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MTD & Spreadsheets....all that fuss about nothing

MTD & Spreadsheets....all that fuss about nothing

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Now that a range of simple, low cost and easy-to-use bridging software is beginning to emerge to solve the MTD problem,  all the criticism and scare mongering that has been directed at spreadsheet users is beginning to feel like the millenium bug all over again.  

For those of you still in your accounting nappies and not old enough to remember the millenium bug, the software community of the day, back in 1999, predicted armagedon for everyone who didn't upgrade their computer systems to cope with the year change from 1999 to 2000.  The prophesies of doom grew to a fever pitch as the end of the millenium approached and ICAS even set an exam question on the disaster recover plans CA firms should make to prepare for the fateful day !  When the sun came up on the morning of 1.1.2000, and all the computers still worked,  it soon became apparent that a lot of people had been misled into investing time and money for nothing.

Call me old fashioned, but as the dust begins to settle in the run up to MTD, I for one am glad I stuck to my spreadsheet guns and ignored the marketing pressure to mislead my clients into investing time and money on accounting software they don't need.

 

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By Sue Murby
01st Nov 2018 12:00

It could be that techies the world over were working to prevent Armageddon happening!

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Replying to Sue Murby:
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By Peter Cane
01st Nov 2018 12:31

Don't think so. My wife worked at the time for one of the large US tech companies and was compelled to go into work on 1 January 2000 in case the skies did fall in. They didn't and it was a complete non-event and a total waste of time for everyone. It was completely over-hyped by everyone.

My wife wasn't happy at having to miss out, while the rest of us went out for a lovely new year's day walk.

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Replying to Peter Cane:
Hallerud at Easter
By DJKL
01st Nov 2018 20:02

On the other hand my wife, back then a Stockmarket Quant Analyst with a large bank, spent most of 1999 flying from Edinburgh to London to sit on her then employer's Y2K planning and oversight committee re the database systems they used, and coordinated the user testing of their amended systems, run in parallel during 1999 ,to ensure the various calculations and reports that emanated from these systems would still be accurate and correct.

A lot of work went into ensuring that when you wanted say an index performance report in January 2000, what you got for your money was correct.

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By Accountant A
01st Nov 2018 12:16

(a) As Sue Murby says, the fact that the millenium bug wasn't a disaster was - at least to a large extent - due to measures put in place.

(b) The fact that MTD is only going to cost £x and not £y (assuming that is indeed the case) is hardly a cause for celebration. In fact, it's a typical Government ruse these days to foist the unacceptable onto us.

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Replying to Accountant A:
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By L Haldane
01st Nov 2018 17:00

Believe me, I am not celebrating. There are no winners in this whole MTD saga and I doubt if even the software companies will have anything to celebrate given the amount of competition in the race to produce MTD compliant products.

Like many others I am angry at the amount of time that has been wasted on MTD, and as someone who champions spreadsheets for small businesses, I am especially angry at the lack of information on bridging software and criticism of spreadsheets that has permeated much of the discussion on MTD to date.

Now that bridging software has come out of the shadows to confirm how cheap, simple, easy and unobtrusive it will be to use, I am just grateful that I held my nerve and didn't listen to all the hype about the superiority of cloud accounting.

So no celebration, just anger at the amount of time lost on the lengthy journey that need only have been a short hop to bridging software if those of us opting to keep our spreadsheets hadn't been kept in the dark for so long

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RLI
By lionofludesch
01st Nov 2018 12:47

I think we all still need to bear in mind that MTDforVAT is just the first rung on Jacob's ladder.

When it applies to Income Tax and Corporation Tax, bridging software might not be so easy to produce.

The millenium bug wasn't all that difficult to resolve and the software companies made a mint as most folk solved it by buying new software.

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By nodrogbir
01st Nov 2018 13:06

Ms Middleton strongly recommends that bridging software is not used as this is not what MTD is about.

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Replying to nodrogbir:
RLI
By lionofludesch
01st Nov 2018 13:22

nodrogbir wrote:

Ms Middleton strongly recommends that bridging software is not used as this is not what MTD is about.

Dunno that the Duchess of Cambridge's view carries much weight.

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By Matrix
01st Nov 2018 14:24

I agree. Just met with a client who is happily using VT and uses a bookkeeper to file their own VAT returns.

I said they were looking a bridging software at £40, by the time they file their first return in Sept 19 we will hopefully all know what we are doing and that it should be less painful than setting up an auto-enrolment scheme.

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Tornado
By Tornado
01st Nov 2018 16:15

It does make a mockery of the whole MTD project as whilst allowing the use of spreadsheets with bridging software will enable most people to file easily under MTD for VAT, this has no real relationship to the original MTD plan.

Most people might just as well continue to file through the Gateway as before as this gives the same information to HMRC as bridging software. Indeed, the chances of errors are multiplied using Bridging Software as people struggle to program in the locations of the data to be picked up by the bridging software, which may well be different for each submission.

