Share this content
0
4330

Is bridging software the answer for MTD....

......or is it more a short term sticking plaster?

Didn't find your answer?

Search AccountingWEB

Having spoken with a couple of people at Sage recently as well as an inspector from HMRC last Autumn I'm a little confused as to how long bridging software will be a solution for MTD for.  The people at Sage suggested that although bridging software will be fine during the first year of MTD (the 'soft landing' period) they won't be thereafter.  Certainly if you're exporting from older versions of Sage the core data required won't be there apparently.  There's also the issue for Sage clients that Sage are effectively disabling the older versions should you get to the point of reinstalling on new PC's/servers etc.

We have a number of clients who are looking to use the bridging software but I'm wondering whether they would be better to just bite the bullet and switch to Xero/QB etc now.  Are these spreadsheet solutions going to be around for a few years or, as Sage and the Inspector suggested, they will be pretty much defunct within a relatively short period?

Replies

Please login or register to join the discussion.

avatar
27th Feb 2019 14:54

They are around for years. The "no good after one year" is an urban myth.

You spoke to someone from Sage who would want you to pay to upgrade for no reason, and someone from HMRC who nowadays you're lucky if they know which day in the week it is.

There's your problem.

Thanks (9)
avatar
By pbolton
to DaveyJonesLocker
27th Feb 2019 15:14

[quote=DaveyJonesLocker]

You spoke to someone from Sage who would want you to pay to upgrade for no reason, and someone from HMRC who nowadays you're lucky if they know which day in the week it is.

I did take the 1st Sage guy's advice with a pinch of salt for that very reason but when that seemed to be confirmed by a colleague and the Inspector I was starting to worry. Older Sage being effectively turned off is a concern too for sure though.

Thanks (1)
avatar
27th Feb 2019 15:20

The HMRC webinar last week clearly pointed out that the bridging software is only going to be acceptable for one year. We looked at this as an option but decided against it purely on needing to bite the bullet. We have got the MTD system working and submitting eventually - just now working through clients one by one to see which options for software they want to go for

Thanks (0)
to Louisemunro320
27th Feb 2019 15:25

That just isn't true, I suggest you go back and research this further before you make a complete [***] up of the whole process.

Thanks (5)
avatar
to Louisemunro320
27th Feb 2019 16:42

I suggest watching the webinar again if you think it's only for one year.

Thanks (2)
to Louisemunro320
28th Feb 2019 10:29

Louisemunro320 wrote:

The HMRC webinar last week clearly pointed out that the bridging software is only going to be acceptable for one year. We looked at this as an option but decided against it purely on needing to bite the bullet. We have got the MTD system working and submitting eventually - just now working through clients one by one to see which options for software they want to go for


I watched it and they said no such thing!
Thanks (7)
avatar
27th Feb 2019 15:39

If you have a good integrated system that will submit directly to HMRC then that is probably your best option as long as the costs are reasonable. However,
a) Spreadsheets are software
b) The state cannot realistically require you to have a single system purchased from one vendor (although they can require digital links).
What is key is to provide digital links between the software.

Unsurprisingly people selling software (which includes me) from time to time may overegg the pudding. I personally try to avoid doing that, but the softwre industry is not known for understatement.

Thanks (4)
avatar
27th Feb 2019 15:52

We've come to the conclusion that bridging software will be the best solution for most of our clients. Spreadsheets are far easier to understand and manipulate to suit each individual client depending on their type of business.

There is no way bridging will only be suitable for one year. Many clients simply won't switch to cloud bookkeeping no matter how we press them.

I think we've all been led up the garden path to make the leap to cloud bookkeeping. It's not the solution for everyone. We're now suggesting clients use Excel.

Job done.

Thanks (5)
27th Feb 2019 16:17

No its not the answer and yes it is a sticking plaster for the solution

Thanks (0)
to Glennzy
27th Feb 2019 16:22

I agree. HMRC clearly don't like it and, if necessary, they'll legislate.

At some point, it won't be good enough.

But, for now, you're grand.

Thanks (0)
avatar
to lionofludesch
27th Feb 2019 16:45

Perhaps you could point to FACTS where it says HMRC don't like it.

I won't hold my breath.

Thanks (1)
to DaveyJonesLocker
27th Feb 2019 17:01

DaveyJonesLocker wrote:

Perhaps you could point to FACTS where it says HMRC don't like it.

I won't hold my breath.

Well, the fact is that I'm not sure how well spreadsheets will work when MTD goes to the next stage. Nobody knows when that will be. The fact is that spreadsheets weren't originally allowed and bridging software was only introduced as a concession after the plans were scaled down.

