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MTD bridging software

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It looks like MTD is here to stay so what are the options on the bridging software front?  Ive not seen many recent threads on this but I need a couple of options for clients to use.

Thanks.

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20th Jun 2019 09:48

Isn't Making Tax Digital a great opportunity to move to a cloud accounting software? It's unclear how long we will be able to submit through a Bridging software for.

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By AW71
to danstopp1
20th Jun 2019 10:00

Oh pur-lease. Cloud isn't the best solution for everyone and HMRC allow spreadsheets. No cut off date.

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to AW71
20th Jun 2019 10:26

Yes there is no exact cut off however by 31/03/2020 you must have "digital links" which isn't particularly clearly defined by HMRC but it will mean that those using Bridging software will need to ensure all cells are linked etc. I agree that cloud software isn't for everyone. However, it feels like HMRC are trying is to increase the number of companies using accounting software by introducing MTD.

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to danstopp1
20th Jun 2019 11:12

Digital Links are clearly defined on Vat Notice 700 22. (Para 4.2.1)

You should be aware of the recent developers email from HMRC which has asked software houses to stop attacking bridging as a solution.

I offer a bridging service (which is free) at:
https://www.vat.direct

Some of my clients are bakeries that use the IBM iSeries for their accounts. They generate a CSV file from the iSeries which then goes into my bridging software and then is sent to HMRC.

This sort of bridging solution is not a short term solution.

Cloud Accounting tends to be quite difficult for people to follow and is not for everyone. I have written a cloud cashbook (which is MTD enabled) as a simpler type of cloud software for that reason. Bridging is actually quite a technically complex process and I am finding that quite a few people prefer the cloud cashbook.

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By AW71
to johnhemming
20th Jun 2019 14:28

Thank you for dispelling the deliberate urban myth being peddled by cloud developers

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to johnhemming
20th Jun 2019 18:04

Sorry John, normally a big fan of your comments.

However I want to raise the old chestnut about recording the cashbook (in Excel or on the cloud) and compliance with MTD legislation.

I trust your cloud cashbook records each supply as required.

Unfortunately this point was raised with a client today. The example given was one payment covers two separate purchase invoices. A fed up VAT inspector disallows it as it does agree to one supply i.e. one invoice (or statement where allowed).

I think bridging software is very useful where there is partial exemption, group scheme etc and I expect this scenario will be with us for a very long time. Also where there is a bespoke system as in your case.

The software houses should not be having a go at bridging software until they are happy their own software is MTD compliant. Also are they not supplying their own bridging solutions.

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to david.bransbury
20th Jun 2019 18:26

david.bransbury wrote:

I trust your cloud cashbook records each supply as required.


The cashbook records each supply as entered by the user.

By this I mean that the user can enter a single payment as two or more records for each invoices. The cashbook is balanced back to the bank account (and separately petty cash and any other source of funds), but I am not trying to do an automated bank reconciliation. These small businesses have a really small number of transactions and it is so easy to reconcile to the bank that there is no advantage to having to learn how to use an automated system.

I wish to understand myself what the legal requirements are under MTD which is why I find these discussions particularly helpful.

I like to write useful guidance and produce videos as to how the software should be used so that it is normally used in accordance with the law. I have not as yet done that, however for the cashbook - there is one video, but it is really superficial.

Additionally there are the technical points that:
a) It must be possible to record sufficient details in the digital records to comply with the law otherwise I (and other software bods) should not be offering the service (even if is is free).
b) Ideally where it is feasible the system should validate the data to ensure that it is compliant with the law. That is a bit difficult given that the computer can only go by what it has.

Hence this issue about supply is a critical one.

The level of detail at which retail sales need to be entered is also an issue. I am not sure that the vat notice 700 22 is that clear on this point.

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to david.bransbury
20th Jun 2019 19:21

Thinking further on this, however, i remember reading an ECJ judgment recently on documentation for inputs and I would think that this would imply that disallowing an input on the technicality of not recording each supply where to supplies are paid for at one time would probably not succeed at that point.

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20th Jun 2019 09:50

I have been using BTCHub for a while and it works great. I also recommend MTDfVAT for some of my clients. I haven't had any problems with either.

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20th Jun 2019 09:54

VT MTD for Excel. Submit a VAT return from any Excel workbook in any format. Exceptionally simple to use.
www.vtsoftware.co.uk/mtd

Philip Hodgson
VT Software

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20th Jun 2019 10:43

For our clients who do their own VAT returns, we have gone for the Absolute Excel VAT filer at £40 p.a. for up to 10 companies. https://www.absoluteexcelvatfiler.co.uk/

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By johnt27
to jon_griffey
20th Jun 2019 11:43

Us too!

However, I do think bridging software has a life span, but it's as yet unclear how long. My read of the MTD4CT requirements and the need to submit transaction level data will put pay to some, possibly all, bridging solutions. Until HMRC get their act together and flesh out what's needed it's difficult to predict and it's not an insurmountable challenge in excel to provide the necessary.

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to johnt27
20th Jun 2019 12:00

For VAT Bridging will always be a solution (as confirmed by HMRC) for some taxpayers such as the example of the bakeries I cited in this question.

At the moment the Corporation Tax API for MTD is not publicly specified. An MTD interface has two aspects technically. One aspect is how the authorisation is done and the other is how data is transferred.

