Share this content
0
715

Late Claims and VAT in MTD

Anyone else experiencing the problems of duplicated items in vat returns

Didn't find your answer?

Search AccountingWEB

I felt this needs to be highlighted as a serious issue and wondered of the experiences of others and how widespread this is?

Recently filed 1st return in MTD using Xero. Just looked at a review of the current quarter and was shocked to see some filed items appearing again in Late Claims in the new Quarter. 

I asked Xero help why this was the case and response was this ...

'We've taken a closer look at the period ending July 2019 VAT Return, and we can see that late claims are showing. As you have found, transactions that have been included in a previously submitted MTD VAT Return, will show as a late claim in the next open period if they have been edited or removed. If you want to make changes to the figures that appear on the MTD VAT Return, you can use the adjustments feature.'

In the pre-MTD version you could deselect 'include late claims' but this is no longer an option. Unless companies are aware that merely editing an invoice will push it into the late claims, I imagine it could have huge implications if not picked up. Just wondered whether others had experienced this? And since the whole point of MTD was to make the information accurate, this surely does the opposite though no doubt the errors will be to the benefit of HMRC. 

Replies (20)

Please login or register to join the discussion.

By ireallyshouldknowthisbut
16th Aug 2019 10:29

Whilst I dont use Xero for filing returns (we use bridging so it can be manipulated when required as the box 6 & 7 tend to be hopeless and things stray into boxes 8&9) Late claims if edited will cancel out if they cancel out.

If they don't cancel out, they will quite rightly be included in next quarter.

Not sure what your problem is? Its not like the detail goes to HMRC.

Given this has been happening since Xero first started, of more worry is you have presumably never checked the chuffing detail before. Do you just slap the send button or something?

Thanks (0)
Replying to ireallyshouldknowthisbut:
A Putey FACA
By Arthur Putey
16th Aug 2019 10:36

ireallyshouldknowthisbut wrote:

Its not like the detail goes to HMRC.


But is does now, under MTD?
Thanks (0)
Replying to Arthur Putey:
By Duggimon
16th Aug 2019 10:39

No it doesn't. HMRC get the same nine boxes they always did, nothing more.

Thanks (1)
Replying to Arthur Putey:
By ireallyshouldknowthisbut
16th Aug 2019 11:01

LMAO

Keep up at the back.

Thanks (1)
Replying to ireallyshouldknowthisbut:
avatar
By C Graham
16th Aug 2019 12:07

Your arrogance and rudeness in your reply and choice of words 'slap the send button' 'presumably never checked' is both derogatory and wrong.

For the record, no we do not just slap the send button. Yes we always check the detail, which is why we know it happens. But it shouldn't unless there is a change to the actual vat detail which alters the numbers.

The point being made was that simple software like Xero has the potential to let duplicate items slip into a return when no change has been made that actually affects the vat! Before MTD it was possible to deselect late claims but now it isn't.

Simply by editing an invoice (ie not changing date, value etc) it should not fall back into late claims. But it does. And does not cancel out. So a manual adjustment is required.

But the point I was making is that there should be a flag system that recognises items previously submitted through a return so that any duplicates cannot slip through and I think this late claims section will catch some users out.

Thanks (0)
Replying to C Graham:
By ireallyshouldknowthisbut
16th Aug 2019 15:51

@the OP

its hard to be derogatory when you are clearly don't know how you software works.

"late claims" is absolutely a "flag system that recognised items previously submitted through the return". Thats its entire function. One which you are undermining by making manual adjustments and deselecting it previously.

This ought to have been abundantly clear once you had reconciled the VAT even if you misunderstood how the system works. You do reconcile the VAT before filing, right?

Its very hard to have much sympathy, this is really basic stuff, unless you are a bookkeeper, in which case I suggest you stop what you are doing, you are way out of your depth. Phone your accountant, and get them to come and sort it for you.

