MTD-VAT: Details start to emerge

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Matt Bailey
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Aegia Cloud Systems
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The government has published proposals concerning the introduction of MTD-VAT. This new information outlines how it expects the new system to operate, including details of voluntary data businesses can submit to support their VAT returns and calculations. Matt Bailey, founder of Gbooks, looks at what we’ve learned from these new proposals.

The government has set out some proposed changes to legislation to regulate the new VAT-MTD system and to make it mandatory for certain businesses. The deadline for responses is 10 November, with the government aiming to have new regulations in place by next April.

The information available on MTD-VAT prior to last week was sparse, but what we knew was outlined in a previous article. So what fresh information can we glean from the new document?

When will the new rules come into force?

The new regulations will come into effect on 1 April 2019. So the businesses affected (i.e those registered for VAT with turnover above the VAT registration threshold) will be required to keep certain information in digital format from that date. They will also be required to submit any VAT returns starting on or after 1 April 2019 via the MTD system.

What information will businesses be required to keep in digital form?

Businesses will be required to keep their “designatory data”, information about supplies made and received, and details of the VAT account in digital format.

The designatory data is the business name, principal place of business and VAT registration number, plus details of membership of any VAT schemes.

The information about supplies will include details of individual sales and purchases, including relevant tax dates, splits between different VAT rates or treatments (i.e. standard rate, reduced rate etc), and a breakdown of invoices and the VAT rates charged.

The VAT account provides an audit trail between the primary data and the values in the VAT submission. It will include adjustments such as corrections from previous returns, changes in consideration and relief for bad debts. Only the totals for each item are required to be kept digitally.

What information do businesses need to submit to HMRC?

Businesses are only required to submit the same (nine-box) information contained on the current VAT return. The VAT return frequency will remain the same, and those submitting monthly or annual returns can continue to do so. The deadlines for submission and payment will remain unchanged, although the government may review this if and when quarterly reporting becomes mandatory.

Can businesses submit additional information?

Businesses will be able to submit two new pieces of voluntary information - periodic updates and supplementary data to support their VAT submissions.

Periodic updates are additional VAT submissions, covering say one or two months, that can be submitted between mandatory VAT returns. The chances of businesses wanting to do this are low as the rules stand now, although these submissions will be a way of notifying HMRC of changes in designatory data such as a new address. These voluntary submissions won’t create a VAT liability or refund, and the mandatory VAT submissions will still be required in the normal way.

Businesses can also submit supplementary data, on a voluntary basis, to support the calculations behind a VAT return. The government will set out more details in the legislation, but it envisages this data being the relevant items from the VAT account (see above).

What about businesses below the VAT threshold?

Businesses with turnover below the VAT threshold can opt into MTD, and then opt back out again later. In both cases they will need to inform HMRC in writing.

What happens if turnover rises above the VAT threshold?

Under the current proposals, businesses under the threshold must monitor their income (i.e. the rolling total for the previous 12 months) and will remain outside the MTD requirements in say, March, if income was below the threshold in the twelve months to the end of February. Once a business is mandated to use MTD it cannot drop out again, even where turnover falls back below the registration threshold.

So do we need to press for any changes?

While many accountants have objections to MTD in general, there are some specific areas of the government’s proposals that raise concerns.

One is what happens when a business breaches the registration threshold part way through a VAT period? The digital record keeping requirements seem to start immediately, and the current VAT return (some of which would cover the period before MTD became mandatory) may also need to be submitted using MTD software. This could force the business to change software overnight, and possibly copy data from the old system to the new.

Another concern is a lack of clarity on what software businesses can or will be required to use. The condoc says a business caught by the new requirements must use “a software program or set of compatible software programs which can connect to HMRC systems via an Application Programming Interface (API)”. 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?

About MattBailey

About MattBailey

Founder of Aegia Cloud Systems (Gbooks), the leading cloud-based tax and accounts system.

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19th Sep 2017 10:54

So basically, type in 9 numbers into a new system = compliant.

