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Nige321
21st Nov 2018, 12:50
I run a small business, VAT registered.

As of the 1st quarter of the 2019/2020 tax year, my VAT return has to be submitted to HMRC via an approved accounts package.
Make Tax Digital (https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital)
Thing is, I don't use one, like many I use simple Excel workbooks for keeping track of sales and purchases, and input the numbers manually into the HMRC website.

This will be no longer allowed, so I either move over, and pay, for the likes of Sage, or find a so-called Excel 'bridge' which may do the job.

According to my accountant, there are tens of thousands of 'old-fasioned' small business up and down the UK who don't even use PCs, never mind Excel or accounts software.
They are now in trouble, and scrambling for a solution.
She also says this is the thin end of the wedge, with not just the final numbers to be submitted, but also, eventually, digital recods of all transactions...

Anyone here in a similar position?

ORAC
21st Nov 2018, 13:33
“HMRC’s MTD transformation project starts with MTD for VAT from April 2019. After MTD for VAT (https://www.icaew.com/technical/tax/making-tax-digital/mtd-guidance/mtd-and-vat)has been implemented, MTD for income tax (https://www.icaew.com/technical/tax/making-tax-digital/mtd-guidance/mtd-and-income-tax) (for the self-employed and those with income from property) and MTD for corporation tax are expected to follow, but not before April 2020 at the earliest. HMRC is also running an MTD for individuals (https://www.icaew.com/technical/tax/making-tax-digital/mtd-guidance/mtd-for-individuals) transformation project........

Mandatory MTD reporting for income tax has been delayed but it has not gone away. HMRC still expects MTD for income tax to become mandatory, but the government has made a commitment that this will not be before 2020. The MTD pilot for income tax moved to public beta in March 2018. Businesses that meet the eligibility criteria and have MTD compatible software can sign up to MTD for income tax on gov.uk: Use software to send income tax updates (https://www.gov.uk/guidance/use-software-to-send-income-tax-updates). Agents can sign their clients up on Agents: use software to send income tax updates (https://www.gov.uk/guidance/agents-use-software-to-send-income-tax-update).”

Read MTD for income tax requirements in detail (https://www.icaew.com/technical/tax/making-tax-digital/mtd-guidance/mtd-and-income-tax)

this is my username
21st Nov 2018, 13:35
I was - but then I moved over to a simple, "free", web-based system and after a very modest learning curve I'm now very happy that I did and my life is much easier. After a year of use I've just elected to pay £5 a month to get some additional functionality.

The beauty of a DIY excel-based system is that you can get it do whatever you want, whereas with commercial software you have to put up with someone else's idea of what you need ....

Gertrude the Wombat
21st Nov 2018, 17:48
Thing is, I don't use one, like many I ... input the numbers manually into the HMRC website.
So do I. I haven't (yet?) been told to do any different.

Nige321
22nd Nov 2018, 12:49
So do I. I haven't (yet?) been told to do any different.

Gertrude
I had a letter from HMRC last week, confirmed by accountants. It's happening...

Gertrude the Wombat
22nd Nov 2018, 12:52
Gertrude
I had a letter from HMRC last week, confirmed by accountants. It's happening...
My company isn't really doing anything at the moment. Maybe I'll just deregister if I get the letter.

flyingfemme
22nd Nov 2018, 16:13
MTD has several holes in it that the powers seem to think can be vaporised at will. I run 4 companies under a group VAT number. Each set of accounts yields a set of figures that I amalgamate using an Excel spreadsheet and then type the numbers into a web VAT entry........as far as I am aware there is no accounts package that can cope with this and the overhead to put all four sets of accounts into one package would be huge.

Chronus
22nd Nov 2018, 19:31
It is a common misconception that MTD stands for Making Tax Digital. In truth it stands for Making Tax Difficult for the taxpayer and easy for the tax collector.

BirdmanBerry
22nd Nov 2018, 19:50
We use Xero and it's about £20 per month and is MTD compliant. Definitely worth the (small) investment.

racedo
22nd Nov 2018, 19:56
Guess the whole premise will be if Business X claims it spent £1750 from Business Y on a purchase then HMRC will be able to have a look at did Business Y actually make a sale.

tescoapp
22nd Nov 2018, 19:56
Blame it on Brexit!!! its going to happen if you like it or not.

In fact if the UK stays in then VAT returns and payments on invoice issue are going to become the norm like most of Europe is already, they are all in different countries to take the piss out of EU rules. I have 4 company's and the Uk one is by far the least red tape and monthly returns burden out of any of them.. The other three all require VAT to be paid the month the invoice is issued not when the payment arrives. If they don't pay then I am out of pocket for the VAT until it is paid. If the invoice doesn't get paided then that's a whole heap of bollocks to sort out to get the tax back.

The VAT payments are extremely high up there to get standardised and go directly to brussels after exit.

So not a lot the Uk government can do about it if we stay in .

Chronus
22nd Nov 2018, 20:22
Guess the whole premise will be if Business X claims it spent £1750 from Business Y on a purchase then HMRC will be able to have a look at did Business Y actually make a sale.
That`s a bulls eye! Makes it easy for the taxman at the cost of the law abiding good tax payer who always ends up carrying the burden of the cheating, scrounging non taxpayer.

Gertrude the Wombat
23rd Nov 2018, 11:10
We use Xero and it's about £20 per month and is MTD compliant. Definitely worth the (small) investment.
Not for me. My not-quite-dormant company reclaims something like £9 per month so at £20 per month I'd be better off deregistering.

Gertrude the Wombat
23rd Nov 2018, 11:15
I'd hate to have to write the matching software. (Unless I was doing it as a paid by the hour freelancer of course.)

At a guess you'd get around 85% of the matching working fine, after a couple of years of teething troubles. Another 10% would fail because some prat had "up"graded their system into an incompatible state. Another 4.998% would be false positives. The remaining 0.002% would be genuine fiddles - so maybe around 2,500 manual investigations to undertake for each fraud discovered ... and then what proportion of these apparently "genuine fiddles" would turn out to be other sorts of errors?

ukc_mike
23rd Nov 2018, 14:05
It would appear not a lot of firms know about this. The Register now has the story, based on a not very complementary House of Lords report. (Sorry - can't post the URL.)

Gertrude the Wombat
23rd Nov 2018, 14:48
https://www.theregister.co.uk/2018/11/22/hmrc_digital_tax_small_business_delay/

Not sure how I missed it, but I supposed I don't always read every story on El Reg - ta.

Russell Gulch
24th Nov 2018, 05:03
Trust tax returns have been this way for years

radeng
26th Nov 2018, 11:24
How long until they refuse to accept paper returns from individuals? They've just responded to my paper return by giving me over £330 back!