Take it or leave it.

No skin off my nose.

Feel free to hold your breath or not hold your breath.

Thanks (3)
avatar
to lionofludesch
27th Feb 2019 18:00

lionofludesch wrote:
The fact is that spreadsheets weren't originally allowed and bridging software was only introduced as a concession after the plans were scaled down.

I have not seen a government source that says this. Spreadsheets are a special type of programming environment that is quite easy to use by people who are not particularly technically orientated. They are computer systems. If HMRC say they want a computer system to record the data that does not require the words "or spreadsheets" to be added to include spreadsheets.
Thanks (0)
to johnhemming
27th Feb 2019 18:14

johnhemming wrote:

I have not seen a government source that says this. Spreadsheets are a special type of programming environment that is quite easy to use by people who are not particularly technically orientated. They are computer systems. If HMRC say they want a computer system to record the data that does not require the words "or spreadsheets" to be added to include spreadsheets.

Ach, well, it doesn't really bother me. None of my clients plan to use spreadsheets beyond the end of their current accounting period.

Thanks (0)
avatar
to Glennzy
27th Feb 2019 16:41

Absolute rubbish

Thanks (0)
to DaveyJonesLocker
27th Feb 2019 16:44

Care to elaborate.

Thanks (0)
avatar
to Glennzy
27th Feb 2019 17:08

For starters many tax suite software will have bridging facilities from April.

I know it doesn't fit in on AW to worship cloud software providers, but they're not the b all and end all

Thanks (1)
to DaveyJonesLocker
27th Feb 2019 17:30

"For starters many tax suite software will have bridging facilities from April"

Your point is?

Software providers have built a sticking plaster solution which the charge for.

Bridging software is not intended to be used by small business users.

The last minute reprieve off the spreadsheet as only allowed it to happen.

Bridging software is not the answer, there are too many variable/errors in a spreadsheets for it to be a long term solution, how will they cope when HMRC require transactional data filing.

I know it doesn't fit in on AW to worship cloud software providers, but they're not the b all and end all

"I know it doesn't fit in on AW to worship cloud software providers, but they're not the b all and end all"

This view is ridiculous, its not about cloud worship, the tools we have now allow us to do a much better jobs for clients when their needs/business grow.

If you were doing reporting in spreadsheets the costs are so great it would only be available to audit level clients, now bars and restaurants etc can get big firm MI for beer money.

Thanks (1)
avatar
to Glennzy
28th Feb 2019 08:53

Glennzy wrote:

n

Slightly (well very) off track - why when people reply to or quote ‘Glenn Martin’ does their post refer to ‘Glennzy’?

Thanks (0)
to atleastisoundknowledgable...
28th Feb 2019 11:23

atleastisoundknowledgable... wrote:

Glennzy wrote:

n

Slightly (well very) off track - why when people reply to or quote ‘Glenn Martin’ does their post refer to ‘Glennzy’?

Because hes a cool Xero hipster and one of the rules is to have a Z in your name.

Thanks (6)
to MissAccounting
28th Feb 2019 13:18

Ha ha I am the least cool person in both accountancy and the Xero network, I do not have a beard, own a hoodie or eat avocados on toast.

Aweb will have to explain the name change.

Thanks (1)
By tom123
to atleastisoundknowledgable...
28th Feb 2019 12:31

Coz Glennzy is old school - :)

Thanks (0)
avatar
27th Feb 2019 16:52

Bridging software is definitely here to stay! I started using btcsoftware's hub. I found it very easy to set up!

Thanks (0)
to SamPayne
27th Feb 2019 17:08

At one time, I thought Advance Corporation Tax was here to stay.

Thanks (0)
avatar
to lionofludesch
28th Feb 2019 08:55

lionofludesch wrote:

At one time, I thought Advance Corporation Tax was here to stay.

Before I even started training!!

Thanks (0)
to atleastisoundknowledgable...
28th Feb 2019 09:14

atleastisoundknowledgable... wrote:

lionofludesch wrote:

At one time, I thought Advance Corporation Tax was here to stay.

Before I even started training!!

OK - what about that daft Child Tax Allowance we had between 2001 and 2003 ?

Or Class 2 NIC - I didn't see abolition coming there.

Oh - hang on - it never came, did it ?

Thanks (0)
avatar
27th Feb 2019 17:04

One thing is guaranteed. Sage will always be looking at angles to help you part with more money than hoped for. It’s in their DNA.

