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  • FIRST POST
    • lindylootoo
    • By lindylootoo 8th Aug 18, 12:42 PM
    • 14Posts
    • 1Thanks
    lindylootoo
    Making Tax Digital
    • #1
    • 8th Aug 18, 12:42 PM
    Making Tax Digital 8th Aug 18 at 12:42 PM
    I'm given to understand that MTD becomes compulsory by April 2019 - can anyone confirm that?

    Isn't there a cutoff for small business? Many VAT registered companies are still too small for accounting software and many who have moved to accounting software do not want to be dictated to by software suppliers to upgrade (and increase fees) just to have software which sends VAT returns automatically? For very many years I have used my Government Gateway for this........it suits my purpose very well and I really don't want the issues to transferring to newer, fancier, bells and whistles, , software.

    TIA
Page 1
    • antrobus
    • By antrobus 8th Aug 18, 1:04 PM
    • 16,625 Posts
    • 23,552 Thanks
    antrobus
    • #2
    • 8th Aug 18, 1:04 PM
    • #2
    • 8th Aug 18, 1:04 PM
    I'm given to understand that MTD becomes compulsory by April 2019 - can anyone confirm that?

    ...
    Originally posted by lindylootoo
    As part of MTD, businesses registered for VAT with a taxable turnover above the VAT registration threshold of 85,000 will need to keep VAT records digitally and file their VAT returns using MTD compatible software. This will start from their first VAT period starting on or after 1 April 2019.

    https://www.gov.uk/government/news/hmrc-publishes-more-information-on-making-tax-digital
    • lindylootoo
    • By lindylootoo 8th Aug 18, 1:09 PM
    • 14 Posts
    • 1 Thanks
    lindylootoo
    • #3
    • 8th Aug 18, 1:09 PM
    • #3
    • 8th Aug 18, 1:09 PM
    So using an accountancy package.....which is digital, so appears to be MTD compliant, but submitting returns using the Government Gateway.......this isn't compliant?
    • Pennywise
    • By Pennywise 8th Aug 18, 1:09 PM
    • 11,303 Posts
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    Pennywise
    • #4
    • 8th Aug 18, 1:09 PM
    • #4
    • 8th Aug 18, 1:09 PM
    Officially, HMRC are still clinging on to the April 2019 introduction. In reality, it's highly unlikely it will happen. There are still far too many unknowns and the sheer scale of it, so late in the day, means HMRC systems will probably be nowhere near ready for it. Most likely scenario is it being put back a while but having the facility available sometime in 2019 for those who want to do it.

    Don't forget though, it's not ALL vat registered businesses, only those with turnover over the VAT registration thresholds, so HMRC need to keep the old system for smaller businesses who have voluntarily registered for VAT - if they're keeping the old system for smaller voluntary registered businesses, they may as well keep for the others too!

    I'd really wait and see for some news nearer the time. It's already been put back so many times, and watered down so much, I'd put money on nothing being compulsory next year. Under the latest proposals, HMRC will receive nothing more than they do already - the initial proposals for sending the actual transactional data have already been scrapped. All that is required under current proposals is that the same few VAT return figures which you manually enter via their website now have to be transmitted automatically from software - there are many software conversion apps being written which take your desktop software, spreadsheet or whatever and simply convert the totals into the format required by HMRC anyway. So one way or another, highly unlikely you'll need to buy expensive all singing, all dancing software.

    MTD for business is another foul up from HMRC proving yet again they don't actually understand how businesses work. They were told years ago it wouldn't work, and year by year they've been forced to water down their proposals. Just a lot of worry and time wasted for nothing.
    • lindylootoo
    • By lindylootoo 8th Aug 18, 1:15 PM
    • 14 Posts
    • 1 Thanks
    lindylootoo
    • #5
    • 8th Aug 18, 1:15 PM
    • #5
    • 8th Aug 18, 1:15 PM
    Pennywise - your post is wonderful - thank you. BUT......I've have been told that I "MUST" upgrade my current software before the end of August to comply!! When I questioned this on webchat - I was told I had to upgrade to be GDPR compliant. Then I had a message to say it wasn't compulsory. I can't help thinking that some software suppliers are jumping on the bandwagon!
    Even given that.........the hard sell I'm getting is extreme! Do I give in and upgrade or not?
    • antrobus
    • By antrobus 8th Aug 18, 2:12 PM
    • 16,625 Posts
    • 23,552 Thanks
    antrobus
    • #6
    • 8th Aug 18, 2:12 PM
    • #6
    • 8th Aug 18, 2:12 PM
    ...

