One For Accountants and Bookkeepers

[elainec100@cheapaccounting]

I was at an HMRC working together meeting today and one thing that became obvious that I must admit had not registered with me is regarding VAT on line filing.

This relates to non vat registered accountants and bookkeepers providing VAT registration and return work. I am sure that there will be a few on here and some who whilst vat registered would be happy to support the small practices!

The facts are:

Currently for those of you would operate in a practice / business which is not VAT registered you cannot register for on line filing for VAT for your clients.


As from April 2010 any clients with a turnover of over £100k or any new vat registration will have to file their VAT returns on line and pay on line.


HMRC are looking to change the VAT on line filing restrictions but not until 2011.


So what this means is that from April 2010 until any changes are brought in, non vat registered practices / businesses will not be able to offer VAT services for their clients (unless of course they get the client to file in the return on line).

The only work around is for the client to get the log on and you to use their password – if of course you are both happy to proceed on this basis. Apparently it is not illegal to do this but I am sure may present some ethical issues.


So my questions are:



Is everyone aware of this?


Do you support the restriction that this places on small practice / business operations?

[Jenni384]

Thank you Elaine for bringing this up.




Is everyone aware of this?


Do you support the restriction that this places on small practice / business operations?







Yes
It's ridiculous! Why do accountants/bookkeepers need to be VAT registered in order to file their clients VAT returns online? I have been aware of this for a number of years and it's mind boggling. Do accountants have to trade through Limited Companies to be able to submit their clients Corporation Tax returns? Nope. So why the restriction on VAT filing? If there is a logical answer, I'd be interested in hearing it as I have never heard one. Definitely one to be changed, and I hope sooner than 2011.

[carey bookkeeping]

1) yes i was aware
2) Agree with jenni, it is daft that we can do everything else online!

[elainec100@cheapaccounting]

Can I add then - how will practices / businesses provide a vat return service to their clients (particularly newly registered ones) if you cannot file paper vat returns and there is no system available to file on line?

[Tom McClelland]

HMRC didn't think something through before designing a system? :eek:

Tell me it ain't so!

Actually the teams who support for payroll software developers seem very good compared with other departments from what I can see. Luckily.

[Jenni384]

Can I add then - how will practices / businesses provide a vat return service to their clients (particularly newly registered ones) if you cannot file paper vat returns and there is no system available to file on line?

I will have to do as you say in your OP - use the client's personal login and password.
While this will work adequately, it's not ideal at all.

[dp0848]

I'll have to stand on the naughty step with Elaine and admit that I had no idea about that rule.

I am really struggling to see the logic behind it. Its just plain daft but then again we are talking about HMRC ;)

[Jenni384]

I am really struggling to see the logic behind it. Its just plain daft but then again we are talking about HMRC ;)

Yup, I second that! :p

[elainec100@cheapaccounting]

Maybe they want us all to become vat registered :rolleyes:

[dp0848]

On a slightly different note a client of mine had a VAT inspection the week before last. Fortunately (or rather thanks to my fantastic skills as an accountant!! ;)) she left with out a single extra penny of VAT. However she did tell me that HMRC are closing about 40 VAT offices across the country and sacking a load of inspectors. Was anyone else aware of that?

[Jenni384]

On a slightly different note a client of mine had a VAT inspection the week before last. Fortunately (or rather thanks to my fantastic skills as an accountant!! ;)) she left with out a single extra penny of VAT. However she did tell me that HMRC are closing about 40 VAT offices across the country and sacking a load of inspectors. Was anyone else aware of that?

Congrats!
And, no, I didn't know that! :eek:

[Jenni384]

Maybe they want us all to become vat registered :rolleyes:
Aye, probably! How dull :p

[elainec100@cheapaccounting]

I have spoken further with the Liverpool Working Together Group on this and agree that it is unfair that small practices / businesses are at an unfair advantage because of the HMRC IT issues. They are going to speak with someone in VAT and come back to me on Wednesday.

So for any one interested in the impact this will have on small practices / businesses I can provide updates.