And no interaction with SA or company records.

It looks increasingly like a straight replacement for the current (quite decent) VAT system with no genuine benefits apart from people selling software with "MTD" written with a Sharpie on the side.

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By Char
to ireallyshouldknowthisbut
20th Sep 2017 15:30

ireallyshouldknowthisbut wrote:

So basically, type in 9 numbers into a new system = compliant.

And no interaction with SA or company records.

It looks increasingly like a straight replacement for the current (quite decent) VAT system with no genuine benefits apart from people selling software with "MTD" written with a Sharpie on the side.

Amusingly, the big 4 firms who consult to the government informed them of the perks of the Australian tax system - what the MTD system is being modelled on. If implemented to that degree, the government will have precedence access to all financial information of all businesses in the country in a time where the government has increased its snooping power and decreased data security. If we then consider HMRC have asked a select few software firms (mainly with connections to the Big4) to work with them in the development stages, we can see the blatant abuse of power by those dominating our industry (and those related). Oh, and lets not forget those cronies in government who's real aim is definitely not to improve the calculation and collection of taxes but having access to all that information.

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By Tornado
to Char
20th Sep 2017 16:08

You are right.

We must always remember, however, that this is a democracy and the Government are appointed by us and work for us, something that is often overlooked.

If we do not agree with something that the Government does, then we should say so in great numbers and provide good reasons for our concerns, particularly if there is a possibility of corruption involved.

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to Tornado
20th Sep 2017 18:11

Count me in. Where do I join?

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19th Sep 2017 15:29

So there will be a mandatory legal requirement to keep supporting records for your VAT return in an MTD compliant form of HMRC's choosing, but which is as yet unknown?

These MTD compliant electronic records won't be transmitted to HMRC, indeed HMRC are unlikely to even ask to see them as any subsequent VAT inspection will most likely want to see the source paper records.

So basically, business with turnover above the VAT threshold are being mandated to go to additional expense and hassle of changing their current systems to benefit absolutely nobody except the software providers, who can get together and happily jack up the price of their offerings knowing there's no way around buying from one of them.

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By Tornado
19th Sep 2017 17:21

in this AWEB article -

https://www.accountingweb.co.uk/tax/hmrc-policy/finance-bill-2017-19-wha...

- there is a suggestion that -

"However, there is a new exemption from digital record keeping for businesses whose turnover for the previous 12 months is below the VAT registration threshold."

This seems to suggest that immediate use of MTD software may not be required when a trader exceeds the registration limit.

Still confusion all round it seems.

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20th Sep 2017 08:00

Any news on specific VAT schemes such as Second hand cars or TOMS? The latter is complex on any system.

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20th Sep 2017 09:43

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!

HMRC state:
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).

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to D V Fields
20th Sep 2017 10:27

Can I jump back in here? You've raised an interesting point that ideally I would have liked to have covered in the article.

First of all the feedback I'm getting from HMRC is that they're unlikely to switch off the VAT portal on day 1. They would probably like to do this in the long run, but they'll need to be confident there are sufficient free alternatives available first.

In the meantime there's no reason why the HMRC portal can't be updated so it communicates with the MTD system via the API. If you'll forgive the roundabout plug, Gbooks communicates with HMRC's self-assessment APIs from a webpage, and displays the results in a webpage. So technically HMRC could do this fairly easily.

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to MattBailey
20th Sep 2017 10:43

@Matt why would there be any free options to file your VAT?

I see no incentive for a developer to spend their time developing software, and giving it away for free.

Any sort of "advertising" model for free software never seems to work very well commercially. People try but its not mainstream. The only business model is a "gateway" model, with basic functionality free but higher spec paid for, but even then, if the basic spec does the job, why would you pay a premium?

Fundamentally it seems to me that there will not be fre options.