Thanks (5)
27th Feb 2019 18:33

I think spreadsheets are here to stay for a long time yet. Whilst having everyone use formal MTD compliant accounting software is a brilliant idea in some HMRC fantasy, the fact is that when thought through, they have had to concede that there are so many situations where spreadsheets are the only answer. For example, where you have group registrations involving diverse activities and all different software, or where the company has some weird software imposed on them from the foreign parent - which will never be MTD compatible.

Thanks (3)
to jon_griffey
27th Feb 2019 19:11

Bridging software was built to deal with the circumstances you mention Jon it was not intended for small business to use it to file a single vat return

Thanks (0)
avatar
to Glennzy
27th Feb 2019 20:28

And why not? Why should a small business with simple affairs not be able to use what suits them instead of what's fashionable?
Seems more people are interested in what suits them as a practice rather than what suits a client.

Thanks (5)
to DaveyJonesLocker
28th Feb 2019 10:52

its not about being fashionable or on trend. Its about keeping clients compliant and moving with the times.

using bridging software is like scraping a pass in an exam.

I won't be using it and fortunately i dont have clients who will need to use it either.

If you want to sit filing vat returns for people like this then fill your boots its a low value service that will be a headache manage and control

"This let the clients do what they want " is not an argument we are there to advise on best practice.

Its still possible to file paper accounts with Co House but over 90% of all documents are filed digitally, because its cheaper and easier, and your dont get accounts returned and filed late for a comma in the wrong place.

its possible to file paper tax returns but how many people still do.

Do you drive to work in a car or ride a horse still.

Thanks (0)
to Glennzy
28th Feb 2019 11:18

Glennzy wrote:

Its still possible to file paper accounts with Co House but over 90% of all documents are filed digitally, because its cheaper and easier, and your dont get accounts returned and filed late for a comma in the wrong place.

its possible to file paper tax returns but how many people still do.

Do you drive to work in a car or ride a horse still.

Ultimately, this is the point.

I doubt if I will have any clients using bridging software. I do have a few who have switched to annual accounting but that's more about making the change to Proper Software at an accounting year end than a desire to continue using spreadsheets.

Thanks (0)
By Tornado
to lionofludesch
28th Feb 2019 12:08

I think Glennzy has neatly highlighted the fundamental problem with Making Tax Digital in that it is being forced on to businesses in an inappropriate and ineffective way.

The ability to file at Companies House digitally has been possible for many years, and I cannot remember when I last filed paper accounts, but this was not made mandatory and people have joined in with electronic filing when they were ready. The fact that 10% still file on paper is an acceptance of the inevitable that not everyone will be able to deal with these requirements.

It is the same with filing Tax Returns. Again I cannot remember when I last filed a paper Tax Return (oh yes I do actually, there were several for 2017 and 2018 where exclusions arose because HMRC software was incapable of calculating tax correctly) but I was not amongst the first to file electronically. I joined in when I and my clients were ready to do so and not because a gun was pointed at my head telling me I HAD to do this. It is still possible to file paper Tax Returns if desired which again is an acceptance of the inevitable that not everyone will be able to deal with these requirements.

So thank you Glennzy for highlighting the reasons as to why Making Tax Digital should NOT be mandatory and SHOULD be introduced on a more planned and common sense way that encourages people to join when they are ready.

I am still of the opinion anyway, that MTD for VAT will not be mandatory as from 1st April 2019

Thanks (4)
to Tornado
28th Feb 2019 12:27

Yes but you cannot file paper returns now for VAT. They need to be submitted via government gateway and have done for some time.

So you have to keep good enough records to get you to that point so is it that much harder to then use a different tool to file it whether bridging software or accounts software.

I just dont see it as a bigger change as people are making out.

Its not mandatory for all.

Those registered businesses under the VAT threshold do not have to do it, as do a host of others exemptions.

A lot of businesses also seem to have been moved to 01.10.2018 to ease the roll out.

Thanks (0)
By Tornado
to Glennzy
28th Feb 2019 12:49

"Yes but you cannot file paper returns now for VAT. They need to be submitted via government gateway and have done for some time."

Most people have been able to handle this and it works with ANY way in which businesses maintain their accounting records. It may be mandatory but it does not require massive changes to the way people run their businesses.

"I just dont see it as a bigger change as people are making out."

I think that is your problem. Those of us that actually deal with small and medium sized businesses at the sharp end see things exactly as they are, not how you appear to see them.

"A lot of businesses also seem to have been moved to 01.10.2018 to ease the roll out"

Very few in fact.

