D V Fields
Member Since: 7th Dec 2013
7th Nov 2017
What does the 'S' stand for in OTS?
12th Oct 2017
I'm not sure the "cloud based" systems offer the functionality that charities require. I am certain that they claim they do. Evidence suggests otherwise. One "popular" system offers a "SOFA" code as its cutting edge technology. In reality it's a field to enter 1 to 23 to represent line items on a report - be impressed if you will!
If a charity has anything more than unrestricted reserves then it may well need to produce a trial balance per fund (or even per project). Much will depend upon the complexity and the risk of unrestricted costs being met out of restricted cash funds. Traditional accounting systems will not provide a trial balance per fund and the few systems geared towards charity accounting are not perfect.
A charity with high overheads, restricted funding and limited free reserves is in danger of funding those high overheads from restricted cash balances, being a misappropriation of funds. It is important that trustees recognise this and the importance of (discussion for another day) full cost recovery.
Sadly many are oblivious to these complexities and sometimes ignorance is bliss. But of course "MTD compliant software" will solve this overnight - surely?
12th Oct 2017
Is budgeting worth the effort?
If you have to ask the question; think again!
20th Sep 2017
The Rogue wrote:
Will we need to spend several hundred thousand pounds on a nerw system so that we can fill in our VAT Return?
Not unless you want to. The only thing your current software solution (MSDOS and spreadsheet) appears not to do is transfer data to and from HMRC. I would hope that a solution to that is found before too long - although I guess the software companies won't be interested in providing it.
20th Sep 2017
All I can say that accountants and the clients better be very computer literate as else it will crash spectacularly.
The fact that my IT programmer clients have great difficulty using cloud based accounting software does not strike me with confidence.
Then again not a slouch but I am not an Excel or IT specialist and to old to go back to school just to drive MTD.
Too much too soon.
The users of the spreadsheet being computer literate is not the issue.
The spreadsheet design requires to be robust enough to withstand the attacks (accidental or otherwise) on its integrity – the same for any system. To make the grade it would have to pass the HMRC testing procedure. I would say that most good experienced and competent users of Visual Basics for Applications (VBA) for Excel could (maybe with help and lots of effort) navigate their way through the testing and write the code to make the connections.
I would expect (hope) that your IT clients could also navigate their way through this too, as this should be part of their skill set. The fact that your IT clients have difficulty with cloud based accounting software is probably due to a lack of understanding of accounts in general.
The point is I believe Microsoft Excel has the capabilities; whether anyone tests it out to prove it is another matter entirely.
20th Sep 2017
Matt Bailey wrote: “Would using a spreadsheet to maintain the records, and then manually typing the nine VAT values into the HMRC portal, be considered a “set of compatible software programs” meeting this requirement?”
I think we can do better than that!
Functional compatible software means a software program or set of compatible software programs which can connect to HMRC systems via an Application Programming Interface (API). The functions of the compatible software must include:
• keeping records in a digital form as required by the regulations
• preserving digital records in a digital form as required by the regulations
• creating a VAT return from the digital records held in functional compatible software and providing HMRC with this information digitally
• providing HMRC with VAT data on a voluntary basis
• receiving information from HMRC via the API platform in relation to a relevant entity’s compliance with obligations under the regulations
I am sure all of us would recognise that Microsoft Excel can meet all of the above but have doubts about this API thingy. My understanding is that the API is the means by which the two systems have to communicate between each other to both send and receive data. So if Microsoft Excel can meet this requirement then it is – and can be – MTD Compliant.
This API thing appears to come (or be supported) in several languages (Java, Scala and Node.js – whatever they may all be) and consists of commands like GET, PUSH, POST, DELETE and OPTIONS.
The trick seems to be to log on, carryout authentication and then send and receive data. Hardly surprising.
A few internet searches suggest these commands can be written within the Developers VBA section of Microsoft Excel.
Now clearly it must be more complex than this because the accounting software industry have spent hundreds of thousands of pounds on this. Or perhaps they are just stupid, inefficient and lacking business sense. (Answers for our continued amusement welcomed).
13th Sep 2017
Whilst the new directions should be generally welcomed you only have to examine a few sets of published accounts on the Charity Commission website to realise that many examiners, despite using the standard examiner's report, are unaware that there were ten directions; now they are unaware that there are thirteen directions plus two other issues to consider.
The most despairing are those from the big firms who start their report with "We" and no doubt are now wondering what on earth am I talking about!
