Paying VAT using MTD software : FreeAgent

Discussion in 'Accounts & Finance' started by Justin Smith, May 22, 2019.

  1. justintime

    justintime UKBF Regular Free Member

    516 69
    I don't think either John or myself were referring to digital links. There is still an obligation to keep digital records (ie on software or a spreadsheet) although it is accepted there will be no penalties applied until after March next year.
     
    Posted: Jun 5, 2019 By: justintime Member since: Apr 12, 2009
    #21
  2. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

    4,621 770
    only the 9 box figures entries go across at the moment under MTD VAT which HMRC said would be the case so as to give small businesses another year before going down the full digital route with digital links.

    So in theory you could just enter the 9 box entry figures onto a spreadsheet and then file using bridging software.
     
    Posted: Jun 5, 2019 By: UK Contractor Accountant Member since: Sep 18, 2013
    #22
  3. John Hemming

    John Hemming UKBF Regular Full Member

    135 17
    There is an obligation to have digital records somewhere, but there is no mandatory requirement to have digital links and a couple of lines can be typed in online.

    To a great extent HMRC are looking for people to be moving in the right direction. I am encouraging people to use an online cashbook which is fully 2020 compliant. However, one needs to recognise at times people end up in a rush having to do things before a filing deadline.
     
    Posted: Jun 5, 2019 By: John Hemming Member since: May 23, 2019
    #23
  4. John Hemming

    John Hemming UKBF Regular Full Member

    135 17
    I think a lot of people are taking a similar view. In fact the digital records do not have to be created until just before the return is filed. Hence it is possible to type them up at that stage. I don't recommend this, but I did have someone put all the records in in one evening and then submit a return. That would, in fact, be lawful even after 1 April 2020.

    My advice to accountants is to have moved at least one client to MTD well before it becomes mandatory. It is a bit fiddly getting the ASA to work and it is worth getting to understand the processes.

    I think the government gateway will feel a lot of strain and a lot of people won't be aware that they need to apply to join MTD at least a week and a half before the filing deadline. I had someone today who was too late to join for the end of April quarter, but that, of course, is not mandatory.
     
    Posted: Jun 5, 2019 By: John Hemming Member since: May 23, 2019
    #24
  5. Justin Smith

    Justin Smith UKBF Enthusiast Full Member

    568 59
    Thanks for all this Mr Osborne......
     
    Posted: Jun 6, 2019 By: Justin Smith Member since: Jun 6, 2012
    #25
  6. John Hemming

    John Hemming UKBF Regular Full Member

    135 17
    I am dealing with a lot of people where people who are not particularly technical and not particularly knowledgeable about accounts are doing vat via MTD without any real difficulties. (in the end).

    I am not quite sure when these proposals popped out of HMRC, but it is not the same as SAF-T which is an OECD proposal that has been around for a long time.
     
    Posted: Jun 6, 2019 By: John Hemming Member since: May 23, 2019
    #26
  7. Justin Smith

    Justin Smith UKBF Enthusiast Full Member

    568 59
    It may well be the same for me, but, as I understand it, paying my VAT (via Freeagent) requires me to also do all of the my accounts using FreeAgent, and I`m required to enter all the figures for the balance sheet for the last financial year in order to start it off *. Thus I am also having to learn how to do my years accounts in a way FreeAgent wants me too because it`s also linked to my bank accounts. As an example, when working out my cash account I have always simply adjusted the amount "on hand" by subtracting monies I owe (on the 31st March), it works out the same in the end, assuming I actually pay the bills which I always do. Now I have to start a new system of debtors and creditors.....
    Of course I could always get an accountant to do it all, but that`d be an extra thousand pounds a year or so thanks very much.

    * Technically I don`t think my business even needs to have a balance sheet, so straight away that`s an extra task I`ve been landed with.
     
    Posted: Jun 6, 2019 By: Justin Smith Member since: Jun 6, 2012
    #27
  8. John Hemming

    John Hemming UKBF Regular Full Member

    135 17
    From my point of view from time to time I am having to teach people how to do a bookmark on the browser. So once I have gone through how browsers work, what browser people are using, how to tell what browser you are using and things like that there is quite a bit of support work.

    The cash book itself is just a cashbook for a sole trader. It does not require people to put in a balance sheet as it is designed to be very easy to use. (easy in the sense of little learning and no setup beyond typing in the vat number, period end date and name and address of business.
     
    Posted: Jun 6, 2019 By: John Hemming Member since: May 23, 2019
    #28
  9. Justin Smith

    Justin Smith UKBF Enthusiast Full Member

    568 59
    Sorry if you`ve already answered this John, but I didn`t see it (or understand it ! ), will your digital cash book still be MTD compliant from 2020 when, if I`ve understood this correctly, something else is due to change in the MTD firmament ?
     