All of the MTD interfaces use OAuth2. Most of the MTD interfaces transfer data using json (JavaScript Object Notation). However, the customs systems use XML.

One question HMRC have not answered is whether they would intend to shift Corporation Tax from XML (iXBRL is a form of XML) to json.

I would find it odd if they did. The FRC has standardised on defining corporate taxonomies using XML. Hence if they shift CT through to json they would be moving away from this. It then also raises the question as to what happens with Companies House - although iXBRL there is voluntary.

I have not managed to find any good source of information on the proposals for corporation tax so I cannot respond further on that. It would be good if you could give a link to anything authoritative on that.

When it comes to VAT unless the UK moves down the route of SAF-T (which oddly enough is also XML) the json interface is here to stay. SAF-T does involve transaction level reporting. This can, of course, be done using json.

However, once digital links are in place there is no real need to have transaction level reporting.

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By johnt27
to johnhemming
20th Jun 2019 13:31

johnhemming wrote:

I have not managed to find any good source of information on the proposals for corporation tax so I cannot respond further on that. It would be good if you could give a link to anything authoritative on that.

Nothing authoritative I'm afraid just my interpretation of what may be required in the context of what is the current state of play and what other countries have done or are doing.

You could theorise all day long on this but I personally don't think HMRC have a plan at present (they have a vision) and plenty of other distractions.

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to johnt27
20th Jun 2019 14:19

If you'd read the MTD for VAT requirements at the same stage in the MTD for VAT development cycle, they said more or less the same thing, then HMRC were unable to implement it and the requirements changed to this idiotic system.

There is no reason transaction level data can't be sent via bridging software, that's a baseless assumption. It can't be sent via the current existing bridging software obviously but if HMRC ever actually manage to assemble an interface capable of receiving the data, I'm sure someone can construct software to send it.

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to Duggimon
20th Jun 2019 18:23

The customs API has functions where HMRC can make requests electronically for information and give status updates. There is no reason why this could not work for other things.

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20th Jun 2019 12:39

I recommended Taxcalc's offering to a client and she came back with positive feedback. Annual price £16.67 + VAT for one business.
https://www.taxcalc.com/businessVat#Versions

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By comsci
21st Jun 2019 08:01

For a free forever solution that works with any .xls type spreadsheet (Excel or OpenOffice), you could suggest 100PcVatFreeBridge.

It's a standalone Windows PC app, so no spreadsheet 'plugin' required and no need to hand your data over to the cloud.

Only requires that your spreadsheet is marked with named cells to provide the digital link, so minimal setup and no 'lock in'.

If you're uncomfortable with the longevity of a relatively unknown free app, there's nothing to stop anyone using it for free for a few years to wait for the MTD dust to settle and then plump for whatever solution appears best at that time.

Disclaimer. Completely biased opinion because I'm the author :-)

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21st Jun 2019 08:47

@johnhemming To correct you, the iSeries has been replace with the IBM i for over 13 years. Our MTD bridging software runs natively on the IBM i and plugs into any software package running on the IBM i. Our clients will never go to the cloud, why should they when they run on the most reliable server out there

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to Andy Youens
21st Jun 2019 09:43

I started programming on the System/34 (in 1981) so it takes me a bit of doing not to say AS/400.

Any MTD software has to use the internet at some point, however.

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21st Jun 2019 11:12

I'll recommend my own bridging solution... Easy MTD VAT (https://easymtdvat.com). It is one of the simpler solutions to use and you won't need to mess about with your spreadsheet - just import the 9 VAT figures located in your Excel spreadsheet (or CSV file) into Easy MTD VAT, click Submit and you're done.

When you sign up for an account with us you get a complimentary submission token to enable you to submit your first VAT return without cost. From then on submission tokens cost as little as £0.99 per return and we throw in great support and regular software updates.

In relation to the comments on here regarding the longevity of bridging software, I think what johnhemming states is true in that it is here to stay - purely to cater for the thousands of businesses who still use spreadsheets and bespoke accounting systems that are not MTD compliant.

Anyway, we raised the question with HMRC on whether bridging software is a long term solution almost three weeks ago (and are still awaiting a reply). Hopefully we can confirm whether the rumours being thrown about are indeed true or, as we suspect, just an urban myth! Watch this space!

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By Dazboj
24th Jun 2019 23:10

I’d also like to tell you about my MTD offering.
If any of your clients use Apple Mac computers (Or even iPhone/iPad) then VAT MTD for MacOS or iOS is available on both Apple App Stores.
It’s the only bridging product available that can import data from Apple Numbers spreadsheets, yet it also supports Excel and CSV.
No data is stored, no data is sent to a server, it simply communicates directly with HMRC and has passed Apples strict privacy rules.

We even offer a free Numbers spreadsheet template.

Direct App Store links can be found at https://vatmtd.com

I’d also like to debunk a few myths by pasting this text from HMRC’s last MTD developer email:
“While we welcome all of your assistance with raising MTD awareness we have also received a small number of complaints about some developer material suggesting that bridging products will be unsupported after 2020. This is incorrect, we have no plans to stop supporting bridging solutions.”

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25th Jun 2019 09:22

This has turned into a sales thread...zzz

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