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MTD and timing

Im meeting a potential new client on Monday who, whilst small, has a quite complicated, bespoke, income software system. This isnt adaptable to be a full accounting system. 

 

He currently uses a manual system for expense recording and bank reconciliation. VAT outputs are taken from the bespoke system quarterly report. 

He is looking at Xero for his full accounting system, quite how we will get the income recorded without retyping, I dont know, thats one of my concerns 

 

The second is timing. His year end is 30th June. It makes perfect sense to bring this Xero system in from 1st July. Will that plan be considered as making  progress towards MTD?

 

Does anyone even know?

He is 75 so I could request an exemption to be used for one quarter! Although he is fully up for it actually, so long as the changeover is practical and doesn't shaft the time he needs to spend on actually making money.

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02nd Feb 2019 16:52

You could, of course, using bridging for the first quarter and then move on.

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to johnhemming
02nd Feb 2019 17:12

You are right of course but then we will have to prepare that quarter on Excel, so that will mean we have to do it (at cost) whereas he can do the manual himself. He has no technology experience beyond his booking/income system and email/internet.

Not impossible of course, but a lot of faff for whats supposed to be an initiative thats going to cost businesses very little.

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02nd Feb 2019 17:11

I'd just run with it for one quarter.

The guy's making a genuine attempt from 1st July and there are no penalties in the first year.

Apparently.

On the other hand, I think you have a good case for exemption for a bloke of 75. HMRC may not agree, of course. The weakness of your case is "he is fully up for it".

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to lionofludesch
02nd Feb 2019 17:16

I agree. I also think on principle he wont want me to apply for him.

He is an example that believes software might help him and help him pass the business to successors. I think he is right from our inital discussion.

I can do it from 1 April but I think it will more likely end up a mess, happy to be told otherwise.

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to Kaylee100
03rd Feb 2019 07:31

In the end you are probably right.

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to Kaylee100
03rd Feb 2019 07:32

- duplicated post

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03rd Feb 2019 10:52

What's his VAT date - any help there?

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to bernard michael
03rd Feb 2019 11:49

No, sadly. 31/3, 30/6, 30/09, 31/12.

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to Kaylee100
03rd Feb 2019 22:20

You can change the stagger period.

Bit late, mind you.

Or you could go for Annual Accounting.

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to Kaylee100
04th Feb 2019 09:30

AIUI

There is, in fact, no requirement for full digital links until April 2020 so you could just type the values into a spreadsheet and use bridging software.

This is the relevant VAT notice.
https://www.gov.uk/government/publications/vat-notice-70022-making-tax-d...

See example 5
"During the soft landing period between 1 April 2019 and 31 March 2020, HMRC will not require a digital link to exist between the non-API-enabled software and the spreadsheet. However, all information must be transferred between software programs using a digital link for VAT periods commencing from 1 April 2020."

Your client is supposed to store the expenses information electronically, however. In the end, however, if your client is going in the right direction it should be OK.

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03rd Feb 2019 23:21

Kaylee I would just use bridging software for first quarter, then your Xero going forward

The bespoke software he uses for income must have some sort of export on that you can get into Xero without too much headache

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04th Feb 2019 12:58

Interesting meeting today. By way of an update.

I have a new client - that's the first good news!

Secondly he had been told "he had to use Xero" (and that wasn't by Xero themselves). Turns out his bespoke package can do everything except bank downloads and MTD link of the VAT return.

So, we will use that system and reconcile to bank statements. His software writer has agreed to csv the VAT report, so we will use bridging software for that.

Its not a workaround because his income side is very complicated and works and an off the shelf solution wouldn't be able to handle it.

I am returning in a couple of weeks to start the on 2018/19 as we are going to use the system for the current years accounts and check to the manual record as a sort of pilot. That answers the first quarter problem too.

As for an age exception - apparently he was once in computer systems. My exemption application might well have failed any close scrutiny!

Goes to show how age exemption is actually discriminatory - there is this guy (75) completely able and a 50 ish client also rang me this morning almost in tears as she struggles just sending and email and uploading the monthly figures. Luckily, their turnover is currently under £80k and likely to remain so, so she can avoid it.

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to Kaylee100
04th Feb 2019 14:46

Heres a page on one type of CSV file that will feed into MTD
https://www.vat.direct/workflow/w/standardform/DigitalLinks

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