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VAT Online: Software FAQs

22nd Feb 2010
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Sage's VAT expert Suzanne Wardingham answers some frequently asked VAT questions for small businesses.

From April 2010 online VAT filing will be mandatory and all businesses turnover of £100,000 or more will be required to file and pay VAT by electronic methods. It will also affect all businesses (irrespective of size) that register for VAT from 1 April.

Q: Will there be any technical software quirks or changes that will affect record keeping?

A: “There aren’t really any technical quirks that will affect businesses record keeping, as the online filing process is simply a case of transferring the details that you would normally put on paper into the forms on the HMRC website. Something that small businesses should be aware of, however, is ensuring that they have all of the relevant information to hand when signing up to use the service.

"Companies filing online for the first time will need five key pieces of information – their VAT registration number; their date of registration from when they first became VAT registered (which will be on the first letter they received from HMRC); the postcode of their business address; the final month of their last VAT return; and the VAT liability of their last tax return.  If a company cannot find some of the information, then they should contact HMRC who will be able to find it for them.”

Q: Do you have any tips for small businesses on how to prepare for online VAT filing?

A: "The key to successful online VAT filing for a business, is sorting out their credentials. If this has not been done yet, it needs to happen as soon as possible. Once firms have all of their credentials in place, the process itself is quite straightforward, and is just a matter of filling in the form online as you would have done on paper previously.  In order to be as prepared as possible, businesses should also decide whether they would prefer to pay using a direct debit, which will give them more time to pay, or by other electronic means, such as BACS. 

"Small businesses should also be aware that they could save a great deal of time and effort if they use a dedicated business software, which can transfer all of the figures across for them and keeps all of their important information in one place. This make the process as efficient and painless as possible, and helps reduce the likelihood of errors caused by cutting and pasting information from spreadsheets.”

Q: Will there be any software issues to watch our for? What are the key questions to ask your provider ahead of the change over to online filing?
A: "The key things that businesses should find out from their software providers before they submit their VAT online, is whether or not their software is set up for online filing. If it isn’t, then is the provider going to introduce it? If they are going to introduce it - how are they going to introduce it and when? Sage’s software has included provisions for online filing of VAT returns for three years, and we have a dedicated team of qualified technicians on hand to talk our customers through the process and to help address any problems that might arise during submission. If businesses are using software other than Sage, it is worth finding out whether their providers are operating a similar support service.”

Suzanne Wardingham is a VAT expert working in Sage UK's small business division.


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By axw001
23rd Feb 2010 13:44

Businesses using software other than Sage - the impudence!

"If businesses are using software other than Sage, it is worth finding out whether their providers are operating a similar support service"

I have to say that we would find it difficult to offer a support service similar to that offered by Sage - our users have much higher expectations.

Otherwise great point Suzanne.  One of the strengths of providing accounting online to businesses is that we can be proactive in our support of online filers, often letting clients know of problems with their submission and how to resolve them before the client has made contact with us. This is because filing takes place from our centrally managed queues and we have full visibility of the process.

Another question businesses should ask is how the supplier deals with HMRC changes to online filing requirements.

HMRC changed the format of VAT filing XML in November '09 and January '10. As an online supplier we had the required updates  in place and transparently available to users on the day they were needed without any need to download and install updates.

You also say you have had online filing capabilities in Sage software for 3 years - does that mean it was released into the marketplace before you had been through the HMRC recognition testing process?

Alan Wright

Accounting Software Online from Liberty Accounts

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