    MTD for business is another foul up from HMRC proving yet again they don't actually understand how businesses work. They were told years ago it wouldn't work, and year by year they've been forced to water down their proposals. Just a lot of worry and time wasted for nothing.
    Originally posted by Pennywise
    It works in Estonia.
    • Pennywise
    • By Pennywise 8th Aug 18, 2:14 PM
    • 11,303 Posts
    • 21,558 Thanks
    Pennywise
    • #7
    • 8th Aug 18, 2:14 PM
    • #7
    • 8th Aug 18, 2:14 PM
    Do I give in and upgrade or not?
    Originally posted by lindylootoo
    I'd be VERY wary of upgrading so early as you have no way of knowing if your software will be RTI compliant when the time comes. Already one popular accounting software which originally said they'd be compliant has pulled out of RTI completely. I think you're right to think that they're just doing the hard sell by frightening you into upgrading.

    GDPR is a completely different matter - it's up to you as the business owner to check your own GDPR compliance, not a third party as they won't know what personal information you hold and process nor how you protect it. It's possible (in fact highly likely) that you can be GDPR compliant with your existing system. It would be interesting to know the reasons why they say it's not compliant yet their upgraded version is! Sounds again more like the hard sell than any genuine reason.
    • Pennywise
    • By Pennywise 8th Aug 18, 2:16 PM
    • 11,303 Posts
    • 21,558 Thanks
    Pennywise
    • #8
    • 8th Aug 18, 2:16 PM
    • #8
    • 8th Aug 18, 2:16 PM
    It works in Estonia.
    Originally posted by antrobus
    Yes, and other countries too I believe. The difference being they may have a competent "fit for purpose" tax authority and almost certainly have a less complex tax regime than the UK. Considering RTI for payroll brought in a few years ago is still suffering huge problems, I won't hold my breath for MTD for VAT/accounts working any time soon!
    • lindylootoo
    • By lindylootoo 8th Aug 18, 3:09 PM
    • 14 Posts
    • 1 Thanks
    lindylootoo
    • #9
    • 8th Aug 18, 3:09 PM
    • #9
    • 8th Aug 18, 3:09 PM
    I'd be VERY wary of upgrading so early as you have no way of knowing if your software will be RTI compliant when the time comes. Already one popular accounting software which originally said they'd be compliant has pulled out of RTI completely. I think you're right to think that they're just doing the hard sell by frightening you into upgrading.

    GDPR is a completely different matter - it's up to you as the business owner to check your own GDPR compliance, not a third party as they won't know what personal information you hold and process nor how you protect it. It's possible (in fact highly likely) that you can be GDPR compliant with your existing system. It would be interesting to know the reasons why they say it's not compliant yet their upgraded version is! Sounds again more like the hard sell than any genuine reason.
    Originally posted by Pennywise
    At the present time, I'm using HMRC Basic PAYE Tools.

    I cannot see any reason why my present accounting software should NOT be GDPR compliant and surely any new upgrades which include PAYE with RTI are far LESS likely to be GDPR compliant?

    However, none of this gives me a valid reason for updating before 31st August!

    Thanks for all your help.
    • simonchase
    • By simonchase 10th Jan 19, 3:43 PM
    • 6 Posts
    • 0 Thanks
    simonchase
    Any updates on your thoughts?
    Right now I simply type a few numbers into the gov website for my VAT return.

    Do I really need to buy a subscription software package?

    The gov website lists 100s of options. It's all a bit overwhelming.
    • Pennywise
    • By Pennywise 10th Jan 19, 5:20 PM
    • 11,303 Posts
    • 21,558 Thanks
    Pennywise
    Right now I simply type a few numbers into the gov website for my VAT return.

