VAT returns "to be submitted digitally"

[Justin Smith]

The fact I`m having to get my info off a soddin` forum just speaks volumes about how all this "Make Tax Digital" is a complete farce... The fact it`s a supposedly business friendly Tory Govt just makes it all the more inexcusable. Incidentally, when I mentioned earlier about the contrast with how a Labour Govt tried to ease the burden on small businesses by introducing a flat rate VAT system, I didn`t state the most obvious difference, that scheme was voluntary. The business could either continue with the standard VAT system or swap to the flat rate system, nobody was telling them they had to do anything (other than pay their VAT, obviously)

 

[johndon68]

How do you mean it`s not really geared for retailers ?

It was designed, at least originally, to be used by self employed freelancers and contractors and it's features reflect that. For example, it doesn't, so far as I can see from their website, do stock control.

John

 

[Justin Smith]

It was designed, at least originally, to be used by self employed freelancers and contractors and it's features reflect that. For example, it doesn't, so far as I can see from their website, do stock control.

John

I`m not bothered about the stock control bit. We do a relatively small number of higher margin products. I know doing stuff on paper and physically checking the stock every week ( I don`t accurately count it every week.....) when I do my stock orders takes time, it`s not that much time. Furthermore I feel it gets all the numbers into my head better and helps me keep in close touch with it all. When our biggest suppliers stopped sending out paper invoices I found I lost a little contact on what was going on, I`d physically read the whole paper invoice, but when it`s on a pdf on a screen I just tend to skim through it, I`m unconvinced it "goes in" (to my brain) in the same way. I suspect it`ll be the same with computer based accounts over my faithful accounts ledger. In the latter, btw, I add little notes about unusual totals for any particular month so, when I look at the years resume I can instantly see what it was which caused that anomaly.
Further, part of this business is the rent from the flats over the shop, both the rents form them and the maintenance costs of them, I`m hoping this computer based thing won`t find that a problem. With my accounts ledger I can change cost centres as I want, amalgamate or split them out, at the drop of a rubber.....

 

[Maltesemagjc]

Is there any chance that MTD will be delayed does anyone think? Reasons for asking are myself and husband have run our own business for over 30 years using a Twinlock double entry system, fully paper system with a turnover of approx 500k. We process around 200 cash sale invoices a week and ok it’s time consuming but suits us, we know what we’re doing and are retiring in 2 years anyway. We live on an isolated farm (which is where our office is) ok we’ve got an internet connection but very slow, internet banking times out for security etc. Can’t dowload films, watch you tube etc. Will there be any provision for people like us?

 

[UK Contractor Accountant]

Is there any chance that MTD will be delayed does anyone think

Not in my opinion. Letters already going out to VAT traders over the limit. Some are already submitting digitally under the Pilot Scheme.

There are exceptions so check the Gov.Co website for full details.

 

[SteveHa]

I think there was some case law a few months back where the judge throw out HMRC's penalties demand as they were not issued by a 'human'. Not sure if went to appeal. @SteLacca should know.

Sorry, I completely missed this, but yes, I do (and in fact there has been more than one):

Jacqueline Haigh V HMRC (TC06601) (para 4(11) is useful)
Khan Properties Ltd v HMRC (TC06225) (§23)
Expion Silverstone (TC06638) (10(3))
Paul Smith (TC06639) (§11)

I'm pretty sure that there have been a couple more since.

 

[paulears]

There is the facility to ask for exemption - it's on the HMRC site in the VAT section. The available reasons fall into sections, and I think internet connection is one of them. Incidentally - are you without phone service too? You could always use that if it works for your internet service?

 

[Justin Smith]

Is there any chance that MTD will be delayed does anyone think? Reasons for asking are myself and husband have run our own business for over 30 years using a Twinlock double entry system, fully paper system with a turnover of approx 500k. We process around 200 cash sale invoices a week and ok it’s time consuming but suits us, we know what we’re doing and are retiring in 2 years anyway. We live on an isolated farm (which is where our office is) ok we’ve got an internet connection but very slow, internet banking times out for security etc. Can’t dowload films, watch you tube etc. Will there be any provision for people like us?

