VAT Group and MTD

How will MTD work with a VAT Group when members of the group use separate accounting systems?

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Has anyone seen details of how will MTD work within a VAT Group? This does not seem straightforward where members of the group use separate accounting systems which are not linked. 

Is this really going to happen in April 2019? This leaves insufficient time in my view to test new software releases from different vendors across a large group of companies, where IT projects are not as simple as downloading and installing a new piece of software in five minutes, as may be the case for a small business. 

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By GW
09th Aug 2018 09:46

This is why they can't outlaw spreadsheets.

Unless someone has developed something specific I expect the only solution is linked spreadsheets to combine the output from the different accounting systems and then file the return.

Thanks (1)
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By Karina.Harley
09th Aug 2018 11:48

Hi there,

Karina from Clear Books here. I can share with you how MTD works within special VAT schemes such as VAT Group for us.

1. Enter data into a HMRC recognised software
2. Download a CSV export
3. Make adjustments and calculations in Excel/Google Sheets or with Pen & Paper
4. Create a journal entry that reflects those adjustments in the HMRC recognised software
5. Prepare, check and submit the VAT return using the HMRC recognised software

To summarise, MTD allows for adjustments can be processed outside the software, and journaled back in. I hope this gives you some more information to work with!

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Replying to Karina.Harley:
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By cbp99
09th Aug 2018 12:06

Alternatively -

1. Prepare accounts using pen and paper
Edit 2. Scan records to make them digital
3. Prepare, check and submit the VAT return using HMRC recognised software

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Replying to Karina.Harley:
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By cbp99
09th Aug 2018 12:25

To Clear Books
Are you sure that a manually entered journal (step 4) counts as a "digital link"?

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Replying to cbp99:
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By Karina.Harley
09th Aug 2018 12:37

Hi there!

Take a look at Example 7: https://www.gov.uk/government/publications/vat-notice-70022-making-tax-d...

The example given by HMRC is that a business can use API-enabled accounting software and spreadsheets together by recording all sales, and purchases, and expenses in a digital format in the API-enabled accounting software. This software is able to prepare the VAT Return. However, the business uses a spreadsheet to calculate adjustments (e.g. partial exemption calculation). The calculations in the spreadsheet are not required to be kept digitally in functional compatible software, the business can type the adjusted figures into its API accounting software.

I hope this helps!
Karina

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Replying to Karina.Harley:
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By cbp99
09th Aug 2018 12:45

Thank you. And also I note para 3.2.1.2

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By paulwakefield1
09th Aug 2018 12:01
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By Arnie Ayton
14th Nov 2019 16:41

We noticed this is a big problem, particularly when each entity / cost centre uses different accounting systems.

If you are truly going to automate 90% of this you need to call the API of the various cloud accounting systems, or access the back-end database of the relevant desktop system. Then, you then need to file to HMRC via a direct VAT bridging solution.

We can some accounting firms without internal software developers if they need a solution to this:

https://www.spondoo.co.uk/our-services/#value-added-tax-vat

https://www.spondoo.co.uk/specialist-services/#group-vat-filing-for-maki...

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