[dp0848]

Thanks Elaine. I'd be very interested in being kept up to date with this.

Thanks.

David.

[CassioAcc]

Elaine, I am interested in being kept up to date. Thanks for highlighting this.

[carey bookkeeping]

yes please keep us updated Elaine.

[two sheds]

I was aware of this, some non registered accountants have been making a fuss over this for the past couple of years but HMRC are not interested....really gets my goat, set a deadline for something to be done ie online filing, and then hamstring the people working it............after thirty years in tax, I am so pleased that I am not on any of these consultation groups I would probabaly be arrested for threatening behaviour!

Not to hijack this thread, but has anyone esle noticed that CT41Gs are not coming out but a stroppy reminder is? I have three cases like this all different districts...Elaine can you ask about this?

Julie

[Philip Hoyle]

Thanks for raising this Elaine.

I have been toying with the idea of registering for VAT for a couple of years now, one of the reasons being to be able to use the online VAT system for clients.

I'm operating just below the VAT threshold and make sure that I don't go over it. Most of my clients either aren't VAT registered or are on the flat rate scheme, so if I register, it will cost them another 17.5% which is something that I don't think is fair to them.

If HMRC don't sort this out before mandatory electronic filing, then my clients are just going to have to learn how to use HMRC's website themselves to submit their own tax returns.

I don't see why I should be forced to register for VAT, and for many of my clients to suffer a 17.5% increase in fees, just because of the usual HMRC/Government incompetence.

[dp0848]

Hi Julie,

Yes, I've had one or two nasty letters about un-submitted GT41Gs which were never received in the first place. All mine came from the same district.

[elainec100@cheapaccounting]

Thanks for raising this Elaine.

I have been toying with the idea of registering for VAT for a couple of years now, one of the reasons being to be able to use the online VAT system for clients.

I'm operating just below the VAT threshold and make sure that I don't go over it. Most of my clients either aren't VAT registered or are on the flat rate scheme, so if I register, it will cost them another 17.5% which is something that I don't think is fair to them.

If HMRC don't sort this out before mandatory electronic filing, then my clients are just going to have to learn how to use HMRC's website themselves to submit their own tax returns.

I don't see why I should be forced to register for VAT, and for many of my clients to suffer a 17.5% increase in fees, just because of the usual HMRC/Government incompetence.

Exactly.

What I wondered is if there are others like us then we could get some momentum going on this issue.

So far I have:



raised it with HMRC Working Together as I said
phoned ICAEW and am awaiting a reply to my voice mail
send a mail message to my MP

How sad do I sound - well I am just trying to protect my business and my clients' interests.

[elainec100@cheapaccounting]

Hi Julie,

Yes, I've had one or two nasty letters about un-submitted GT41Gs which were never received in the first place. All mine came from the same district.

Do it on line :D:D:D

[dp0848]

Your not sad at all Elaine. As Philip says this is very unfair and has a detrimental effect on small practices and their small clients. We need to stand up for ourselves and not allow HMRC et al to walk over us. I'll drop my MP a letter on this as well.

[dp0848]

Do it on line :D:D:D

Fair point !! But will HMRC let me if I'm not registered for CT?????? :D:D:D

[elainec100@cheapaccounting]

Yes your can do file only for SA, PAYE and CT - which makes VAT even more unfair. If you want the text for the email I sent to me MP send me a mail - address in signature.

I wonder if Sift would like to help at all on this - is Dan around?

[Jenni384]

Agreed, Julie, I had one CT41G that never arrived, but the chaser did!

Thanks for this Elaine, I think I should write to the MP too...

And yes, Dan! Come over to [one of the] the geek forum[s] and have a looksee please :D

[elainec100@cheapaccounting]

Well how quick an update is this. My contact as HMRC rang me back on this.

He has raised it at what seems a high level with VAT HMRC and I should have someone ringing me back.

I have asked them to comment on whether restrictive practices such as this which is imposed on the non vat registered accounting / bookkeeping practice are legal :D

I will keep you all updated on my one person crusade.