    Posted: Jun 6, 2019 By: Justin Smith Member since: Jun 6, 2012
    #29
  10. John Hemming

    John Hemming UKBF Regular Full Member

    135 17
    Its only that Digital Links are mandatory. There is no sense me doing the coding now if it is not compliant in 2020. The Digital Links are in the cashbook already.

    The difference is that last week I had a client who had summary figures from digital records and needed to submit a vat return. We just typed the summary figures into the cloud cashbook (with the agreement of HMRC) and submitted from there. It took a couple of minutes. In the future this client will get full digital links going, almost certainly before the end of this year.

    The cloud cashbook links to the bridging software (which runs on the same server) which links to HMRC.
     
    Posted: Jun 6, 2019 By: John Hemming Member since: May 23, 2019
    #30
  11. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

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    Nothing has really changed for most vat registered traders >£85K turnover as most were keeping some form of digital records - mainly spreadsheet based record keeping.

    The ones already using software it was just a matter of upgrading to file under MTD.
     
    Posted: Jun 6, 2019 By: UK Contractor Accountant Member since: Sep 18, 2013
    #31
  12. John Hemming

    John Hemming UKBF Regular Full Member

    135 17
    Once people are used to it it does not take long. There are, however, still some people doing manual books who have turnovers over 85K.
     
    Posted: Jun 6, 2019 By: John Hemming Member since: May 23, 2019
    #32
  13. Justin Smith

    Justin Smith UKBF Enthusiast Full Member

    568 59
    We must remember that for some trades (e.g. retail) £85K t/o really isn`t that big a business, and another £1000+ on your costs (having to employ an accountant) is significant.
     
    Posted: Jun 7, 2019 By: Justin Smith Member since: Jun 6, 2012
    #33
  14. John Hemming

    John Hemming UKBF Regular Full Member

    135 17
    I am dealing with tradespeople who are doing MTD themselves perfectly well.
     
    Posted: Jun 7, 2019 By: John Hemming Member since: May 23, 2019
    #34
  15. Justin Smith

    Justin Smith UKBF Enthusiast Full Member

    568 59
    I`ve just been on the phone to FreeAgent for 20 minutes trying to fathom out how to set it up. I`d have thought I know a bit about books and stuff (I`ve just done my accounts for 2018/19) but, to be frank, I didn`t understand half of what he was telling me. What, for instance, is Deferred VAT... In the end he said I should speak to my accountant, to which the obvious question is if I had an accountant why would I be using Free Agent ? ! ?
    The chap from FreeAgent was saying if all I want to use this software for is to pay my VAT I could use a simpler system than FA, but, obviously (and just like HMRC) he couldn`t give me any advice as to which to use.....
    TBH I don`t even know where to go from here.
     
    Posted: Jun 11, 2019 By: Justin Smith Member since: Jun 6, 2012
    #35
  16. consultant

    consultant Your Business Community Staff Member

    5,436 751
    Justin,

    software does not replace an accountant!

    It does speed things up, can save you money on bookkeeping costs and let you see different views on business performance.

    When you did your accounts, how do you know you made the maximum savings for you and your business?

    A good accountant is not a cost - they are an investment!
     
    Posted: Jun 11, 2019 By: consultant Member since: Jan 21, 2008
    #36
  17. paulears

    paulears UKBF Big Shot Full Member

    3,927 974
    I'm really into the new software I'm using. it's more efficient than my old software that wasn't compliant. It will save me money on accountancy, I lose less small receipts, the invoicing I rather like, the ability to access the accounts anywhere and anytime works well. I really n' find anything to complain about. I was pretty annoyed when I first found out about it, but it's been a good experience for me.
     
    Posted: Jun 11, 2019 By: paulears Member since: Jan 7, 2015
    #37
  18. Scalloway

    Scalloway UKBF Legend Free Member

    15,130 3,211
    Posted: Jun 11, 2019 By: Scalloway Member since: Jun 6, 2010
    #38
  19. Justin Smith

    Justin Smith UKBF Enthusiast Full Member

    568 59
    I now use Cirrostratus / Vat Direct, and it`s much easier to use, in fact I`ve just filed and paid my first VAT return using the system. At the moment I admit I still do my accounts on paper and just transfer the figures to the spreadsheet, at least this acts as a check that the two sets of figures agree. I may, at some point in the future just use the software, but probably not for some time, quiet apart from anything my work PC lacks room around it for all the paperwork, and my desk is right next to the filing cabinet !
     
    Posted: Jul 23, 2019 By: Justin Smith Member since: Jun 6, 2012
    #39
  20. paulears

    paulears UKBF Big Shot Full Member

    3,927 974
    I rather like the feature in FreeAgent where once you put the VAT payment through, the figures are locked so in a months time and you find an old receipt, you can't wreck the figures by accidentally entering it.
     
    Posted: Jul 23, 2019 By: paulears Member since: Jan 7, 2015
    #40