Hello everyone,
Been on the phone today with HMRC about MTD for VAT and when to bring over clients from my current government gateway account.
You are not suppose to bring them over IF they are set up for Direct Debit and it is within 15 WORKING days to the deadline when the VAT quarter is suppose to be submitted OR for 5 working days after the deadline has passed either! So for February quarter, the deadline is 7 April, so you should not bring them over for 5 working days after the 7 April OR 15 working days before it.
However I forgot to ask them if it is ok to bring them over if the client always gets a VAT refund and doesn't pay VAT any quarter? So I rang them back and they said in that case it makes no difference and I could bring them over any time even within this 15day/5day window.
Has anyone else been given this advice?
Also I was told that when you bring them over you input their details and they get an email and once they click on the link it will then be set up within 72 hours. I asked what if they have no email as they are not computerised at all, I was told that I could put in my email address as it just asks for "an" email address, not necessarily the client's.
Im curious if anyone else has been given this advice ??- I'm just double checking.
Thanks.
Replies (24)
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Webinar yesterday from HMRC:-
The Direct Debit timing is a Banking issue not a HMRC issue. Banks need 5 days to process Direct Debit instructions.
The date on this changed yesterday and for direct debits it is now 7 working days before filing date not 3 weeks (plus a couple of extra days).
I don't know of the situation on repayment accounts. My experience is limited to those that don't have DDs. On the 15/17 day period deadline it was a question of registration as the applications were rejected (at least in theory) by HMRC's systems. I don't know if that has changed, but as the number of days is now about half that makes life easier.
So the timing now is to not bring them over in the 7 working days before the deadline the vat quarter is due by and 5 days after it is due? Is that what you are saying?
That is what I have been told.
I am a computer programmer who writes MTD software. That means that I am on the mailing lists for announcements from HMRC. I spend some time in between coding bouts trying be helpful by explaining how the system works and answering technical questions.
MTD has been down from Friday to 8.30am today. That was to change various things on the system. One of those things was the period during which it is not possible to apply to join MTD.
I found out a while ago that there was a plan to change this period (and I think I made reference to this on AW) and I had an email on Friday telling me that this change was happening essentially yesterday. Strictly it could have been at 6am this morning or on Sunday, but I think yesterday is not an unreasonable description as to the day on which the change happened. It could have been any time during the period when the system was switched off although arguably the whole period was dedicated to this which does include "yesterday".
I did try to put an announcement about this change into AW, but I am not sure where it has gone.
This should mean therefore that I can bring over the clients to the Agent Services Account if I want to do the February quarter (even if they are signed up for DD and usually pay VAT)?
My recommendation to my clients who are accountants is to start with one client. I would think you could get a client across with a February quarter end and still manage to get them on board before it is mandatory. It is a bit close to the filing date to bring them all across.
What about instances when they are set up for DD but do not pay VAT, they always re-claim VAT? (e.g. a farmer).
I am not convinced that this will work. However, I have no evidence either way.
Its interesting to note that HMRC are actively suggesting a work around to their own security, by the agent being encouraged to enter a false email address.
What is the point of 'security' measure of this type if its so easily circumvented?
This whole step looks like it ought to be removed.
According to the HMRC webinar this morning, you can bring the clients over to your new Agent Services Account as soon as it is set up. However the clients still need to register individually for MTD(or you can do it for them) and that is when the crucial timing comes into play. They must not register before they have filed their last VAT return under the old system, as from the point of registration the MTD compatible software or bridging software has to be used. This is the point when you need to consider the DDs etc going through.
Allowing more opportunity (in terms of the number of days) for customers with existing Direct Debits to sign up for MTD VAT (changing from 15 working days before the deadline and 5 after the deadline to 7 working days before the deadline and 5 after)
Note the 5 after.
If you email me at [email protected] I will forward you a copy of the developers email with this on it.
What I understood them to say is that as soon as your client registers for MTD, they will have to use MTD software from then on - so I would assume from that if you are happy to file the February return using MTD software that would be ok.
The point I was trying to make is that you can bring clients over into your new ASA anytime but the client still has to register personally for MTD in addition to you bringing them over - and that is the point when they can no longer file under the old system.
What I understood them to say is that as soon as your client registers for MTD, they will have to use MTD software from then on - so I would assume from that if you are happy to file the February return using MTD software that would be ok.
The thing is that MTD is two things
a) Keeping digital records (which most people do already) and ...
b) Submitting via the API.
Hence if you are complying with MTD you need to keep digital records (somewhere, potentially created by your accountant just before you submit the return).
Going back to your original question about the e-mail address, the person on the webinar said that the client would have to have their own e-mail address because it was connected to the banks informing them about taking the DD payment.
Hi Margaret
Unless things have changed, then HMRC are talking carp again.
Clients can have D/d with email.
Not all clients have email.
Not all clients with VAT have email.
Its not the Bank that notifes them via any method whatsoever that VAT D/D is being taken.
Its the ridiculous approach I mentioned on another thread - HMRC et al thinking everyone on the planet has internet access and an email.
You need to take a step back. If a client has a liability then don’t register until DD is collected plus x days as advised. This is so that the payment is not missed.
Where there is no payment then does it really matter? If it lets you set it up then do so, or set them up all at the same time.
I am not taking part in the pilot and will look at this after 15 June. I am very grateful for all the guinea pigs unearthing the problems for me.