It is interesting to note that in October 2018, HMRC announced that the MTD Pilots were opened up to 500.,000 businesses (out of 1.2 million affected) and additional groups have been added since then. But, a week or so ago, Mel Stride tells Parliament that only 16,500 have signed up to the Pilots. Surely alarm bells are ringing here that mandatory of not, this just is not going to work in the way that HMRC, and some software developers, hope.

Time for a reality check I think otherwise our business community may be decimated by unrealistic expectations and onerous fines, penalties and interest.

Thanks (3)
to Tornado
28th Feb 2019 13:02

Tornado wrote:
But, a week or so ago, Mel Stride tells Parliament that only 16,500 have signed up to the Pilots. Surely alarm bells are ringing here that mandatory of not, this just is not going to work in the way that HMRC, and some software developers, hope.

But Mel didn't present it as "only 16,500". He made it sound like businesses were flocking in.

Thanks (2)
By Tornado
to lionofludesch
28th Feb 2019 13:24

You are correct, and I should have put the 'only' on brackets as my addition.

However he did say that 1.2 million letters will have been sent to businesses by the end of February (thus giving them a full month to deal with the massive changes to the way they run their businesses) and thus highlighting the pathetic number of people who have the slightest bit of interest in this project.

Thanks (2)
to Tornado
28th Feb 2019 13:26

"I think that is your problem. Those of us that actually deal with small and medium sized businesses at the sharp end see things exactly as they are, not how you appear to see them".

I am a sole trader with 2 part time staff and 100 small business clients how do you assume that I do not operate "at the sharp end"

I deal with my clients day in day out and fully understand what they need at the sharp end.

Thanks (0)
to Glennzy
28th Feb 2019 12:54

Glennzy wrote:

I just dont see it as a bigger change as people are making out.

Ach - you've gone too far now.

Some bloke has come up with thed idea of starting with VAT because it's just adding up the VAT on your sales invoices and adding up the VAT on your purchase invoices.

Whereas the fact is that there are at least a dozen situations where that's not true. There are regular threads on here asking about software which will deal with second hand schemes or retail schemes or partial exemption.

What HMRC have done is set a deadline which is so short that only the simplest cases are able to comply. Which might well be the majority - but it still leaves a significant minority.

Thanks (2)
to lionofludesch
28th Feb 2019 14:54

Personally I don't think it will get beyond VAT.

HMRC want to see individual transactions to spot errors and things claimed incorrectly they will get that from the VAT returns once they contain all transactions.

The 4 accounts submissions and then adjusting return will just clog up the system I cannot see that happening as too many variables in it, now that I agree will be a mess.

Thanks (2)
By Tornado
to Glennzy
28th Feb 2019 15:26

I think I can detect a glimmer of agreement here.

If MTD had been introduced in a more structured way by business size and not by type of tax, and not mandatory, then I think there would have been more support from the profession.

If this had been approached with the bigger businesses first and covering all taxes, then the software would produce all of the necessary information required automatically in one go for all taxes (just about anyway).

The current (inexplicable) way of separating out the taxes produces this absurd situation where the the use of spreadsheets and bridging software is NOT MTD but some form of face saving compromise by HMRC just to say that it is MTD, when we all know that this will not fulfil the original idea of MTD.

Get the bigger businesses sorted out first and use that experience to ensure that when medium businesses come on board, a few years later, they experienced few problems as these will have largely been sorted out beforehand.

Finally, bring the smaller businesses on board much further down the line and they too will experience few problems having the experience of those already in the system to fall back on, and also having had several years to re-organise their businesses to adapt to a new system.

All of this has to be voluntary as that is the only way to get the necessary support for such a project from all of those involved.

Unless this is reviewed very soon, and preferably with genuine long term support from software developers, this is a mess that can only get worse.

What is this mad rush to force businesses to use accounting software about anyway, the world will not explode if a more steady and sure approach is taken.

Thanks (2)
avatar
to Tornado
01st Mar 2019 16:30

All very sensible words but we are talking about the HMRC.

The HMRC has been hypnotised in believing that the tax gap will be massively reduced if the small businesses (like the Joe the plumber) are forced onto accounting software and then have to regularly report.

MTD for VAT was not meant to be first, it was just a compromise. The HMRC will say in September that MTD for VAT has been massive success will go full steam ahead with MTD for IT.

The House of Lords committee has been constantly listening to sense and been telling the HMRC the error of their ways but with no success.

