VAT Bridging Software

Will HMRC allow VAT Bridging software in future ?

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We use accounting software to submit VAT returns

A potential client is using bridging software to submit VAT Returns and does not want to use accounting software.  I would prefer them to use Accounting software

I know digital links aspect is going to be reinforced from 1st April 2021.  Does HMRC have plans to disallow the use of VAT Bridging software in future ? 

Any recommendations for Bridging Software.

Replies (5)

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By Duggimon
22nd Feb 2021 12:22

I'm going to say the answer is definitely yes. Or possibly no. Definitely one of those options.

Who knows what HMRC are going to do? It would surprise me if they eliminated bridging software before April 2022, but who knows?

If you really want your client to use accounting software, presumably you have reasons beyond MTD for VAT so why not make the case instead of just trying to scaremonger about incompatibility issues that may or may not exist at an indeterminate point in the future?

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By johnhemming
22nd Feb 2021 13:41

I am pretty up to speed with MTD technical requirements and I have not seen anything that suggests that bridging will not be allowed for VAT or for Income Tax.

Digital links are satisfied with bridging and that is required for VAT and for the ITSA submissions that are more frequent than annually.

The list of Vat suppliers can be found via here:
https://www.gov.uk/guidance/find-software-thats-compatible-with-making-t...

The list of ITSA suppliers can be found via here:
https://www.gov.uk/guidance/find-software-thats-compatible-with-making-t...

On both links you can see which suppliers also provide free software.

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By tom123
22nd Feb 2021 15:48

Once you get above 'joe the plumber' you will find that companies need to use all sorts of spreadsheets and calcs to get to the VAT numbers.

Obviously these companies have proper ledger systems in place, but the idea that you will just be able to 'transmit' from ledgers to HMRC is delusional.

Bridging will be here to stay,

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By NewACA
08th Mar 2021 11:52

Yes, bridging sysems are here to stay, many businesses for a host of reasons need to manually play around with their figures in a spreadsheet before vat submission: eg consolidated vat return for a vat group of companies whose records are naturally spread accross different accounting systems.

Small businesses that do their books in excel benefit from that.

I think you will likely lose a client if you require them to move away from Excel when they are happy with it, and they know they are allowed to use it. We picked up a few clients 18 months ago that said their accountant was trying to force them off Excel, one was a company of £5m turnover.

They were a UK Ltd, related to EU head company, selling into the uk and their German software used across all companies obviously didn't do MTD.

The old accountant tried to move the uk Ltd onto Xero and it was a disaster for them. A meeting with me, explaining how they could use bridging software after excel analysis with the allowed digital links as per VAT Notice 700/22 and stay on their preferred EU software, made me the new accountant!

However, as some firms would, you might be happy to lose such a client,as you might require all clients to use a particular program.

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By tom123
08th Mar 2021 12:14

£5m on Excel would terrify me, I must say.

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