    Do I really need to buy a subscription software package?

    The gov website lists 100s of options. It's all a bit overwhelming.
    Originally posted by simonchase
    If your t/o is above the VAT registration threshold, you have to "upgrade" your HMRC government gateway account and the new online account doesn't have the "fill in the boxes" functionality - you just get new login details which you enter into compliant software so you can submit your VAT returns by clicking a button in your software. The whole point is to avoid people typing in numbers as HMRC believe that's where lots of mistakes are made. Hence why they want to reduce manual re-keying and reduce/eliminate use of hand written records and spreadsheets. You should have received notification from HMRC of the changes which give instructions as to how to upgrade/set up your new user account.

    As for buying software, I understand that some firms are making "bridging" software available as an add-in to excel spreadsheets, so if you're using a spreadsheet, at least for the short term, you could buy bridging software to link your spreadsheet to HMRC systems. (Not sure how long that's going to be allowed - pretty sure I heard it was just temporary!).

    All, assuming HMRC impose it in April as planned. They're being absolutely criticised left, right and centre at the moment so are under pressure to ditch the compulsory aspect this year and make it voluntary for another year or two to allow more time for them, software firms, and businesses to be ready as they've been ridiculously slow to publish what their requirements are and have moved the goalposts several times, so many software simply isn't ready (and HMRC's beta testing systems aren't actually fully working either!).
    • BoGoF
    • By BoGoF 11th Jan 19, 7:51 AM
    • 4,003 Posts
    • 3,468 Thanks
    BoGoF
    Update on .GOV site yesterday

    https://www.gov.uk/guidance/use-software-to-submit-your-vat-returns#who-can-use-this-service
    • DropTheNeedleAndPray
    • By DropTheNeedleAndPray 18th Jan 19, 2:31 PM
    • 7 Posts
    • 5 Thanks
    DropTheNeedleAndPray
    My main issue with this proposed system is that it must be aimed at virtually all businesses (85k isn't exactly a king's ransom for turnover).

    The government have listed hundreds of software types but what is good for the sole trader won't be appropriate for BP, for example. So, us small traders have no guidance as to what is at the easy, cheap end of the scale and as mentioned above, it's all totally overwhelming (and I'm IT literate - god help a technophobe).
    • Star Style
    • By Star Style 19th Jan 19, 12:32 PM
    • 1 Posts
    • 1 Thanks
    Star Style
    Copy n paste
    I just read on the HMRC's site that you are allowed to copy and paste the information into the boxes until 2020.

    Hopefully, everyone will be able to choose the right software before then.

    Or the HMRC might have developed free software for smaller businesses to use.

    I am going to keep checking HMRC over the next 6 months and then make a decision.

    Anyone else got a suggestion?
    • cazzybabe
    • By cazzybabe 21st Jan 19, 1:58 PM
    • 181 Posts
    • 28 Thanks
    cazzybabe
    Clarification needed...
    So, I am not good with technology but I do use sage instant accounts 2014... it has, to date done everything I need it to including my vat. However, when it has worked it all out, I then go into government gateway to copy the figures over.
    My questions are:
    1. Will I have to comply to MDT, even though my turnover does not exceed the vat threshold? (Our business has taken a dramatic down turn due to personal circumstances, and I will be de-registering in a year or so when we have re-modelled the business).
    2. Will I have to buy new sage software?
    Thank you for reading, all help appreciated
    keep saving
    • baz2277
    • By baz2277 22nd Jan 19, 11:47 AM
    • 49 Posts
    • 4 Thanks
    baz2277
    I've just started looking a bit more thoroughly into MTD - by the sounds of it, ALL vatable businesses have to file via this method from April 2019. At the moment the change is, to put it mindly...a pain in the ****!!!!

    I currently have a simple excel spreadsheet with the following columns :

    Date
    Invoice Ref
    Supplier
    Purchase Category
    Cost net of vat
    Vat amount
    Gross Amount

    Plus a further few columns to say when payment was made and how payment was made.