[dp0848]

You deserve a medal for getting such a quick response from HMRC :D

[Philip Hoyle]

Well done Elaine. Ever thought of standing for election to the institute? It makes you wonder just what the professional bodies are doing for the smaller practitioner doesn't it?

[elainec100@cheapaccounting]

Well apparently all the major bodies knew about this in April and nothing has been done :rolleyes:

Me thinks the battle has just started .... :D

[Jaydee]

Well done Elaine - I would not have guessed that there would be a significant number of non-VAT-registered agents, but perhaps on reading this thread, there are.

In any event, the requirement is clearly a nonsense and I would hope that it had simply not been considered by HMRC rather than being by design.

[By way of an off-topic aside, I was equally surprised to read that ICAEW report that only 22% of sole practitioners have a website!]

[Julies bookkeeping]

I am so glad I joined this forum, I heard a rumour about this but dismissed it thinking it has got to be a load of bull.:|

Thank you for pointing it out and I would love to be kept up to date.

Not sure what we little people can do but if anyone has ideas I will support them.

Elaine we are behind you.:)

[elainec100@cheapaccounting]

Thanks for the support - I will keep you updated. It may of course come to nothing but you never know. :rolleyes:

[frauke]

I was aware of the rule, and most small accountants I know either:

- Use the clients login
- or the client still uses paper returns!

I recently tried to register a company so they could do their own returns over the Internet, but to set it up required knowing when they first registered for VAT - and they had no idea! All the dates we used were rejected - so we gave up.

[elainec100@cheapaccounting]

I was aware of the rule, and most small accountants I know either:

- Use the clients login
- or the client still uses paper returns!

I recently tried to register a company so they could do their own returns over the Internet, but to set it up required knowing when they first registered for VAT - and they had no idea! All the dates we used were rejected - so we gave up.

Fine - but from April 2010 you can't do paper!

[Jaydee]

but to set it up required knowing when they first registered for VAT - and they had no idea

They need to ask HMRC to re-send a VAT4 form (the Certificate of Registration) and the "Effective from" date shows on there.

[Kate Rolls]

Well done elaine
As a person just starting a bookkeeping practice this is news to me also... would be grateful if you could also keep me posted!

[elainec100@cheapaccounting]

OK a quick update on the email to my local MP Stephen Hesford (Labour - Wirral).

He said:

"I am keen to try to help. But before I go any further, can ask, what is to stop someone voluntarily registering for VAT. If this was done, surely then the problem would be solved?"

My response was:

If you voluntary register for VAT then the 17.5% vat is either absorbed by the practice / business or passed onto the client. If the client is not registered for vat then it costs them 17.5% more!

This seems a bit unfair to solve an IT issue. Would you say that this is what the government are trying to encourage then?



Apparently my original email has now been forwarded to the Treasury!

[Jenni384]

Nice one, Elaine :D

[dp0848]

I fired off a email to my MP last night also. I'll report back on any response that I get.

David.

[Jenni384]

I fired off a email to my MP last night also. I'll report back on any response that I get.

David.

Ditto, just sent an email now.
For anyone else interested, the website is www.writetothem.com
:)

[wood1e2]

It all sounds like the government got another consultant in, paid a fortune to get people backs up... :)

Although I am not overly happy with having to fill in a mlr100 !!! Still I am a grumpy old man...lol

[dp0848]

It all sounds like the government got another consultant in, paid a fortune to get people backs up... :)

Maybe next time the government should get Elaine in as a consultant. She has done more to improve their system in 24 hours than HMRC and its consultants did over the many months they undoubtedly took to think up this crap.

I'm sure Elaine could think of one or two ways to spend the nice fat fee as well :D

[elainec100@cheapaccounting]

Maybe next time the government should get Elaine in as a consultant. She has done more to improve their system in 24 hours than HMRC and its consultants did over the many months they undoubtedly took to think up this crap.

I'm sure Elaine could think of one or two ways to spend the nice fat fee as well :D

Thanks for that. I might feel guilty spending a big fat fee of tax payer money though :p

[elainec100@cheapaccounting]

Anyway another update.

