MTD - VAT totals only not full back up entries?

I have reviewed 2 Bridging softwares for MTD and both only pick up totals from cashbooks on Excel.

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I have reviewed 2 Bridging softwares for MTD and both only pick up totals ONLY from cashbooks on Excel. This seems to suggest the VAT return submitted is exactly the same in terms of just the totals with no backups of what goes in to the figures. Maybe the whole point of MTD is to get businesses away from manual cashbooks where addition errors may occur. But if you cant use your Excel spreadsheet correctly errors may still occur. Instead of practices/businesses spending £000s on upgrading softwares etc just get a bridging software to file the VAT returns. Has anyone actually filed any returns under the pilot scheme? Am I reading this wrong? Are these 2 bridging softwares wrong? Thanks. 

Replies (21)

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By Duggimon
21st Feb 2019 14:18

MTD is an expensive, complicated and irritating new way of filing the exact same information with HMRC that we all do quite successfully via their website.

You have not misunderstood the position.

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By GHarr497688
21st Feb 2019 14:26

This is one of many things that is going to crop up. I have a client who does a spreadsheet that never adds up. If I just use bridging software to pick up the 9 box's on the VAT return is that classed a digital link ? The other concern is that with software I feel sure clients who do not understand software will become confused with flagging and dates leading to huge VAT errors. I have explained this to HMRC and they say they didn't realise this and will get back to me . That was six months ago.

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By Mr_awol
21st Feb 2019 14:57

You have misunderstood the requirements of MTD. Submission is only part of the scheme - digital record keeping being the other part.

Digital doesn't necessarily mean software. Spreadsheets will be a better option than the likes of QBO or Xero for many. There are, however, limitations to which businesses can (or should) retain spreadsheets.

Or you can follow the trend to stick everyone on a bank feed regardless of whether its a good idea or not.

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Replying to Mr_awol:
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By GHarr497688
21st Feb 2019 18:13

bank feeds are ok but just to do something because of a crazy law is not really why I went into Accountancy .

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Replying to GHarr497688:
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By Mr_awol
22nd Feb 2019 08:43

GHarr497688 wrote:

bank feeds are ok but just to do something because of a crazy law is not really why I went into Accountancy .

I agree whole heartedly - but unfortunately accuracy, service, and professional values are being eroded by a wave of efficiency, automation, and a fear of being considered old fashioned.

Hence the trend for people to slam everyone on software, charge by DD for tiered ‘packages’ (shudder) and churn out some half arsed accounts because their software provider and a few awebbers all told them that’s what ‘modern, progressive’ firms do

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By DaveyJonesLocker
21st Feb 2019 17:21

It's been said for some time that only boxes 1-9 are being transmitted for now, no other info.

Which begs another question - why bother?

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By david.bransbury
22nd Feb 2019 09:28

HMRC initially did not want spreadsheets to be part of MTD. In 2017 they relented when they listened to the business community.

Bridging software is definitely an excellent when you have just nine boxes to report. However once more info is required such as when MTD for IT or CT comes in or even potentially individual transactional data then more clients will be moving to some sort of bookkeeping software.

My guess is that will not ban spreadsheets and bridging software but make it so complicated that only the extreme diehards will remain.

Regardless if records are kept on paper, on excel or on the latest cloud software clients will always make errors. However what I do like about cloud packages is bank feeds and so at least you get the bank balances correct.

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Replying to david.bransbury:
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By johnhemming
22nd Feb 2019 11:53

I haven't seen any specifications for CT, but I have written all of the IT API interfaces and they can still be used with bridging. Spreadsheets are quite powerful computer programs.

IT, however, does involve moving towards quarterly returns.

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Replying to johnhemming:
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By david.bransbury
22nd Feb 2019 12:23

One part of the MTD programme is for "tax returns to be scrapped". In order for this to happen then dividends to individual shareholders will have to be reported each quarter. This will be then have to be part of MTD for CT.

Of course this could be done in a spreadsheet. However if the bridging software has to be linked to each individual cell on the spreadsheet every quarter then this could get messy and time consuming.

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Replying to david.bransbury:
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By nodrogbir
22nd Feb 2019 15:01

It would cause so many errors in untrained hands I dread to think. HMRC are heading for a BIG shock .

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Replying to david.bransbury:
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By nodrogbir
22nd Feb 2019 15:03

HMRC dream will soon become a nightmare when this is rolled out into other taxes. Once the tax system is improved we could go forward.

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Replying to nodrogbir:
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By david.bransbury
22nd Feb 2019 17:23

This has been discussed on here before. MTD should not be rolled out as clients will make mistakes.
Mistakes happen regardless of the system.
If a client normally pays £5,000 of VAT each quarter, they will certainly query if the new system says £10,000 to pay. If it has £8,000 refund I expect most clients to still raise a query.
The unrepresented business is where the HMRC are going to have the most "fun" with.

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Tony s
By Tony S
22nd Feb 2019 09:50

Am I right in thinking that one could just manually input the info into the 9 boxes on the bridging software? Or do they actually have to be linked to another spreadsheet? In which case I can just manually type numbers into another spreadsheet and link to the bridging software????

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Replying to Tony S:
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By tom123
22nd Feb 2019 10:03

Tony S wrote:

Am I right in thinking that one could just manually input the info into the 9 boxes on the bridging software? Or do they actually have to be linked to another spreadsheet? In which case I can just manually type numbers into another spreadsheet and link to the bridging software????

ssshh! don't tell everyone - that is what I will be doing. (for now, anyway)

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Replying to Tony S:
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By Wanderer
22nd Feb 2019 15:07

Tony S wrote:

Am I right in thinking that one could just manually input the info into the 9 boxes on the bridging software? Or do they actually have to be linked to another spreadsheet? In which case I can just manually type numbers into another spreadsheet and link to the bridging software????

Yes, this will be possible. It WON'T comply with the regulations and expect a slap on the wrist and/or penalties if HMRC ever find out, but yes it is possible.
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Replying to Wanderer:
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By david.bransbury
22nd Feb 2019 17:17

I wonder if you use bridging software you are more likely to get an enquiry as the HMRC will know you could possibly doing this trick?

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Replying to Wanderer:
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By david.bransbury
22nd Feb 2019 17:25

If the HMRC find out it would be more than a slap wrist.

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Replying to david.bransbury:
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By Wanderer
22nd Feb 2019 17:41

Yes but not much has been written about non-compliance. Much has been written about the new points system for late returns and late payment and also the soft landing for these. Penalties for non compliance for the underlying records has received very little publicity other than it won't be subject to the soft landing. In addition we don't know how these will be applied in practice.

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the sea otter
By memyself-eye
22nd Feb 2019 10:11

Too late, you told me - but I like the idea.

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By andy.partridge
22nd Feb 2019 10:15

It is funny that there is an assumption that spreadsheets are accurate. Even the ones that start out that way soon get corrupted when new columns and rows are inserted.

My experience is that clients don’t seem to notice this either through their own lack of time or complacency.

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Replying to andy.partridge:
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By DaveyJonesLocker
22nd Feb 2019 10:24

Garbage in, garbage out whatever system is being used.

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