QuickBooks makes its first MTD for VAT submission

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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 Hattersley

Richard is AccountingWEB's practice correspondent. If you have any comments or suggestions for us get in touch.


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By Matrix
16th May 2018 22:10

Since I am the IT manager then I am really looking forward to this....

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17th May 2018 08:40

It took an IT manager to set up the Agent account. Fine tuning including QB building a connection between blah blah blah. Yep anything an ordinary business person could do. Might even have a stab at it myself.
Many business are waiting to go on to the pilot. Really where are these business? Certainly not in my or many of my colleagues practice.
Stick to your adverts QB they're more entertaining. Unfortunately my original gut feeling that MTD is a load of rubbish and should be scrapped gets more and more credence as time goes by.

Thanks (2)
By Matrix
to johnjenkins
17th May 2018 08:59

One new enquiry a day for the pilot is not many. I don't know anyone in it either and don't know why these accountants are putting a positive spin on MTD, maybe Quickbooks are paying them well.

Thanks (2)
17th May 2018 13:26

QB makes its first VAT submission? But QB (and Sage and others) have been able to do this for years so QB's announcement is hardly anything to should about. In fact I have to ask why has it taken so long?

Thanks (1)
17th May 2018 17:05

I'd like to know how Sagars are preparing one of their larger clients, one who is using bespoke accounting software, to get to grips with this MTDfV. Hardly anyone seems to be talking about this

Thanks (1)
to Jo Nokes
18th May 2018 09:02

I have been asking the same questions of HMRC. We have loads of clients that use industry specific software: travel agents, solicitors, farmers etc. I personally have contacted some of the software suppliers to find out what plans they have for MTD and without exception I've been told they have no plans at all. I've asked HMRC how businesses are to comply with MTD if their industry specific software doesn't have MTD built into. HMRC's response is these businesses must use MTD software so they must either switch provider or run a second MTD-compliant system in parallel to their industry specific software. My larger clients don't have enough staff time to do this so would have to employ extra staff. But my smaller clients with other non-compliant systems (eg paper) are going to have to employ someone to do their MTD too. How can HMRC be so arrogant especially when so many of their systems don't work correctly?

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to kevinringer
18th May 2018 09:32

Ah Kevin, you now know why HMRC aren't bothered about MTD. Government have said it goes live April 2019 and it is up to us and business to sort it out, even if nothing works. No doubt Government will realise they will have a riot on their hands if the system isn't running spot on. HMRC have totally washed their hands of any liability. If the software houses don't come good it's their fault. If there is software and our clients don't use it, it is down to us and our clients fault.

Thanks (1)
By adeyb
to johnjenkins
18th May 2018 15:46

And if the users (or whatever we're called) don't get to file these precious online reports (or whatever they're called) then HMRC will send us with the plenty of penalties and fines!


(Am I the only one who's begining to think the WANT us NOT to be able to file?)

Thanks (0)
12th Jun 2018 13:51

HMRC have a list of MTD Income Tax approved software at https://www.gov.uk/guidance/software-for-sending-income-tax-updates. Is there a list of approved MTD VAT software?

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14th Nov 2018 18:42

Please be aware that Quickbooks Online will not be compliant for MTD for those
on the Flat Rate Scheme. Please make your clients aware as Intuit seem unwilling to do so.
They have no current plans (as at 14/11/2018) to include those on the Flat Rate Scheme within their MTD program.

Responses from Intuit most welcome to this rather unbelievable situation.

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to amorphet
15th Nov 2018 12:27

I don't have any FRS clients using QBO but I've logged into one of my non-FRS clients and can see in the VAT settings a FRS tick box. When I tick it I'm asked to input the flat rate and registration date for the 1% discount. Does this not work?

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