Share this content
29

MTD VAT for a complete software novice

Really struggling knowing what way to turn regarding software as an agent new to digital records.

Didn't find your answer?

Before I can begin- please be gentle on me. It's already causing a huge amount of stress and I'm really struggling and any advice on where to go for help/further advice would be so greatfully received. . I'm a sole practitioner with small clients with generally straight forward affairs (anything more complicated I advise clients to take advice elsewhere). All book keeping is done manually- either by myself or in some instances the client. With VAT registered clients I usually get a pile of documents and sales figures quarterly- complete the book keeping and then complete and file VAT return. I use software for corporation tax accounts- PTP accounts, and payroll- IRIS payemaster, but haven't ventured in to the field of software for book keeping/vat as yet. The things I am struggling to understand so that I can find a logical way forward are:

Do I need to a) purchase the software and then use the same software for each of my clients, b) buy separate software for each client c) ask the client to purchase software that I can log in to from my end? I'm so sorry for all these questions I just don't know where to turn. I'm really unsure what is the done thing really.

I have 7 VAT registered clients are with various needs so i'm not sure if it is a case of one software package suits all:

1 florsit retail, standard VAT- sales recorded as daily totals plus eflorist added in.

1 florist flat rate retail- sales daily totals, then eflorist etc added in.

1 hairdresser retail flat rate, 2 hairdressers retail standard rate

1 standard rate company where some sales are exempt.

1 standard rate fencer.

Can anyone recommend a software developer to approach? As we are new to software, as are our clients, the simpler the better really. Ideally one where we can keep the same sort of records as we do now but entering the figures from the invoices into software rather than a book- is there such a thing or am i wishful thinking.

As I said before- please be gentle with me- I'm aware to many these may be really simple questions- and others won't believe we haven't used software at all before- even excel! Absolutely any help would be so wonderful to know what way to turn.

xx

Replies (29)

Please login or register to join the discussion.

Northumberland flag
By MJShone
21st Jun 2018 10:36

Other people far better at IT techy stuff than me will give you proper answers (and correct where I've gone wrong below!) , but just to give you a bit of comfort...
I too have been in a bit of a fog about the practical implications of MTD for VAT. However, I went to a Deloitte presentation last week. It's the best session on MTD for VAT that I've seen by a long way and I now feel I understand a little bit more.
I'm lucky in that we have a Financial Systems team who'll deal with the IT side, making our various systems talk to one another etc etc.
If you can start to "keep the books" in spreadsheets, you should be OK. You don't need any more complicated software than that, except for an API (application programming interface). (I'll come back to the API.)
The principle is that you should be able to enter eg purchase and sales invoice into the spreadsheet and the numbers should flow through into your VAT return without any human intervention, so that there is an electronic audit trail. So your spreadsheet could be set up to take the transactions you feed in and calculate what needs to go on your VAT return. The numbers would be transferred into the online VAT return via the API.
Apparently all of the Big 4 and suppliers like Thomson Reuters are developing APIs and these should be able to be bought (at a reasonable price) fairly last minute.
So what you probably need is someone who's spreadsheet savvy.
The other thing to bear in mind is that there's a 12 month "soft landing" period where we'll be able to sort out any kinks in the system before HMRC start to get tough.

Thanks (1)
avatar
By puds2015
21st Jun 2018 10:51

Thank you- that really does help. It's been years since I used spreadsheets- although I do have excel it's barely touched. Is anyone able to send me an example of how to set up excel to have the right headings that will be required? I could then start 'booking' documents into that each quarter? I feel so useless- i'm really trying my best but keep hitting brick walls. :/

Thanks (0)
avatar
By GW
21st Jun 2018 10:55

The OP is a difficult one to answer given that:

- If the client is under the VAT threshold, you can carry on as you are.

- At present there is no system that can deal with MTD for VAT as it is still being developed.

- We are still being threatened with MTD for business which might start in April 2020, so any system you adopt to comply for VAT may not be the best to cope with MTD for business, but again the software does not exist at present.

Spreadsheets may well be the best solution at present.

Thanks (0)
avatar
By puds2015
21st Jun 2018 12:07

Thank you- this is my worry. As I stated earlier though- I'm even new to spreadsheets. We have excel- would it be a case of completing the book keeping as i do manually now but on a spreadsheet? If so, is anyone able to send me an example of how i should set up the spreadsheet? I feel like i'm drowning

Thanks (0)
avatar
By andy.partridge
21st Jun 2018 12:23

Where are you based?