10th Sep 2017
Amongst many things HMRC have to abide by their "Your Charter" which point 1.2 indicates they will not cause unnecessay costs to the taxpayer. Possibly - I say possibly because I am not sure HMRC know of its existence - why spreadsheets are acceptable as a recording tool.
Sadly for now let's leave their misguided reasons for MTDfB to one side.
I do not have inside information so I can only go on reputable sources. Earlier in the year MTD was criticised by one of the Select Committees (one of those groups anyway) for not having provided enough specification as to what was required. The best I have seen since is this will indeed be the three line summary for eligible entities and ( not substantiated but probable ) a mini SA103 form. If correct then at some point in the process a table is required to hold the relevant data. Microsoft Excel is capable of achieving this. If Microsoft Excel meets the requirement of being able to link with the API to transfer data to HMRC then what can be the objection? I am not a great fan of Microsoft Access; not overly convinced by cloud based product but accept they have a vital role to play, but these are not reasons for barring those solutions.
You mention HMRC want software that meets MTD testing. Again without inside knowledge I have not seen this confirmed and most definately have not seen the "testing" specification. I am sure with a detailed specification we could design our spreadsheets accordingly. Firstly the three line summary or SA103. Generate a table and populate from required data sources.
Other tests? The "prompts and nudges?" Let's speculate on what these might be:
"Are you sure that figure is correct?"
"You must include those cash sales you keep leaving off the return."
"Your rent figure is higher than last quarter - are you sure it is correct?"
"Your rent figure is lower than last quarter, we think you have falsified last quarter's return and will prosecute you."
"Your invoice numbers are not consecutive - are you trying to hide income - we'll catch you?
I don't see a problem building those in.
How will HMRC verify this, you ask? Two possible options: Tick a box to say you comply, or provide a checklist with determined inputs and expected results and then a tick box to say it complies. I can do that. I don't really see HMRC running the checks themselves - even if they had the resources.
If Excel has the capabilities of interfacing with the API's then I am struggling to see a valid reason for it not being a permissible solution. Maybe we've (I) have been making the assumption that it is not; cannot think of any reason why there would be a rush to dispel such confusion!
On your example, some twenty years' ago the software package I used would warn you if you posted to control accounts and would also have default tax codes assigned to customer and supplier accounts; now granted stupidity has no limits, it seems a shame ( or maybe preceding comment explains) if SageOne hasn't found a solution to that problem. Never been a problem with the spreadsheet solutions. Alas.
9th Sep 2017
The key though is, I believe, the interface table. Whether you use a software package written in whatever language, ultimately you want the key data populated somewhere and then to be able to connect. Maybe I am being too simplistic but the accounting software is going to take the data entered and ultimately report, for example, the three line summary into a database table. Now presumably they have spent thousand on this because they didn't have the foresight to build reporting codes into the accounting structure to facilitate this. I am not saying they should have seen MTDfB coming, if indeed it ever does, but reporting codes is schoolboy stuff. Now once you populated this table - hook up with the API to do what ever is needed to transfer the data. If you have populated the table wrongly, then yes it will ultimately be wrong. However that error can be made equally by the software programmer or the spreadsheet designer; I know who I will trust. Equally, post income to an expenditure code, it may appear right!
I see HMRC checking the three line summary contains three numeric fields to prescribed number of decimal places; maybe that the third number is the first less the second, unless we are talking taxable not accounting. I don't see them testing irrelevant "prompts and nudges" even if they could define them or had the ability. Both you and I could put validation on any excel data input cell for such nonsense. I suspect HMRC are effectively approving the final table not how the data got there.
So whether you have 50 apps or millions of spreadsheets, what matters, in my view, and happy to be shown the error of my ways, is that final interface table. Excel is capable of providing that table. If spreadsheets are to be an acceptable recording tool, as we are led to believe, but it requires some intermediary, what exactly is this intermediary going to do, other than generate the same table to provide the ultimate link to the API? Cut out the middleman.
If you can navigate your way through registering your software with HMRC then I would guess configuring the table in the right format would have been the least of your concerns.
Maybe one for the Excel community at some point.
My thoughts anyway.
9th Sep 2017
Presumably, one concept of the API is to link any Open Database Connectivity (ODBC) compliant database to the HMRC portal to do its stuff. Given that Microsoft Excel is ODBC compliant then why don't we get an API to link to the spreadsheets; job done? Sure the spreadsheet will need to be robust enough to ensure that there is a defined table populated correctly with required summary data ( the three line summary - of which one of them might be a calculation of the others; or the boxes on the VAT return ). Cannot be too difficult can it?