It must be very frustrating for you being two years from retirement. If I was two years from retirement I`d consider shutting my business down (or selling it) early, I`m sure t5here will be a significant number of people in that position who do just that.
I am a bit surprised you do all your won books and on paper (both just like me) for a business turning over £500K a year ! I`m only just over the VAT threshold so feel particularly aggrieved their is no dispensation for me. Arguably there should be a dispensation for MTD for companies who do their own books and turnover, say, less than 250K (or £500K ! ), because it`s them who are going to take the biggest hit from this. It really won`t make much difference to companies who use an accountant, or who employ an accountant.

 

[paulears]

For two years it would be better to ask an accountant to set you up an account on one of the simple systems where you just enter the figures and let them do the online reporting. By the time HMRC get around to chasing those who didn't know/didn't bother, sorting them and then getting back to normal business, you'll have retired.

 

[Maltesemagjc]

There is the facility to ask for exemption - it's on the HMRC site in the VAT section. The available reasons fall into sections, and I think internet connection is one of them. Incidentally - are you without phone service too? You could always use that if it works for your internet service?

Thanks for the reply, yes did ask about exception due to internet connection but they said if we’ve already been submitting our returns online (which we have as only takes 5mins once all the figures are in) we won’t be exempt. They did say that there’ll be more info at the end of this month about exclusions et .

 

[Maltesemagjc]

It must be very frustrating for you being two years from retirement. If I was two years from retirement I`d consider shutting my business down (or selling it) early, I`m sure t5here will be a significant number of people in that position who do just that.
I am a bit surprised you do all your won books and on paper (both just like me) for a business turning over £500K a year ! I`m only just over the VAT threshold so feel particularly aggrieved their is no dispensation for me. Arguably there should be a dispensation for MTD for companies who do their own books and turnover, say, less than 250K (or £500K ! ), because it`s them who are going to take the biggest hit from this. It really won`t make much difference to companies who use an accountant, or who employ an accountant.

Thanks for the reply. Yes we would like nothing more than to retire now but unfortunately that isn’t an option for at least 2 years. We are currently talking to our accountant regarding costs of setting things up for us then, going forward, when we retire the new owner could take over where we leave it. Last thing we need to be doing though to be honest.

 

[Maltesemagjc]

For two years it would be better to ask an accountant to set you up an account on one of the simple systems where you just enter the figures and let them do the online reporting. By the time HMRC get around to chasing those who didn't know/didn't bother, sorting them and then getting back to normal business, you'll have retired.

Thanks for the reply. Yes we have actually spoken to our accountant and he’s looking into our options. HMRC have said that there’ll be more info about help etc at the end of this month .....

 

[Clinton]

... they said if we’ve already been submitting our returns online (which we have as only takes 5mins once all the figures are in) ...

Only takes 5 mins? Great! People who objected to HMRC's power grab in forcing things online should have stood up and fought at the time, like I did.

Don't stand up for a principle, bend over and acquiesce because it's easier or takes "just 5 mins", and it could come back and bite you in the backside.

 

[paulears]

If your internet can cope with the old system, then maybe one of the simple reporting apps people are producing where you type in the usual box info, and it converts and submits it would work for you? ~Carry on the old paper system, add the figures into the app, rather than on-line, and then it submits them. There are lots of software sources on the HMRC site - but that also assumes your internet can manage that!

 

[Maltesemagjc]

If your internet can cope with the old system, then maybe one of the simple reporting apps people are producing where you type in the usual box info, and it converts and submits it would work for you? ~Carry on the old paper system, add the figures into the app, rather than on-line, and then it submits them. There are lots of software sources on the HMRC site - but that also assumes your internet can manage that!