Thanks (1)
Replying to ireallyshouldknowthisbut:
avatar
By C Graham
16th Aug 2019 18:21

not it isn't in fact it is the opposite - late claims is to pick up items that should have been included in the previous Q but weren't. And to go back to my original point - I would not therefore expect non vat changes to put items into late claims but Xero does! That was my point and suggest if you are talking about basic stuff that at least you get your facts right.

Thanks (0)
A Putey FACA
By Arthur Putey
16th Aug 2019 10:33

Isn't that the point of late claims? I've never de-selected the option because to do so migght omit a transaction that was entered late or amended.

Thanks (0)
By Duggimon
16th Aug 2019 10:33

Isn't this correct behaviour? Surely if you make adjustments to previously included figures, these adjustments should appear on the next VAT return?

Or have I misunderstood what Xero is doing, is it putting the full invoice/expense on the return again?

Thanks (0)
Replying to Duggimon:
A Putey FACA
By Arthur Putey
16th Aug 2019 10:38

For late claim adjustments Xero reverses the original entry and adds another, so you see 2 entries on the detail report

Thanks (0)
Replying to Arthur Putey:
By Duggimon
16th Aug 2019 10:40

So as I said, it's correct that Xero should do this, though as Matrix points out, there is a tidier way of processing these changes to avoid using the late claims feature.

The result should be the same regardless, provided the original returns were properly completed.

Thanks (0)
Replying to Arthur Putey:
avatar
By C Graham
16th Aug 2019 18:30

yes but not just adjustments to original entries. Late claims picks up items that should have been in previous Q but weren't and that's fine and useful. My point was that it is not useful if it picks up items correctly filed, no adjustment to vat but any edit to the invoice like adding a PO for example which came in late puts it into late claims. The Xero advice was wrong that a manual adjustment needs to be made - and you are right when you say it reverses the entry to cancel itself which I saw when I looked back again at the whole review report.

Thanks (0)
avatar
By Matrix
16th Aug 2019 10:38

Did you file the last return from Xero so it is showing as published?

Why are you changing invoices from a submitted VAT return, a credit note should be issued.?

Do you think Xero is doing something different from pre-MTD? I will take a look as I always assumed late claims were correct but will double check from now on.

Thanks (0)
Replying to Matrix:
A Putey FACA
By Arthur Putey
16th Aug 2019 10:40

Matrix wrote:

Did you file the last return from Xero so it is showing as published?


Good point!
Thanks (0)
Replying to Arthur Putey:
avatar
By C Graham
16th Aug 2019 18:22

in Xero at least you cannot publish if you file through MTD - you can only publish if you do not file MTD

Thanks (0)
Replying to Matrix:
avatar
By C Graham
16th Aug 2019 12:32

I have not yet submitted the return as the quarter is not closed. Having looked at the review of the data it seems that in fact Xero's advice was wrong. The items edited and in late claims are cancelled out so no adjustment was needed. But unless there is a change to vat info, simply editing another part of an invoice should not include them in late claims which was my point. Late claims does serve a purpose but should only be reference to a change in vat information.

Thanks (0)
avatar
By JoF
16th Aug 2019 10:50

I dont use xero, but most software works as the others have stated - you should find 2 entries for the edited/deleted item.

I usually tell my clients to NEVER EVER EVER on pain of death edit or delete anything that has been bank or VAT reconciled or is a prior year end (of course that threat always works! Not).

Thanks (1)
avatar
By frankfx
16th Aug 2019 12:52

Puzzled.

Why would an invoice issued and set in concrete be edited after the event.

Precisely what editing are you or client doing.

Thanks (0)
Replying to frankfx:
avatar
By C Graham
16th Aug 2019 14:46

adding PO

Thanks (0)
Replying to frankfx:
A Putey FACA
By Arthur Putey
19th Aug 2019 09:22

You might simply wish to change the account code, or the due date. I've never checked whether any edit triggers a late claim entry, nor whether find and recode does.

By the way a problem with simply locking the period in Xero to prevent such changes is that you can't then do things like allocate credit notes or overpayments without opening it again.

Thanks (0)
Share this content