This time from the ICAEW.

Whilst aware of the restriction on VAT filing for non VAT registered they were not aware of the conflict in timing of compulsory filing in 2010 and the system changes required to eliminate the restriction not being introduced until 2011.

They agree that this is an issue which needs sorting out and are taking the matter to the JVCC.

I am sure that this will take some time but I shall celebrate a small victory with getting them on board.

[Jenni384]

Excellent news Elaine, keep up the good work :D

[elainec100@cheapaccounting]

I would not have guessed that there would be a significant number of non-VAT-registered agents, but perhaps on reading this thread, there are.



Apparently HMRC estimate that 25,000 agents fall into this category!

[Nicster]

This is great! Thanks Elaine!

I file online for most of my clients and just have to submit returns through separate logins.

[ademoore]

I'm just wondering if this is an issue that the FSB can help out with!

[davebrown]

Hi. First post - didn't know this excellent forum existed. I've been working as a VAT consultant for 20 years but whilst working for VAT registered accountants it has never been an issue until now - when I enter the cold harsh world of self-employment in 2 weeks time.

Anyway, I read an interview with someone fairly high up in HMRC a week or two back to the effect that they are aware of the problem and are working on it. Little comfort as they knew they had a crap website and didn't do anything about it for a number of years either. Full marks to everyone who does an email to their MP as this must assist in getting something moving.

As an aside, I was a founder member of the first Working Together initiative on indirect tax, but this seems to have fallen by the wayside - the last meeting was about 2 years ago, and the present WTI meetings are primarily tax based and I refuse to sit through an hour an a half of tax just to hear a token 10 minutes about VAT.

[elainec100@cheapaccounting]

Update and success!

The ICAEW raised the matter with Geoff Lloyd who is the CT&VAT Director for HMRC.

His (written) response was that HMRC do expect to remove the VAT registered requirement for acting as a VAT Online Agent by April 2010.

Apparently the date quoted at the meeting was incorrect! :rolleyes:

A bit weird as I actually stayed behind after the meeting to query the date and to check that I did understand the impact on non vat registered agents. This plus several subsequent conversations with HMRC - none of which said that I have got the date wrong ... well :rolleyes:

Anyway the good news it that the matter is sorted and I am sure we are all happy :)

[Jenni384]

Excellent news, Elaine! Thank you :D

[Julies bookkeeping]

Well done Elaine, that is a weight of my mind.

I have not increased my fees since I started my business nearly 4 years ago would hate to think the only time I was going to raise them it would be for HMRC benefit.

[dp0848]

Elaine,

Well done and thank you for the time and effort you put in to this.

Regards.

David.

[taxattack]

Following Elaine's initiative, I wrote to my MP, and a Richard Askey at HMRC has replied.

Briefly, he attributes the current situation to pre Vat/IR merger, acknowledges the problem, and "confirms that we propose to address this issue before the introduction of compulsory online filing, planned for April 2010".

I'd prefer to read will address rather than propose to address, but at least it is on the agenda.

Chris

[elainec100@cheapaccounting]

Thanks Chris - the more pressure the better. According to HMRC this will affect 25,000 agents (accountants, bookkeepers etc)

[Philip Hoyle]

It's now over a year since this thread and I haven't seen anything from HMRC about the procedure for non vat registered accountants/bookkeepers to electronically file for their clients. Have I missed it or has nothing come out yet. Considering the new rules take effect in April 2010, time will soon be getting tight. It would be good to have the chance to try out their system in good time so that problems with registering/logging in etc can be sorted out before the compulsory electronic filing comes in. Has progress been made or do we all need to start lobbying the MPs, FSB etc to get things moving faster.

[frauke]

I been told by several people in the HMRC, over the last few months, that they are working on allowing all agents to VAT returns for clients online. (I think I have it somewhere on one of the WTG meeting minutes that I attend).

They are planning to make it possible before this end of year, but won't commit to a definite date until they know it when it will work!

[elainec100@cheapaccounting]

yes - they have promised for the end of year.

