While uncertainty hangs over Making Tax Digital for individuals, MTD for VAT is still pressing ahead, with the news this week from QuickBooks that it has completed its first filing through QuickBooks Online.
Ahead of the official roll-out in April 2019, Leeds-based accounting firm Sagars submitted a client's VAT return as part of the MTD beta test.
Margaret Middlemass, senior manager at Sagars, told AccountingWEB that the firm had found the process straightforward, except a couple of “minor snags that you’d expect from a pilot”.
“It's just been business as usual in submitting the VAT return,” Middlemass said. “Clients are not involved any more than they would normally be with the preparation of the books. The only thing extra was making sure we had the Agent Service account set up, which was done separately and took a little doing, but our IT manager got it set up straightforwardly.”
Middlemass said the firm was keen to join the beta as it decided that “one of the best ways to understand and embrace the technology is to get involved as soon as possible”.
Although there are only a small number currently on the pilot, that’s not a reflection on the demand from accounting firms and small businesses wanting to participate, according to Intuit’s head of product management, Shaun Shirazian.
“There is not a day where we don't hear from one of our accounting customers or small business customers who want to be part of the pilot,” he said.
Over time more volunteers will be added to the MTD for VAT beta programme, with the pilot being opened up later this summer.
For Shirazian, the process involved an element of fine tuning the software house's existing VAT functionality, which included QuickBooks building a connection within QBO to HMRC’s APIs. In a recent release, this new component gives accountants on the pilot the ability to directly connect with HMRC from within the QuickBooks for Accountants portal.
Getting clients onboard
A key factor in the success of MTD for VAT is how non-cloud businesses take to the project. In this sense, HMRC may be in for an uphill struggle, as Xero’s Gary Turner suggested recently on AccountingWEB. “Only around 1 in 7 VAT returns are made from within accounting or bookkeeping software, with the remainder being manually completed using HMRC's online form,” he commented.
Sagars had this aspect at the forefront of their client selection process for the pilot. Although direct debit clients were excluded, the handful of clients Sagars was able to put forward ranged from those that provide data in other forms that the firm then translates into the accounts packages, to those that do it themselves.
“One of the things we looked for in providing a number of clients to put forward for the pilot was a bit of variety,” Sagars’ Middlemass said. “So we put forward one or two that were sole traders, and some that were larger companies and partnerships so that there was a mixture of experience as well as size.”
Client involvement in the pilot has varied from ambivalence to those who have taken an active interest. But Middlemass said the firm has stressed to clients - whether through driving cloud adoption or the MTD pilot - that this is not a compliance burden, but an advantage in moving with the technology.
“In the last few years, we've helped clients look at this in terms of the convenience and efficiencies that they're gaining from using cloud products such as QuickBooks,” she said. “That there is more to be said in terms of improvement in their information available, rather than looking at this as a burden to comply.
“In a way, the submission we did this week is a by-product of using better technology in the first place.”
About Richard Hattersley
Richard is AccountingWEB's practice correspondent. If you have any comments or suggestions for us get in touch.