This compromise is just a load of c**p and adds nothing to the original MTD vision.

At what point does the Government then realise that this is not what MTD is all about and try to get us to use different software all over again.

As the House of Lords said, we are heading for a car crash with this project and we will all suffer for it. The only logical and acceptable solution is to make MTD for VAT (and MTD in General) voluntary for at least 5 years (and preferably 10 years) so that there is ample time for the system to evolve naturally.

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By andy.partridge
01st Nov 2018 16:46

As I recall there was a note to the filed accounts disclosing the amount spent on fighting this imaginary plague.

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Replying to andy.partridge:
RLI
By lionofludesch
01st Nov 2018 16:52

There was indeed.

Most of my clients spent £0.00.

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By possep
01st Nov 2018 17:13

Can anyone recommend some bridging software?

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Replying to possep:
RLI
By lionofludesch
01st Nov 2018 17:28

possep wrote:

Can anyone recommend some bridging software?

Well, aye. I suppose we're coming to the stage where we can make a fair assessment. What's going to be on the market is probably already on the market.

We need an option for spreadsheets for single use that clients can use to submit their own returns and a multiuser option for accountants.

And we need the same for VT if the spreadsheet one won't work with VT.

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Replying to lionofludesch:
Tornado
By Tornado
01st Nov 2018 17:37

"And we need the same for VT if the spreadsheet one won't work with VT"

I seem to recall that VT can suggest/recommend Bridging Software that will work with VT Software.

We will be using the Bridging Software that TaxCalc provide and I have yet to decide what clients will use themselves. I think in the end we will be submitting on behalf of most clients which seems the safest approach to make.

Having said that, I still think there is zero chance of MTD for VAT being mandatory from 1st April 2019.

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Replying to Tornado:
RLI
By lionofludesch
01st Nov 2018 18:03

I dunno. I was surprised how upbeat the HMRC lass was at the Lords Committee last week. Confident that everything was going well and there'd be much more tax yield because of there being no errors and generally demonstrating her ignorance.

Could be a front, obviously.

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By Matrix
01st Nov 2018 19:04

Take a look at Absolute.

If clients already submit their own VAT returns then it will cost more than £40 per annum to pay me to check and submit so they will continue to submit their own VAT returns and buy their own bridging software. I know that is not very commercial but I hate filing VAT returns.

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Jennifer Adams
By Jennifer Adams
01st Nov 2018 17:43

Here is an excellent article on spreadsheets, bridging software and the like:
https://www.taxation.co.uk/Articles/2018/09/18/338592/bridging-software-...

I went from spreadsheets/VT to a cloud based last year purely so I would have a year to get used to the software (thinking that that would be compulsory) and lets just say that it was not an easy ride.
It is saving me time on the loading of the more complicated VAT return clients via inputting of bank statements but I'll not be using it for anyone else. I'll poss wait for the 'bridging' software and see how much that costs for the rest.
I've not told my clients about MTD except for the VAT ones - dont want them worrying for nothing.
By the way... talking of the number of software companies jumping on the MTD bandwagon - did you see how many software providers there are? -
92 according to HMRC's list.

Granted many are inhouse for the likes of KPMG and Deloitte's but there are some I've never heard of.
https://www.gov.uk/guidance/software-for-sending-income-tax-updates#soft...

Anyone heard of or used 'No worries - Simplifi' or Ajaccts'?

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Hallerud at Easter
By DJKL
01st Nov 2018 19:50

I am not as sanguine that say excel cashbook systems/ type systems are compliant, in fact I am still not sure how any form of cashbook system re recording accounting transactions for vat, which does not record each individual paid invoice as a distinct individual digital record, is compliant with the legislation;

The Value Added Tax (Amendment) Regulations 2018
Section 32A- 3

"(b)subject to sub-paragraph (c), for each supply received within the period—

(i)the time of supply,
(ii)the value of the supply, and
(iii)the total amount of input tax for which credit is allowable under section 26 of the Act(1);

(c)where more than one supply is recorded on a tax invoice and those supplies are either—

(i)supplies made which are required to be accounted for in respect of the same prescribed accounting period and are subject to the same rate of VAT, or
(ii)supplies received for which credit is allowable in the same prescribed accounting period,

they may be treated as a single supply for the purposes of either sub-paragraph (a) or (b), whichever is relevant;"

http://www.legislation.gov.uk/uksi/2018/261/regulation/7/made

If the legislation has wanted to allow entries to be made within the digital vat records consisting of more than one invoice, for those who say reclaim input vat via cash accounting and say use excel, it could have been written to accommodate, it has not been so written, it imho does not accommodate.

Am I the only one on Accounting Web with this concern?

Am seriously thinking of attending Accounting Live this month as Heather Elliot from HMRC might actually answer with her understanding of the legislation.

https://accountinglive.co.uk/speaker/heather--elliott

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