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to MattBailey
20th Sep 2017 15:21

Hi, if by VAT Portal you are referring to the existing system for submitting VAT returns, why would this be switched off? My guess is that the overwhelming majority of businesses which are registered for VAT but who have turnover below the registration threshold will continue to use the existing system to file returns.

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to D V Fields
20th Sep 2017 10:56

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.

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to richardterhorst
20th Sep 2017 13:53

richardterhorst wrote:

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.

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By Robbo
20th Sep 2017 10:09

We use Open Office to avoid the Microsoft tax, will HMRC accept this format?

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20th Sep 2017 10:11

Oh dear, oh dear, oh dear. Here we go again.
Please, whoever is pressing for this arrant nonsense, get a grip.
Based on a recent "control check" on a client for VAT, the HMRC official did not have a clue about how to check the paper records. In fact, I had to tell him! All very sad really.
So, if a human being cannot deal with it how will a computer manage? Does it mean we will be getting visits from robots?

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to david wilks
20th Sep 2017 13:06

The way the records are kept mean that you may be visited by hmrcbots in the future. An api could extract data from your system and enable your vat to be checked remotely. Looking at use and vat rates applied. It may be fairly crude at first but i can imagine queries about vat reclaims in payroll expense lines for example. The legislation seems vague and leaves the door open for hmrc to do what they like in terms of info you have to supply

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20th Sep 2017 10:31

I have read through the consultation material provided by HMRC a big issue is that it is really the full MTD but they'll only do the VAT bit first. It is very difficult, however, to see the separation in their stuff. Although spreadsheets may be possible I have responded on the basis that people will be using accounting software as at present that's what I encourage clients at that level to do. It's worth noting that the "legislation" is a statutory instrument and so there will not be any parliamentary scrutiny of this. I have responded to the consultation and put my responses below feel free to disagree with my interpretation and I may have viewed it "worst case" but this is how I see it as an accountant not a developer.

Mike

"In response to your consultation on MTD and its introduction for VAT purposes.

1. The legislation needs to be clearer on the VAT only start and the parts of the regulations that apply to the VAT only period before full recording commences.
2. The guidance should separate out what is needed in April 2019 from what will be needed once the full MTD is required as much of it relates to the full roll out and may not be required for VAT only. At the moment, this is not clear. It is apparent, however that information requested on the first submission is such as not normally held in a book keeping system (date of start of partners) and information that is already held by HMRC. (Income Tax Notice Section 4). Much of this information is held in their accountant’s tax software or other records whereas they will use their book keeping software to make these submissions.
3. Retail sales
a. currently many businesses enter their retail sales onto their accounts weekly or even less frequently. This does not detract from the overall figures or the accuracy of either VAT or accounts records. The requirement to include daily sales will add a significant extra burden in many small retail environments or with bookkeepers who visit client’s affairs on a weekly or monthly basis adding significant cost.
b. Why require an election to make a summary daily entry for retailers? (Para 17) Surely a requirement for retailers (defined by appropriate trade numbers) should be able to simply choose to make a single or full record. A small retailer would not, by default, want to enter individual sales unless they had a very good EPOS system linked to their accounts system; the default position is, therefore, over cumbersome and burdensome. Perhaps limit this to retailers up to say £1M income and require larger retailers to make the election. It seems a daft trap to set for small businesses.
c. The SI seems to indicate that this election is open to all retailers. The guidance on your web site would seem to limit this to retailers using a retail scheme. Which is it? If the latter the entry of all sales by retailers not on a scheme is completely over burdensome bearing in mind that many retailers still use tills and extract the daily information from a paper end of day Z report.
4. VAT schemes – many current software products are not able to calculate the VAT due on all the different VAT schemes. This requires a manual calculation between the book keeping software and the return that is completed by the book keeper. The current system then accepts the return totals. Your API would appear to require that all the figures are available within the software. That functionality is not available to most businesses. Its inclusion would significantly increase costs and complexity.
5. Partial Exemption – although annual adjustments are allowed manually without calculation are you really expecting current book keeping software to manage this quarter by quarter?
6. Record keeping. The keeping of records for the statutory times is currently manageable, however, it is unclear from the information provided exactly what form will be needed long term. Currently cloud accounting providers delete information after a certain time after a subscription finishes, typically within 12 months. Current legislation is OK with this as spreadsheets, PDF files and printouts from cloud software satisfy the record keeping requirements. It is unreasonable to expect a business to maintain digital records in the state you seem to want them by paying for a subscription for 6 years after cessation of a business or to maintain two subscriptions in perpetuity where a change of software has taken place (Paragraph 5 of SI). Would you expect those with desktop versions of their software to keep upgrading it after they had finished using it?
7. From your additional guidance there is significant extra information required other than the 9 boxes which includes purchase invoice totals broken down for each rate of VAT. It is currently sufficient to record the amount of VAT charged as a total.
8. In the income tax notice how will you determine “work well” in paragraph 2.4 before widening out MTD? You currently view RTI as working well, however there are many errors and only today I could not retrieve a list of PAYE tax payments made on a client’s record for any year or period at all.