Thanks (0)
avatar
By SJRUK
21st Jun 2018 12:24

Whereabouts in the country are you?
Maybe the best option would be to get someone in to give you a tutorial on spreadsheets and set you up with an example to start with.
Are there any local accountants you are friendly with who you could ask or maybe a computer savvy youngster you know.
What are you currently using, accounts books and/or analysis pads?

Thanks (1)
avatar
By puds2015
21st Jun 2018 12:42

Hi, based in south east london. Yes it's an option. I use accounting books/analysis pads yes. Put simply- column headings- each invoice/document listed- either gross amount for flat rate customers, or gross, vat, net details for standard rate. Bank expenses with no documents adding in. Any adjustments made then totals put in to VAT return. End of your journal adjustments all done on analysis pads.

Thanks (0)
avatar
By adam.arca
21st Jun 2018 12:51

I haven't done anything about MTDfV yet and, personally, I wouldn't recommend that anyone does. So, inadvertently or not, you've done the right thing so far in my opinion.

The reason is, as others have mentioned, that we still don't know what MTDfV will look like, what will be required, and how it will interact with the putative MTD Business Tax. We can't even be sure MTDfV will happen at all or if it will be delayed or if there will be late concessions to make adoption voluntary to begin with.

With all that uncertainty, how can any small practitioner plan anything?

So, in terms of manual clients at least, I think the best thing to do is wait and see. Once MTDfV kicks in and once we have a better idea of how the spreadsheet needs to be laid out to work with whatever API you get in then and only then will it be worth investing the time. And that's the beauty of spreadsheets over software: they can easily be tinkered with.

So, there you go: LastMinute.com (in my opinion).

Thanks (6)
avatar
By puds2015
21st Jun 2018 13:09

I just want to say a huge thank you to everyone that has commented. You really have helped me feel a bit better- was quite a sleepless night last night. I ummed and ahhed about posting-but i'm glad i did. If anyone is in a similar boat and wants to share what their approach is i'd be so glad to hear, and also if anyone can recommend software at a later date- please don't forget me! My heart says wait and see- as i know everything changes with regards to whats expected- but i also don't want to put my head in the sand and put off the inevitable. All literature seems to be aimed at either those currently using software, or businesses doing their own books etc which only have to buy/learn to use one piece of software- I feel alone as an agent that uses manual books. thanks again- but please do keep commenting if anyone has any more help x

Thanks (1)
Replying to puds2015:
avatar
By andy.partridge
21st Jun 2018 13:25

I think you need to make a promise to yourself to come off the analysis pads as soon as possible. Like now. You risk kicking that tin can down the proverbial road if you don’t take action before it’s absolutely necessary.

Do this, not for MTD, for your own development and for your clients’ interests. Start with something simple, logical and intuitive like Cashflow Manager or Clearbooks spreadsheets (not the full blown on line system).

Thanks (3)
Replying to andy.partridge:
Northumberland flag
By MJShone
21st Jun 2018 13:55

Many years ago, I spent ages getting a very reluctant member of staff to agree to move his accounts prep from the A3 analysis pads he'd used for decades to spreadsheets. It wasn't long before he was breezing into my room telling me the latest thing he'd found out he could do using spreadsheets. He was a total convert.

Thanks (4)
By Moonbeam
21st Jun 2018 14:44

The simple answer is to sign up to Xero. They've got plenty of online demos to train you up. You're ahead of the game as you already understand double entry etc.
Sign up for a demo and do a little bit of home work each night using a client's data to see how it works.
If you were to go ahead, Xero would cost you nothing but your clients would have to pay for their own company's version. There aren't any small businesses I can think of that couldn't fit onto Xero.
It's less hassle for you, as Xero have worked out exactly what needs to be done already.

Thanks (2)
Replying to Moonbeam:
avatar
By reconynge
28th Jun 2018 12:51

Moonbeam wrote:

The simple answer is to sign up to Xero. They've got plenty of online demos to train you up. You're ahead of the game as you already understand double entry etc.
Sign up for a demo and do a little bit of home work each night using a client's data to see how it works.
If you were to go ahead, Xero would cost you nothing but your clients would have to pay for their own company's version. There aren't any small businesses I can think of that couldn't fit onto Xero.
It's less hassle for you, as Xero have worked out exactly what needs to be done already.