I will email my contact at ICAEW for an update and let you know.

[elainec100@cheapaccounting]

mail sent - he is on holiday.

[taxattack]

Following Elaine's initiative, I wrote to my MP, and a Richard Askey at HMRC has replied.

Briefly, he attributes the current situation to pre Vat/IR merger, acknowledges the problem, and "confirms that we propose to address this issue before the introduction of compulsory online filing, planned for April 2010".

I'd prefer to read will address rather than propose to address, but at least it is on the agenda.

Chris

I followed this up in June this year. Richard Askey replied:

I can confirm that extending the agents service for filing returns online to accountants who are not VAT-registered remains on track for delivery before compulsory online filing takes effect in April 2010.

Depending on the outcome of testing, our plan is to allow access in November this year.

[elainec100@cheapaccounting]

Hate to bring up an old thread but .....

An update on this

see here for details:

http://www.accountancyage.com/accountancyage/news/2253275/online-vat-opened-non-vat

well done HMRC

(how long did it take you to fix the omission in your program spec!)

[Philip Hoyle]

Just looked at the Govt Gateway and HMRC online pages and can't see how a non-vat registered agent can register to submit VAT returns for their clients? The Govt Gateway page is still asking for details of the agent's VAT details. Anyone else tried and if so, am I missing something?

EDITED - OK, found that once logged in as a agent on HMRC website there is a change in the menu after you've selected to register for online VAT as an agent, where you can apply for a non-vat registered agent reference number. I've done that, but the system crashes with an egg timer and it won't go further. So one step forward, two back. I'll keep trying, but if anyone has found a way of doing it that works, please let me know.

[elainec100@cheapaccounting]

Just looked at the Govt Gateway and HMRC online pages and can't see how a non-vat registered agent can register to submit VAT returns for their clients? The Govt Gateway page is still asking for details of the agent's VAT details. Anyone else tried and if so, am I missing something?

I have just got a vat number for an agent - didn't need to be vat registered but this link says to be able to act you need a 64-8 and for vat it cannot be completed on line:

http://www.hmrc.gov.uk/agents/authorisation.htm#5

So I think you would complete the 64-8 and then it would appear in your list?

Am I missing the point here?

[Philip Hoyle]

Am I missing the point here?

Yes, I've not even been able to set up as an agent yet. HMRC won't even be able to use a 64-8 to put a client on my client list if I've not got active "VAT online" on my login.

You can apply online for the VAT agent code, which is a XX1234 type of number (like the other agent ID codes for corp tax, PAYE, etc), but when I try to actually use the code to set up, it throws an error message.

Any other non-VAT registered agents getting anywhere with this yet?

[elainec100@cheapaccounting]

I applied for the code yesterday - pretended to be non vat registered and it gave me a code.

I used this link:

https://online.hmrc.gov.uk/registration/agent

Worked for me

[Philip Hoyle]

OK, I've tried that link which basically sets up a new agent identity, whereas I was wanting to add VAT online to my existing agent logins for PAYE, CT and SA. Got a new gateway login and also a new VAT agent number, but the same thing happens when I try to activate the service - error message telling me to call their helpline.

I've now tried phoning the helpline but it says they're experiencing high call volumes, suggest calling back later and then hangs up - not even the option to wait in the queue.

I've now emailed them.

Amazing that there's nothing on their service availability/issues pages to suggest that there is a problem. I wonder if there are so many people trying to register that the system just can't cope (now where've we heard that before!).

Anyone else trying to activate the service? It would be good to know how many have succeeded and how many are struggling. My two codes are only 172 apart, so if they are issuing them in numeric order, only 172 people have tried to register from yesterday morning to this morning, which seems fairly low.

[elainec100@cheapaccounting]

When the code is issued it did says it can take up to 24 hours to activate. So I shall now go to try to activate it.

[elainec100@cheapaccounting]

yep - same problem on all counts including help desk.

I am sending a mail to HMRC contact I have on this.

[elainec100@cheapaccounting]

Philip - try it now. It has just worked for me!