In summary, I feel the information provided is too vague and in places contradictory. It is not at all clear what will be needed in the VAT only stage as the SI and other guidance relates to full digital submission. There appears to be no acknowledgement of the extra functionality required to record the information you require or if it can be recorded the extra time that will be taken in recording it. There will be huge costs for many businesses in adopting this. All users will need to have the latest most current version of the software in order to gain the extra functionality and compatibility with the APIs. No doubt they will need to keep updating this software as your requirements change. I have many clients who are VAT registered, happily using a 3 or 4 year old version of their accounting software which does what they need and produces accurate accounts and VAT returns. Aside from the time aspect of the new regime these businesses are going to have to spend around £350 per year extra to keep their software up to date purely to satisfy the extra requirements in this legislation. They will pay no more or less tax or VAT as many already keep great records as they are."

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to coolmanwithbeard
02nd Oct 2017 22:19

I too would like to respond to the consultation. Where did you submit what you wrote above?

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By weeton1
20th Sep 2017 10:43

I appreciate I am being very naïve but it seems to me that, given that HMRC are imposing these changes (MTD in general, not just the VAT aspect) on lots of small businesses who will derive no benefit themselves whatsoever, they ought to be obligated to provide a simple, free digital solution along the lines of Basic PAYE Tools for the bottom end of the market. My brother is a farmer who maintains all his records in a ledger book which stretches back 30 years and his digital interaction extends to ringing me once a quarter to log in and input his VAT return figures for him, so avoiding a charge from his accountant (albeit probably modest) which he would otherwise have been forced to incur (again, for no benefit to himself). Businesses at this level have no need for management reporting and many probably don't spend more than a few minutes each year looking at their annual accounts (or, more likely, their tax payment) so HMRC are somewhat misguided if they think that the changes being introduced benefit such businesses in even the slightest way.

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20th Sep 2017 12:08

'The new regulations will come into effect on 1 April 2019. So the businesses affected (i.e those registered for VAT with turnover above the VAT registration threshold)'

I feel a rush of Vat de-registrations coming on.

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By Eric T
20th Sep 2017 12:19

So -

VAT Registered and above threshold - MTD aopplies

VAT registered but below threshold - MTD does not apply

Above VAT threshold but not VAT registered (because of nature of sales - exempt, zero rated etc), MTD does not apply.

Are these correct interpretations?

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to Eric T
20th Sep 2017 15:28

Eric T wrote:

So -

VAT Registered and above threshold - MTD aopplies

VAT registered but below threshold - MTD does not apply

Above VAT threshold but not VAT registered (because of nature of sales - exempt, zero rated etc), MTD does not apply.

Are these correct interpretations?

Would agree with the first two points, with the addition that those registered for VAT but with turnover under the registration threshold will presumably continue to submit vat returns using the existing system. Such business will be able to opt into MTD, for whatever reason they might wish to do so!