    Looking into just one of the recommended programmes - quickbooks, they are charging a monthly fee and when i've signed up for the trial, the amount of information you need to input seems ridiculous.

    I don't want to have to input all my labour, link my bank account etc etc etc - it's worked fine for me for the last 6 years and I don't see why I should change! I can't even merge my current spreadsheet files into it at the moment. I think it needs a much simpler programme.

    HMRC are saying this will help avoid people putting the wrong figures in - I think there's far more room for error using MTD than there was with the original method.

    Rant over!!
    • Pennywise
    • By Pennywise 22nd Jan 19, 12:34 PM
    • 11,303 Posts
    • 21,558 Thanks
    Pennywise
    1. MTD only applies to VAT registered businesses whose turnover exceeds the threshold for registration, so, no, not all VAT registered businesses at all. If your turnover is under the 85k threshold, then you don't need to worry about MTD yet.

    2. Accountants and their professional bodies have been lobbying HMRC for a long time now to get the April compulsory MTD scrapped as we know it's a fiasco that will cause a lot of work for no benefit. HMRC won't listen though and are pressing ahead. Even the House of Lords has criticised HMRC and told them to delay it's introduction! Talk about a car crash waiting to happen.

    3. QB isn't the only accounting software - just one of the most highly marketed ones which is why you've heard of it. There are plenty of alternatives, many of which are a lot simpler and cheaper. You'd be wise to ask your accountant for their advice. We tend to recommend a simple desktop system called VT (www.vtsoftware.co.uk) which is as quick if not quicker than a spreadsheet for data entry. They have a free cash book version or a paid for (one off lifetime purchase price of around 120?) which has sales/purchase ledgers if you need those. It's well used and highly recommended by lots of accountants and book-keepers and is very quick and easy to learn. For online systems, there are cheaper ones compared with Quickbooks, such as Pandle, Accountsportal, clearbooks, and freeagent.
    • baz2277
    • By baz2277 22nd Jan 19, 3:16 PM
    • 49 Posts
    • 4 Thanks
    baz2277
    Thanks for your reply and comments - My turnover is around the 300k mark so I'vegot no way of avoiding it sadly! I did take advice from the accountant, it was them who suggested quickbooks - they are just as frustrated as me, and I have seen the list of suppliers - but don't really want to spend hours going through each individual one to see what each offers.

    I really feel that HMRC should be providing the relevant software to enable this free of charge. A very very simple way of incorporating a basic spreadsheet into what they require. It'd be easier for me to send them PDF's of my monthly sheets - that's 2 pieces of paper I can scan in less than 1 minute!!

    I actually first heard about MTD on BBC Radio 4 during Moneybox last autumn, not a thing before this from HMRC. I wonder if they will completely remove the normal filing option from the website after 1st April?!
    • 00ec25
    • By 00ec25 22nd Jan 19, 7:00 PM
    • 7,807 Posts
    • 7,496 Thanks
    00ec25
    A very very simple way of incorporating a basic spreadsheet into what they require. It'd be easier for me to send them PDF's of my monthly sheets - that's 2 pieces of paper I can scan in less than 1 minute
    Originally posted by baz2277
    what they require is a full list of the underlying transactions making up each return in a format they can interrogate. A pdf won't cut the mustard as it would be the equivalent of sending them a wax tablet and stylus.
    • Pennywise
    • By Pennywise 22nd Jan 19, 7:43 PM
    • 11,303 Posts
    • 21,558 Thanks
    Pennywise
    Looking into just one of the recommended programmes - quickbooks, they are charging a monthly fee and when i've signed up for the trial, the amount of information you need to input seems ridiculous.
    Originally posted by baz2277
    I'm no fan of QB but don't be put off - you don't have to fill in every box of the supplier details nor purchase invoice entry field. You can leave most fields blank if you don't need them, such as supplier address, phone number etc, purchase order number, payment terms etc. Ignore everything you don't need and just enter the basics just the same as your spreadsheet column list. Like most other software, 95% of the functionality/features in QB aren't usually used by the average business - they're there if you need them but aren't obligatory. Perhaps if your accountant had shown you around QB and offered to help you set it up, you'd have a better opinion of it.
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