Sadly the "mad rush" is happening everywhere. In five years time the majority of new cars will be electric and some will be self driving. The HMRC's argument is that shouldn't the tax system move with the times (and the times they were a changin).

Thanks (1)
By Tornado
to david.bransbury
01st Mar 2019 16:56

"Sadly the "mad rush" is happening everywhere. In five years time the majority of new cars will be electric and some will be self driving. The HMRC's argument is that shouldn't the tax system move with the times (and the times they were a changin)."

A good point there David. Self Driving Businesses ... sit back and they run themselves all under the control of MTD.

I can't wait

Thanks (3)
By Tornado
27th Feb 2019 18:48

I am confused ....

Copy and paste from one spreadsheet to another is not apparently a digital link and not acceptable to HMRC but my bridging software is happy to accept a .csv file of information from the spreadsheet to a place that it can find it, which apparently HMRC will accept. Indeed, the .csv file can come from any software that can export a csv file of relevant data.

Both are digital transactions (there is no other way to do them) so what makes one an acceptable digital transfer of data and the other not?

On this basis, it seems acceptable to transfer data from multiple spreadsheets/software via csv files and still call it fully digital and thus acceptable to HMRC.

I think HMRC needs to provide some in depth explanation about what is a digital transaction and what is not, with full workings for their reasoning.

Thanks (1)
avatar
to Tornado
27th Feb 2019 19:02

Mapping

Thanks (0)
By Tornado
to johnhemming
27th Feb 2019 20:09

Mapping?

Which one?

*Cartography, mapping in general
*Web mapping, mapping using data delivered by GISs
*Mapping (mathematics), a synonym for mathematical function or for morphism
*Gene mapping, the assignment of DNA fragments to chromosomes
*Brain mapping, set of techniques to study the brain
*Data mapping, data element mappings between two distinct data models
*Texture mapping, in computer graphics
*Mind mapping, the drawing of ideas and the relations among them
*Robotic mapping, creation and use of maps by robot
*Spiritual mapping, a practice of some religions
*Projection mapping, the projection of videos on the surface of objects with irregular shapes
*Other

Thanks (0)
avatar
to Tornado
28th Feb 2019 08:57

*Other

You can’t ‘copy & paste’ - instead you have to use (if required) cross-file formulae.

Thanks (0)
avatar
28th Feb 2019 09:26

Before July 2017 HMRC was saying that spreadsheets were not acceptable bookkeeping software.

I do not expect HMRC to ban spreadsheets for MTD for VAT. However I expect they will be just used for group registrations submissions, partial exemption calculations etc and not as a bridge between old software and the HMRC.

As far as I am aware we have had no confirmation that spreadsheets will be acceptable for MTD for IT, certainly not for MTD for CT.

I expect that the move to MTD to other taxes will make use of bridging software drop drastically.

An increasing number of tax authorities round the world require sales invoice to be submitted electronically to the authority before being sent to the client. If this happens in the UK then you will have virtually everybody moving to the latest version of their bookkeeping software.

Thanks (1)
avatar
By Exector
28th Feb 2019 12:06

For what its worth, the HMRC Talking Points MTD for VAT Webinar which was put out on 20th Feb 2019 specifically referred to spreadsheet bridging software in its myth busting section and it was clearly stated that such bridging software products were potentially utilisable for the long term. The principle requirement for the first year was that the data is taken from the spreadsheet with the VAT data to be filed up to the API and thereafter filed online, wholly by digital links (ie essentially no keying requirments. For the first year it would be possible to take the data from the accounting records to the summary spreadsheet without using a digital link, but after the first year ( April 2020 for non deferred filers) it would also be necessary for the VAT data summary spreadsheet to receive the information from the accounting records by digital links. Providing that requirement was met, HMRC stated the bridging software/API solution could be continued with indefinitely.

Thanks (6)
avatar
01st Mar 2019 15:33

No and yes in answer to the questions.

It was buried in the consultation document in August 2016 and has not disappeared.

I am referring to what HMRC call supplementary data (aka all transaction data) - just have a look at 700/22 point 5, reproduced below;

"Supplementary data is a feature of MTD that will be available at a future date. It will be voluntary. HMRC will specify what supplementary will be, but broadly this will be information that supports the 9 box VAT return, blah blah............... Further information and detail about this functionality will be published in due course".

HMRC will specify (tell you what is needed) and it's voluntary (you don't have to do it so as to not put you off at the minute).

How many things do HMRC specify that are voluntary?

Hence, no and yes.

Thanks (0)

Pages

Share this content