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20th Sep 2017 12:49

A couple of things spring to mind . . . one is the issue of digitisation itself.
First, as I understand it, when courts deal with data involving Land, only printouts from Land Registry files are acceptable as 'evidence', being humanly interpretable and not ephemeral, which digital files are not. So the question of whether 'digital data' is definitive is, to my mind, unclear. Many people, even those with accounting s/w, use notebooks/spreadsheets and other s/w as accumulators etc. so how 'deeply back into the system' is covered by the epithet 'supporting records'?
Secondly, I see no mention of VATMOSS - will it be a non entity in the timescales?

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By Tornado
to dgilmour51
20th Sep 2017 13:29

As I have said before on a number of occasions, I believe HMRC want to use 'digitisation' to the full and the need to use MTD compliant software will ensure that a full audit trail can be uploaded to HMRC which will be in a specific format so that their own inspection software can easily re-create Accounts and all Ledger Accounts. No need for bots, you will be giving them all the information they need in your submissions.

Bearing in mind that most accounting software can already prepare an audit trail within a few seconds, what reason would there be for HMRC not to include this as part of their required submission data? If MTD compliant software includes this feature as a mandatory requirement, then there is nothing that HMRC cannot inspect if they want to.

This information can be printed out by HMRC if required at which point its is no longer virtual data.

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By Eric T
to Tornado
20th Sep 2017 13:34

How does this scenario link into current Tax Investigation/Enquiry legislation?

Effectively, this means they would get as a matter of course all the data they would normally have to go through the enquiry procedures to obtain.

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By mabzden
to Eric T
20th Sep 2017 14:49

Eric T wrote:

this means they would get as a matter of course all the data they would normally have to go through the enquiry procedures to obtain.

Does it mean that?

It sounds like HMRC will receive the same data as now (i.e. the nine boxes) plus a few lines of optional data giving more detail on how the figures were calculated.

But they would expect you to be keeping the underlying data in digital form when they do an inspection or launch an enquiry.

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20th Sep 2017 13:38

My concern for my company is that we use a perfectly good but old (Dos-based) accounts package. We pull VAT return information together in a spreadsheet which outputs the nine numbers. Will we need to spend several hundred thousand pounds on a nerw system so that we can fill in our VAT Return? The last time we had a routine VAT return we were complicated on our record keeping so there was nothing wrong with what we do then.

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to The Rogue
20th Sep 2017 14:00

Is the manufacturer still supporting it? If not I guess you will need to find a way into HMRC's brave new world ..

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By tom123
to The Rogue
20th Sep 2017 14:08

It's an interesting discussion, isn't it. Once you have got above the SME businesses using off the shelf packages on one PC, you are into a whole realm of complexity.

I, for one, am not relishing the idea of upsetting my working systems to suit some government diktat.

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to tom123
20th Sep 2017 14:22

It is interesting but also more clarity is needed about the base record keeping. My reponse above is about those using those off the shelf packages but, for many, the heart is do I need to be HMRC digital through the whole process or is there a point I can plug into something that will extract data from existing systems and meet my digital requirement.
Additionally for some this may be the push they need to move their own processes forward and all businesses need to look at what they have and where their business is going. It may not be the actual digital aspect but the need to include every sale rather than a summary or record a more detailed breakdown of VAT rates in a single transaction.

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By Tornado
to tom123
20th Sep 2017 14:32

I have a number of larger clients who have bespoke accounting systems that have been developed over the years to perfectly maintain accounting records and produce the exact information required for VAT submissions and accounts. I doubt if any of these systems would be or could be made MTD compliant necessitating a move to a completely new accounting system just to be MTD complaint. This would be a very costly and time consuming exercise that would need careful planning also assuming that there is a software package that will cover all the requirements of their businesses.

Yes, small business can move to off the shelf packages given the time to source suitable software, train staff and budget for the additional costs, but the larger small and mid sized businesses face a much harder change which, in my view, could end up forcing many of those businesses to close as they are bullied into meeting unrealistic deadlines.

