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HMRC will retire old online VAT form in April

HMRC has alerted professional tax bodies and software developers of its intention to retire the existing VAT online filing mechanism for VAT 100 forms from April next year.

16th Oct 2020
Editor in Chief (interim) AccountingWEB
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FreeAgent MTD webinar

News emerged of the closure plan during AccountingWEB Live’s Start preparing clients now for MTD webinar on Thursday (15 October).

“There are currently two VAT submission methods,” explained George Grigolava, accounting group product manager at FreeAgent. “The current one is called the XML submission route, where you log into HMRC’s portal, and [the second is] the MTD route. Something not everyone’s aware of is the old method is being decommissioned in April 2021.”

In preparation for the migration of all registered VAT users into MTD for VAT in April 2022, HMRC wants to move everyone away from the old submission route onto the MTD platform.

“As we understand it, HMRC are going to replicate the current portal using MTD technology. Those clients will use backend HMRC technology to submit their returns. But other than that it will be very similar,” Grigolava explained.

New HMRC back end

The ICAEW Tax Faculty offered more background on the move. HMRC’s main system for managing the MTD filings is called the Enterprise Tax Management Platform (ETMP), which is taking over functions that used to be handled by an older VAT Mainframe system.

The online VAT return that businesses can access from their online tax accounts will look different, but have the same nine boxes.

According to HMRC, there are still roughly 32,000 tax agents who have not set up an agent services account (ASA). The Tax Faculty advised them to set up their ASAs by 28 February 2021 to ensure they are able to link their client VAT authorisations to the old agent portal.

The faculty advised business taxpayers and their advisers to ensure that HMRC held a valid email address, otherwise the tax department would be unable to collect VAT payments by direct debit.

Make the move early

So while clients or their agents can continue to enter the nine totals required for each quarterly VAT return via the HMRC form, both the Tax Faculty and FreeAgent encouraged tax agents to move VAT-registered clients onto MTD-compatible software.

Otherwise accountants may need end up filing VAT returns for some clients through the old agent portal and returns for clients who have transferred to ETMP via the agent services account. 

“Once they migrate onto HMRC’s back end it makes it much easier for you to set them up for the April 2022 deadline,” Grigolava advised one viewer in Thursday’s webinar.

Even though he could see the difficulties ahead trying to convince smaller clients to go with new software, webinar panellist Jahan Aslam from Fusion Chartered Accountants supported this advice. “It’s still better to migrate than not, because at the end of the day, compliance is still going to happen," he said.

“We either get them ready, or we keep on leaving it and come the deadline, that’s when the panic starts. So for me taking action now is crucial.”

Replies (26)

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Morph
By kevinringer
16th Oct 2020 20:07

In other words, they manually key the 9 boxes into GOV.UK that then sends them by MTD to HMRC. Don't HMRC realise that there are MTD-mandated businesses that are doing exactly that: keying totals straight into bridging software. I suppose if it's good enough for HMRC it's good enough for MTD-mandated businesses too.

Thanks (4)
Morph
By kevinringer
16th Oct 2020 20:10

“We either get them ready, or we keep on leaving it and come the deadline, that’s when the panic starts. So for me taking action now is crucial.”

Or we apply for exemption on the grounds of digital exclusion. I have obtained exemption for 25% of my MTD-mandated clients. HMRC accepted over 90% of my applications without question. The level of digital exclusion amongst my sub-£85k clients is much greater: about 75%. I intend to apply for exemption for all of them.

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Replying to kevinringer:
RLI
By lionofludesch
18th Oct 2020 16:48

Dunno how that's going to work if they close down the old portal.

Luckily, I don't do any VAT returns now so it's not my problem.

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Replying to lionofludesch:
By Duggimon
19th Oct 2020 09:38

Reading between the lines, when they say "close the old portal" what they mean is "you'll log in to your ASA and do the exact same thing as you did on the old portal, except now the page has a black header instead of a green one".

At least that's how I understand it.

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Replying to kevinringer:
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By Homeworker
19th Oct 2020 10:24

kevinringer wrote:

Or we apply for exemption on the grounds of digital exclusion. I have obtained exemption for 25% of my MTD-mandated clients. HMRC accepted over 90% of my applications without question. The level of digital exclusion amongst my sub-£85k clients is much greater: about 75%. I intend to apply for exemption for all of them.


Don't know how you managed that! I asked for exemption for one elderly client who doesn't use a computer and was refused because we file his VAT return for him. The client wrote to them himself and they relented.
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RLI
By lionofludesch
18th Oct 2020 07:42

What was that about HMRC's back end again?

Needs a good kicking ?

Thanks (5)
Replying to lionofludesch:
Morph
By kevinringer
18th Oct 2020 09:49

lionofludesch wrote:

What was that about HMRC's back end again?

Needs a good kicking ?

I'll be first in the queue of volunteers.
Thanks (3)
By Duggimon
19th Oct 2020 09:41

"So while clients or their agents can continue to enter the nine totals required for each quarterly VAT return via the HMRC form, both the Tax Faculty and FreeAgent encouraged tax agents to move VAT-registered clients onto MTD-compatible software."

Why? Anyone who wants to use bookkeeping software, and benefits from doing so, is already using it. I'll not be advising anyone else to move on to software they have no interest in just because HMRC have moved the VAT form from the old page to the new one.

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By JD
19th Oct 2020 09:46

So is HMRC paying for the MTD software and extra work required for what will essentially be smaller businesses.