Thoroughly agree. As a Xero Partner there are versions of Xero which are not available publicly and which may be better suited for some of your clients' needs. Products like Xero already file VAT returns direct into HMRC, so they are currently developing a proven system into a MTD compliant one. While spreadsheets are all well and good, they are fraught with danger (eg incorrect formula). Also, thinking out loud, what is the point of learning spreadsheets and then having to rely on somebody to create compliant software to bridge spreadsheets (Excel, Libra, etc), getting that approved and, crucially, updating it as new versions of spreadsheets and MTD compliance come along??

Thanks (0)
avatar
By puds2015
21st Jun 2018 14:48

Thanks again guys- I've sent an email to clearbooks and cashflow so I'll see what they say back. Also will have a look at xero- thanks again for the suggestion x

Thanks (0)
Replying to puds2015:
avatar
By Peter Stratton
22nd Jun 2018 07:38

I'm in south east London too, if you want to see some of the software or have a chat then get in touch.

Thanks (0)
Replying to Peter Stratton:
avatar
By puds2015
22nd Jun 2018 10:59

Hi Peter. That sounds very good- thank you for your offer. Are you an accountant/book keeping or software developer- sorry I didn't want to assume one or the other!

Thanks (0)
Replying to puds2015:
avatar
By Chris Morford
28th Jun 2018 12:03

Hi Puds,

Thanks for reaching out to us at Clear Books. We recognise that it can seem a bit of a minefield, but we hope that with guidance and lots of free support and advice, that Clear Books could be just the fit.

Clear Books is 100% MTD Ready. All of our coding (the geeky bit) is done and has been through extensive testing. We are also actively involved in the HMRC Pilot Programme.

Hopefully, a member of my team has been back in touch with you and helped you come up with a plan of action.

Best of luck with it all!

Many Thanks

Chris

Thanks (0)
Della Hudson FCA
By Della Hudson
23rd Jun 2018 07:34

Last year we helped a client to move from immaculate paper books on to Xero. Their bookkeeper (already had her free bus pass) was terrified but keen to make the change.

A month later she already loved the new system. Tech really is quite simple with the right support.

Good luck and keep us updated us on your new, modern practice. (PS the technology can also be used anywhere in the world if you fancy a working holiday in the sun)

Thanks (0)
My photo
By Matrix
23rd Jun 2018 12:27

I don't think there is much point paying for a monthly cloud subscription for clients who are never going to login just because some rules may happen.

I would look at VT (vtsoftware.co.uk). It is desktop based and you would also need bridging software for MTD but would cost much less and is more traditional accounting than cloud software. Once you have bought it you could use it for all clients. There is a company which runs training days or used to.

Thanks (2)
Replying to Matrix:
avatar
By legerman
01st Jul 2018 20:37

Matrix wrote:

I don't think there is much point paying for a monthly cloud subscription for clients who are never going to login just because some rules may happen.

I would look at VT (vtsoftware.co.uk). It is desktop based and you would also need bridging software for MTD but would cost much less and is more traditional accounting than cloud software. Once you have bought it you could use it for all clients. There is a company which runs training days or used to.

Totally agree. I intend to use Nielson James for the bridging software https://www.neilsonjamestech.co.uk/mtdreturn.php which at an annual cost £80 + VAT for 10 clients ain't too bad.

Thanks (0)
Replying to legerman:
Morph
By kevinringer
02nd Jul 2018 09:04

legerman wrote:

Totally agree. I intend to use Nielson James for the bridging software https://www.neilsonjamestech.co.uk/mtdreturn.php which at an annual cost £80 + VAT for 10 clients ain't too bad.

Does this developer intend to make their software MTD compliant? I know Absolute are developing something similar which they do intend to make MTD compliant.
Thanks (0)
Replying to kevinringer:
avatar
By legerman
02nd Jul 2018 10:23

kevinringer wrote:

legerman wrote:

Totally agree. I intend to use Nielson James for the bridging software https://www.neilsonjamestech.co.uk/mtdreturn.php which at an annual cost £80 + VAT for 10 clients ain't too bad.