Also, as far as some special VAT schemes are concerned, these were designed to drastically reduce the amount of book-keeping that businesses were required to keep. Now with mandatory MTD submissions, what is the point of these schemes when you have to keep full records anyway?

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to Tornado
20th Sep 2017 15:08

Not necessarily the retail schemes will still apply as there is no need to record every sale digitally (subject to an appropriate election) a daily entry will do (Section 17 in the SI) and FRS entries will be sales only as you are not required to maintain the purchase VAT details with FRS. I have a car dealer client where the second hand goods scheme works well but it requires the invoices in the system to be different to the ones the clients get - but at 2 or 3 a day the client ones are hand written.

I guess it's how much of the calculation is digitised for some and whether manual VAT adjustments in the ledgers will cause them consternation.

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to Tornado
20th Sep 2017 15:25

Tornado wrote:

I have a number of larger clients who have bespoke accounting systems that have been developed over the years to perfectly maintain accounting records and produce the exact information required for VAT submissions and accounts. I doubt if any of these systems would be or could be made MTD compliant necessitating a move to a completely new accounting system just to be MTD complaint. This would be a very costly and time consuming exercise that would need careful planning also assuming that there is a software package that will cover all the requirements of their businesses.

Also when you are dealing with a client who is a small UK branch/subsidiary of a larger overseas group, it is very common indeed for them to be forced to use strange, bespoke software for their accounting records that is integrated with the rest of the group. It will be a massive ball ache for the developers to make it MTD compliant. In these uncertain times of Brexit etc, it is just one more reason not to do business in the UK. I suspect that this is the reason for imposing MTD on the smaller, unincorporated sector as it will be a massive headache for corporates with complex accounting systems.

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to The Rogue
20th Sep 2017 14:15

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.
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By P2
to The Rogue
20th Sep 2017 14:16

...or were you perhaps complimented on your book-keeping?

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By Tornado
to P2
20th Sep 2017 14:46

We keep most of our client records in in-house developed fairly sophisticated spreadsheet based accounting systems, each one tailored to the client's business needs.

Several years ago a VAT inspector came to carry out an inspection of one client's records and intimated that he would be doing either a 6 hour inspection or an 8 hour inspection, depending on what he found.

After about an hour and a half he appeared at my door and said that he had finished and was leaving. I asked him about queries and he said there were none.

He also added (pity no tape recorder running) that in 20 years of inspections, he had never seen such a good set of records.

Compliments indeed, but also a reminder that forcing people to use standard software that they do not understand or is unsuitable will not seal any tax gap. It is the experience and knowledge of Accountants and other professionals that makes the difference and until HMRC and the Government decide to embrace us as professionals and truly work with us instead of tying to bypass us, I think the MTD project is doomed to majestic failure.

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20th Sep 2017 14:59

I suppose we could all just say no.

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By Tornado
to david wilks
20th Sep 2017 15:16

david wilks wrote:

I suppose we could all just say no.

Often the simplest solutions are the best.

In practice, all HMRC and the Government need to do is drop the mandatory aspect of MTD indefinitely and just encourage people to move over to a more electronic based economy. This gives us all the necessary time to adapt to the new ideas and also gives developers, like Matt Bailey and GBooks, the ample time to develop top quality software that has been created to a standard rather than to a deadline.

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to Tornado
20th Sep 2017 15:30

Absolutely. I really cannot think of any good that will come out of this in the time frame mooted. They haven't even had the common sense to write to every business putting forward the idea of MTD. I wonder why.
In the famous words from Frozen - let it go.

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By Briar
to david wilks
20th Sep 2017 15:33

or better still NO! NO! NO!

