I have contacted QB and asked them about MTD and the fact that FRS (Flat Rate Scheme) VAT returns are not able to be submtted digitally via their software. They told me that MTD for VAT does not cover FRS clients, they are initially exempt from MTD, and so, I should continue to use the HMRC portal.
However, when I have looked at the HMRC guidance I can see that the sales data is required to be submitted digitally via softawre not via the HMRC portal. I have asked QB about this but the keep just refering me to their reference pages and not answering the question.
Is anyone else having a similar experience or any better knowledge than me as to whether the portal can still be used or not for FRS?
Replies (27)
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I hope I'm reading your post correctly, i.e. QB say that MTD doesn't apply to those who use the FRS? As far as I know it does. Take a look at VAT notice 700/22
EDIT. If QB can't cope with FRS and MTD (which I find unlikely) you'll have to use bridging software.
I too have been given the same excuse:
Per QuickBooks Support
QUOTE
It's true that we are not able to directly submit VAT returns on Flat Rate Scheme directly to HMRC through QuickBooks Online. The reason behind this is because HMRCs API doesn't support FRS filing so we are unable to do it through the product either.
We would still provide you with the figures that you would submit to HMRC but you would have to sign in to the HMRC gateway manually and enter the figures in there to make the submission.
With regard to the MTD, we cannot say yet if we can submit FRS directly to HMRC under MTD since we're still in the testing phase. As per HMRC, FRS is not part of the MTD pilot. They should let you know once you are eligible for it or you can check this with them directly before April 2019.
UNQUOTE
I have checked directly with HMRC help line - and companies will have to submit FRS returns under MTD in april 2019
So the FRS isn't in the pilot so it can't be tested yet but it's all going ahead in April and it'll be grand.
Annual Accounting anyone ?
I agree entirely. At least those using annual accounting have until their first VAT report after 1 October 2019 to worry about it. By them hopefully a few of the bugs will be knocked out of the system.
That's my plan. Let someone else have the hassle.
AND you get to start at the beginning of an accounting, not some random point in the middle of one. It wouldn't be a disaster but it would be irritating to have to use two software systems in the same year.
I enjoyed reading this with the QuickBooks "MAKING TAX DELIGHTFUL" advert brazzenly on display.
Jaysus - it's all unravelling already. I thought it'd last until March at least.
This is supposed to be one of the leading small business options and they don't even know the rules.
Switch to Annual Accounting and buy yourself (at least) six more months. Change your year end to August and it could be seventeen.
We have just got a client (who is a spreadsheet user) into the pilot scheme who uses FRS and it is clear from the the VAT notice that FRS is not exempted from MTD.
When people join MTD they stop being able to use the HMRC portal. I have done a video which looks at the differences on the HMRC gateway between the MTD system and the old system.
https://www.youtube.com/watch?v=lCjuVhTR1H0
I think there may be similar issues with partial exemption which may mean that some cloud accounting users need to use bridging software.
Don't use QB so just speculating.
But can you add manual adjustments prior to return submission? If its a flat rate scheme then you would gross up the sales and zero off purchases and adjust sales vat to whatever percentage you use
No manual adjustments allowed with MTD, although you might be able to fudge a result.
Depends what you mean by "manual adjustments". Journals are allowed. Re-keying information is not.
Apparently.
Not sure what journals have to do with making entries on the VAT return. They are just part of the "digital journey" of the supporting data.
But that has nothing to do with actually reporting the VAT figures, it's only a bookkeeping/accounting function. There is no opportunity in the MTD submission process to manually adjust a figure on the VAT submission. There is no return as such, think along the lines of an RTI submission.
If you haven't read of notice 700/22, I recommend it.
Eh! I followed what you were saying before, but you're not making sense now. Can you explain what you mean by your last comment?
Sorry, still not following. What have journals got to do with the submission of VAT figures to HMRC? They're a necessary part of arriving at the figures, but nothing to do with the process of submitting them.
The 'digital' requirement might be over-stated.
Of course we can make keyboard based entries to the chosen digital accounting system - journals et al. I think those are the ordinary 'manual adjustments' people are discussing.
Of course there will be no opportunity for further adjustments between the digital accounting system and the MTD submission.
Exactly. You've explained it better than me. Should be simple enough for Lion to follow ;-)
It is the submission of FRS returns which is not live.
I am confused by this statement. One of my clients has done an FRS return as part of the open pilot scheme (additionally a client that pays VAT via direct debit). They only use spreadsheets to do their accounts.
FRS is very obviously live as part of MTD.
If you remove the authorisation from QB for that client using the page which grants authorisations, you can then authorise a bridging supplier and use the bridging supplier to submit the return. As QB is not authorised then whatever they send to HMRC will be automatically rejected.
Alternatively you will depend on QB being ready in time. FRS is quite a fiddly thing to do software wise. If I were you I would have a back up plan.
I will help you through this if you want.