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By Ben Alligin
19th Oct 2020 09:48

If you register a client for MTD-VAT that still has outstanding VAT returns yet to be submitted under the old system, my understanding is that you no longer have access to the old system. So how do you file the old outstanding VAT returns if HMRC switch off the old system?
I appreciate that there should be no VAT returns outstanding, but as an agent you cannot file VAT returns without the client's permission. I'm currently in the process of disengaging the offending clients, but HMRC -VAT have never chased the outstanding VAT returns.
Are HMRC just prepared to write off the outstanding VAT returns/VAT due?

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Replying to Ben Alligin:
By Duggimon
20th Oct 2020 08:35

You can't switch to MTD if you have outstanding returns, the sign up process returns an error and tells you to file them first.

Thanks (1)
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By graydjames
19th Oct 2020 09:49

I don't understand what this means - clear as mud as usual.

I have THREE types of clients when it comes to VAT. Those registered for MTD most of which I submit using my software with MTD enabled. Secondly, those under £85k, not registered for MTD, but which I also submit through my software but with MTD not enabled. Finally there are those, not registered for MTD, who do their own returns, mostly on spreadsheets, and who log on to the HMRC gateway and key in the figures in the old fashion.

I take from the article that the third category will no longer be able to log on to HMRC and enter their VAT figures manually. Does that mean they have to either acquire software to submit their returns or ask me to do it - with effect from April 2021? If so, how is that different from them being required to register for MTD from April 2021?

What am I not following here?

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Replying to graydjames:
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By aland
19th Oct 2020 10:25

I think it says that they will still be able to log on and fill in the nine boxes, but on a slightly different page.
"HMRC are going to replicate the current portal using MTD technology. Those clients will use backend HMRC technology to submit their returns. But other than that it will be very similar,”

Thanks (1)
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By raju m
19th Oct 2020 10:00

It would be far better if HMRC spent a bit of time trying to avoid the fraud and dodgy grant and loan applications, job retention claims and self employed claims. Billions of tax payers money is being wasted.

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By ireallyshouldknowthisbut
19th Oct 2020 10:31

So to be clear this headline should say:

"HMRC to slightly update a screen, which is a big deal their end, but the user wont really notice other than it looks a bit different"

Thanks (4)
Replying to ireallyshouldknowthisbut:
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By whiteways
19th Oct 2020 12:12

Having read all of this, I'm thoroughly confused. I do just one VAT return for a client whose turnover is under 85K. Bookkeeping is done on Excel. What do I need to do (if anything)?

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Replying to ireallyshouldknowthisbut:
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By whiteways
19th Oct 2020 12:12

Having read all of this, I'm thoroughly confused. I do just one VAT return for a client whose turnover is under 85K. Bookkeeping is done on Excel. What do I need to do (if anything)?

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Replying to whiteways:
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By Jas28
19th Oct 2020 15:10

I am in the same position - i.e. I have just one VAT-registered client, whose turnover is under 85K, and who uses Excel for book-keeping. The only difference is that they do their own VAT returns by logging on to their business tax account.

Therefore, I am asking much the same thing - i.e. What do they need to do, if anything? Can they still log in via their business tax account, or are they going to need to register for a new account on the new system? In other words, how, in practice, do they "migrate to HMRC's back end"?

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Replying to Jas28:
Morph
By kevinringer
19th Oct 2020 17:21

Until 1 April 2022, your client can continue to log into HMRC online and input their figures manually. Apparently the manual screens will be similar to what we have now, just a different gubbins behind the scenes. I think HMRC are making a big thing of it to try and encourage more <£85k businesses to switch to MTD before it is mandated.

Thanks (0)
Replying to whiteways:
Morph
By kevinringer
19th Oct 2020 17:19

Your client can continue to use Excel. For the first VAT quarter starting on or after 1 April 2022 your client can use bridging software to submit their Excel spreadsheet totals to HMRC. Or your client can email the entire spreadsheet (not just the totals) to you and you use bridging software to submit the VAT totals to HMRC. HMRC are convinced your client is making mistakes such as reversal of figures - and the mistakes are always in the taxpayer's favour.

Thanks (0)
Replying to ireallyshouldknowthisbut:
RLI
By lionofludesch
19th Oct 2020 18:19

ireallyshouldknowthisbut wrote:

So to be clear this headline should say:

"HMRC to slightly update a screen, which is a big deal their end, but the user wont really notice other than it looks a bit different"

No, not really.

It's more like they're going to take the existing screen and hide it. Then the user has to find it.

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By Neil Daws
19th Oct 2020 12:07

What about some MPs scrutiny of what HMRC are up to with MTD?

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By Neil Daws
19th Oct 2020 12:07

What about some MPs scrutiny of what HMRC are up to with MTD?

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David Ross
By davidross
19th Oct 2020 17:20

I stumbled onto this "technology" when we de-registered a client. The final Return ended before it started so TaxCalc could not handle it!

As I was on the phone to the VAT Helpline I came across a page containing the 9 boxes - it was news to their ears!

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Replying to davidross:
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By FayeBK
20th Oct 2020 09:09

I think I've also just stumbled across this myself this morning! Logged in to my ASA to see if a client had been deregistered and it showed a link to the final return where you could fill in the boxes manually.

Honestly it is a relief because some softwares (Sage particularly) seems to really hate non-standard periods.

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By Bill H
19th Oct 2020 18:04

Why can't HMRC leave it until 2023 when everybody has to go MTD anyway? They seem to have too much time on their hands at the moment. They are not responding to any letters with queries because I do not think they are capable of understanding common sense. I blame the accounting bodies in allowing HMRC to call the tune on everything. They have had no impact on changing a thing! I am proud of not being a member of any accountancy body for the last 40 odd years, 30 of them working for CA's in central London! Lots of exam freaks but very few with common sense.

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