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By Tornado
20th Sep 2017 17:23

My mind wanders .... if MTD is so great and the Digitisation of all Government is the ultimate goal, then can this not include all Government Departments and we just let computers take over all of their duties. One long holiday for civil servants who will become redundant.

imagine, for example, a Digitised Parliament which is just a virtual building where computer generated people sit in The Virtual Commons and Virtual Lords. Just think how this artificial intelligence could debate key issues between themselves without the intervention of humans and always come up with the right answer, just like the MTD dream.

Computers can interrogate computers and sort out the fines and penalties between them for tax and accounting errors, and we do not need to know anything about it.

Who needs humans anyway?

Just thinking.

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By Sadeesh
20th Sep 2017 19:09

We all well know that there are businesses that do not pay right taxes. After all the burden of indirect tax VAT is on the customers not the business. I appreciate this step taken by HMRC to implement MTD VAT which will make sure that businesses pay right tax and specially VAT which is paid by the end users of products and services go to HMRC not to those rough businesses.

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By Eric T
to Sadeesh
20th Sep 2017 22:45

Ah - yes - the childish assumption that the creation of new rules will magically convert those who have a habit of breaking rules into people who now feel they must obey these even more onerous rules.

If a person or a business has a mind set where rules are something they chose to ignore, the creation of new rules does not magically convert those types or persons or businesses into law abiding ones.

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to Eric T
21st Sep 2017 08:11

How right you are. No amount of legislation will bring rogue traders into line. One cannot legislate against greed. Indeed the current proposals will only serve to fuel the black market with the majority of law abiding businesses being penalised because of the rogue minority. On the other hand it has always been thus.

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to Eric T
21st Sep 2017 08:12

How right you are. No amount of legislation will bring rogue traders into line. One cannot legislate against greed. Indeed the current proposals will only serve to fuel the black market with the majority of law abiding businesses being penalised because of the rogue minority. On the other hand it has always been thus.

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21st Sep 2017 08:16

Sorry for the double post. Technical glitch.
How many glitches will MTD raise? Double postings could be rather dangerous!

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21st Sep 2017 09:11

Whilst HMRC will get the same info in boxes 1 to 9 for now MTD is a Trojan horse.

Once it's all up and running summary data will change to transactional data and automated enquiries will become the new normal.

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By Tornado
21st Sep 2017 09:28

With the recent security breach of Equifax data, some 143 million US citizens (about twice the population of the UK) and 400.000 UK citizens have had highly confidential data stolen by hackers.

It is right the that Government should make it compulsory for our businesses to submit key trading information to a central datastore unless they can guarantee that this information can be completely immune from hacking? My guess is that, based on the Equifax and other recent security breaches, this sort of guarantee cannot be given.

Digitising the whole of Government will surely make it easy for hackers to obtain enough information to decimate our business economy and hold our Country to ransom .. literally.

Perhaps MTD and the digitisation of Government project needs to be put on hold until such time as there can be a cast iron guarantee that this data cannot be hacked or at least limit the information that Government holds to summary information rather than the detailed information that I think it seeks.

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By Eric T
21st Sep 2017 09:32

I don't think that a guarantee like that will ever be possible. We are willingly walking into a total disclosure society - where not only the so called good guys know everything about us, but so will the bad guys.

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By Tornado
to Eric T
21st Sep 2017 09:59

"We are willingly walking into a total disclosure society"

I get your point but on the other hand, on that basis, surely the amount of information held centrally should be limited and we can do something about that by only being required to disclose selected information, much as we do at the moment.

Also, there is the real possibility of people providing misinformation for a variety of reasons, not necessarily to avoid or evade taxation.

With regard to Equifax, the breach of Data security is much more serious as this is information that we have no control over and has not been given to them freely by us. For many people, the information held by Equifax will dictate their future, whether that information is accurate or not, and I feel that it is seriously unacceptable that they have allowed data to be hacked in this way.

We can still embrace progress by the use of modern cloud based software or cloud based data storage and by spreading this data around through the different software suppliers, such as Gbooks, the potential mass loss of information is significantly minimised.

The Government seem to want all of this data in a single datastore which is a completely different matter.

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