle the VAT submission very well.

I moved to FreeAgent, because of VT’s Flat Rate ‘issue’.

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Replying to CardiffAccountant:
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By Di
29th Jul 2022 08:57

My understanding is that you cannot re key in the details once the digital process has started, so does it start when a client raises the invoice on Invoice Simple? Fine with a word document or hand written to re key in but if you use software that can be digitally linked you can not re key in the information. Please let me know if I am incorrect in my understanding it will save me a lot of stress!

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Replying to Di:
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By Hugo Fair
29th Jul 2022 10:57

You are still asking "My understanding is that you cannot re key in the details once the digital process has started, so does it start when a client raises the invoice on Invoice Simple?"

But so far 4 responders have indicated their belief that it doesn't *have* to ... which is all you're going to get because HMRC have signally failed to provide a concrete definition (on this or indeed on most practical aspects of MTD).

Broadly, the process (or more properly 'trail' or 'series of links') begins wherever you say it does SO LONG AS that point is NOT the point where you are entering data into the submission file.
You can decide that the link starts with your invoice generation if you want, but why would you (given that you gain no benefit from so doing and are making a rod for your own back)?

Bottom-line? You can keep repeating the question as often as you like ... but nothing will change unless HMRC finally get around to providing solid guidance in the future.

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