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Is Quickbooks online compliant with MTD?

I don't think it is!

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The issue here is that my client set up VAT themselves within Quickbooks and set it to use the cash basis. They are not eligible for the cash basis so, on finding this out, I have changed it to the accruals basis. There are, as a result, adjusting entries on the return. All well and good so far.

Now Quickbooks does helpfully calculate these adjusting entries, which is great. However, the entries show up as a single total on the return generated. I don't trust that total is correct, not as a result of any problem with Quickbooks, but because I expect there's other things lurking about in Quickbooks that might also have fallen in there despite not being relevant to this return, such as unreconciled items from before Quickbooks was being used for VAT and the like.

What I would really like is to see what transactions Quickbooks thinks need adjusting for on the return, however this isn't possible. I've been on with support for two hours today who have confirmed it isn't possible, the best they can offer is the suggestion to generate one report under the cash basis and another under the accruals basis and the differences between the two are the reconciling items. Fair enough, that's achievable and I'll do it, shame it took two hours to get that answer.

However, it occurs to me that this is absolutely not a digital link from the Box 1 and Box 4 totals all the way back to the transaction level data. It falls over at the first step below the return and if you want to know where the figures in that report come from, you then have to change the settings, export the data, change them back and then manually compare the results.

That is, to my mind, definitely not compliant with MTD, what do you think?

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By SXGuy
02nd Dec 2021 13:58

The point of Mtd is that its digitally linked from the point of input to submission, whether that be by linking a spreadsheet to bridging software or entering the data in the software.

Mtd doesn't extend to changing settings and exporting data to compare the difference, that isn't anything to do with Mtd.

I may of course missunderstood your question.

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Replying to SXGuy:
By Duggimon
02nd Dec 2021 16:31

SXGuy wrote:

Mtd doesn't extend to changing settings and exporting data to compare the difference, that isn't anything to do with Mtd.

I may of course missunderstood your question.

That is my point entirely. QB have advised that the only way to see how the nebulous "Open Transactions" adjustment figure shown on the VAT return is made up is to export all the data and cross check it manually.

My point is that if you can't see in the software where the figures on the return come from, it's not MTD compliant. QBO essentially does the equivalent of sticking an adjustment figure into the return with no workings to show how it's been arrived at.

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By ireallyshouldknowthisbut
02nd Dec 2021 14:33

Well when you file in Xero you can just type in any adjustment you want.

Same if you use bridging software connected to your good old spreadsheet.

QB is the one I have had most issues with, and I have tended to "defuck" the digital disaster of the clients making in QB (if possible) and then just file the right numbers in excel. If its an utter shower of hand mashing misery I just post a global adjustment. Life is too short to amend dozens of garbage entries.

MTD working at its best. Of course from HMRC's point of view, its all digital so it must be right, they have no idea what we do downstream. I give nofucks if its compliant or not as the tax is right. Getting the tax right is my job, not holding up HMRC's fantasy projects.

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