Does this developer intend to make their software MTD compliant? I know Absolute are developing something similar which they do intend to make MTD compliant.

It's specifically to allow electronic filing under MTD for VAT. It will extract the figures from VTT+ and file them through the API to HMRC. The developer says on his website that the program is complete, and is just awaiting HMRC approval.

Thanks (1)
avatar
By cne333
28th Jun 2018 12:10

Xero - it will completely change your working life!

Thanks (0)
avatar
By SXGuy
28th Jun 2018 12:10

Personally, if your confident doing things manually, I wouldn't over complicate it by learning online software, it's not needed.

In my opinion the easiest transition you could make is to excel since the layout will look very similar to manual record keeping.

I'd not worry about mtd for now, but instead perhaps take the time to get some excel training. Learn formulas etc.

Then when mtd comes all you need is bridging api which will be available in the future.

Thanks (1)
avatar
By Andrewmoore777
28th Jun 2018 12:28

In many respects I'm in the same position as you. I act for about 8 different clients (some VAT registered some not).
I bought QuickBooks several years ago. I can keep all my clients on QB with that 1 set of software - there is no limit on the number of different clients. The software is comparatively inexpensive. I have not yet gone onto the Cloud although that is possible.

I have not got to grips yet with QB's proposals for MTD but I know they are on to it.

Thanks (0)
Morph
By kevinringer
28th Jun 2018 13:31

MTD from April 2019 will only apply to VAT registered clients over the VAT registration threshold. HMRC say MTD for income tax won't start until 2020 at the earliest. HMRC haven't said what the turnover limits will be but they're likely to be the VAT registration threshold initially.

MTD requires the digitisation of all transactions. You don't have to take photos of all your invoices. You don't have to use cloud software: Sage have said their desktop software will be MTD compliant. You can even use spreadsheets if you also have MTD linking tools. The problem with all this is the linking tools are not yet available nor is any MTD-VAT approved software and only four companies have had MTD-income tax software approved. There were 28 companies involved with MTD initially and HMRC say many are still developing products. At this stage I'd be reluctant to commit to any product because most of them are not yet in the market and everything could change.

We've partnered with QuickBooks who have given us 100 free licences. We buy in further licences and charge our client.

We have an agreement with Sage that is different. Sage cloud products we buy the licences and re-sell to our clients (it's up to us how much we charge) but with Sage desktop we tell Sage and Sage bill the client (£10/month) and collects payment and sends us £2/month 'thank you' (or will do once we start doing it). But that's only where the client needs access. If the client doesn't need access then maybe the answer is for you to buy a Sage 50 client manager desktop licence. I think you can have up to 25 clients on the licence. This has bank feeds and can file VAT returns.

So far I am not pushing software onto my clients just because of MTD. I have a number of clients who would benefit from using software for commercial reasons and most of them I'm putting into Quick Books Online, or Sage desktop. I've decided not to push all my clients because the MTD goalposts have moved in the past and may move again and I don't want to go to the hassle and cost of teaching hundreds of clients software that might not be essential. I know this may mean I've got a lot of work to do in spring 2019, but it's a risk I'm taking.

Thanks (1)
avatar
By richardterhorst
28th Jun 2018 13:59

I use Quickbooks. s simple.

I have a bulk license, its cheap, and bill the client actual cost to me. That is no markup.

Helps me and I can get them to enter data themselves so I just fix the odd error.

Any cloud software will save you huge time.

Xero is also good.

Thanks (0)
avatar
By Suffolker85
11th Jul 2018 17:22

Will the current manual way of entering the VAT figures on the HMRC website still be possible after April 2019 for those below the 85k threshold please? I wasn’t sure if they would be withdrawing it or not

Thanks (0)
Replying to Suffolker85:
Morph
By kevinringer
13th Jul 2018 10:08

There was talk of businesses doing it via their BTA which agents do not have access to. But HMRC have said on one of their webinars the existing GOV.UK process will be retained for those with turnover below £85k. I don't know how this will work for seasonal businesses. Will HMRC impose a threshold of £21,250 which will cause problems for seasonal businesses with most of their turnover during the summer. If HMRC decide to impose it cumulative it could mean businesses with >£85k might be able to file via GOV.UK for a few quarters.

Thanks (1)
Share this content

Related posts