Thanks for the reply . Yes I’ve just spoken to someone who mentioned that today and then some kind of bridging software, don’t understand it really but sounds like that would be an easier option subject to our internet coping. Our internet makes everything so difficult that’s really why we’ve carried on with a double entry manual booking system for so long. Can do short tasks ok but things like internet banking cuts off because it takes too long to connect.

 

[numbersrule]

I'm just a few clicks away from filing our first MTD Vat return in the pilot scheme.
Once you take the time to get signed up its quite readily manageable.
I've never really understood why any paper accounts still survive. Spreadsheets have been around for decades, so what do you mean by paper accounts these days? Surely you're not adding up your VAT totals by calculator and writing it down?

 

[Justin Smith]

I'm just a few clicks away from filing our first MTD Vat return in the pilot scheme.
Once you take the time to get signed up its quite readily manageable.
I've never really understood why any paper accounts still survive. Spreadsheets have been around for decades, so what do you mean by paper accounts these days? Surely you're not adding up your VAT totals by calculator and writing it down?

I use paper accounts, and yes, by definition, I use a calculator with them. They do have advantages actually, e.g. they`re more flexible, I can add or alter or amalgamate cost centres etc, plus, the fact they keep me in touch with the figures so much better. They go into my brain. As my suppliers stopped sending out invoices, just pdfs by E Mail, I don`t actually study them like I used to.
The fact is, however HMRC may like to tell me they`re doing me a favour forcing me to use a digital system, I know how to use my paper books, they don`t take that long, and I don`t have to pay some IT supplier £20 a month (or whatever it is) for "the system".
There`s deeper point here, it concerns me that to conducts more and more of my business (and indeed life) I need to become a sodding IT expert, or rely on other people to sort out problems in that area. I don`t like it one bit, I prefer self reliance and not wasting my time having constantly update my IT skills and/or software.....

 

[numbersrule]

There`s deeper point here, it concerns me that to conducts more and more of my business (and indeed life) I need to become a sodding IT expert, or rely on other people to sort out problems in that area. I don`t like it one bit, I prefer self reliance and not wasting my time having constantly update my IT skills and/or software....

I do sympathise with you Justin as life, the universe and everything will always be changing and providing us with new challenges to keep up with ( until we retire of course, after which the requirement to evolve lessens a little ). But consider what sort of world would we inhabit if nothing ever changed and we lived in a kind of equilibrium stasis, suspended forever at the same point in our development cycle? That would present challenges in itself. Life evolves naturally, for individual living things as well as species on a wider communal evolution. Our technological advancement is a physical manifestation of the evolution of our minds. Prolonged stasis is unhealthy for evolutionary beings. In terms of deeper points it depends on what level of deeper delving you want to stop at.

 

[Higgsy]

I honestly don't understand the problem (it may be that I am slightly younger..).

The best thing I did was move to a digital accounting software. I moved my companies all on to Xero, which works from the computer, and our smartphones. We register our receipts, make quotes, make invoices from our phones. A few times a month either myself or the wife logs on the computer, reconcile our accounts/commercial cards, PAYE. Every 3 months, we click VAT report, click submit and pay the amount...

It is 100 x quicker, and sorts out our exempt work too.

 

[Justin Smith]

I honestly don't understand the problem (it may be that I am slightly younger..).

The best thing I did was move to a digital accounting software. I moved my companies all on to Xero, which works from the computer, and our smartphones. We register our receipts, make quotes, make invoices from our phones. A few times a month either myself or the wife logs on the computer, reconcile our accounts/commercial cards, PAYE. Every 3 months, we click VAT report, click submit and pay the amount...

It is 100 x quicker, and sorts out our exempt work too.

How can it be 100X quicker ? You still have to log all the data it`s just you`re not writing it down you`re entering it into a computer. Actually calculating the VAT doesn`t even take 5 minutes, it`s all the work up to that point which takes the time.

 

[Justin Smith]

I do sympathise with you Justin as life, the universe and everything will always be changing and providing us with new challenges to keep up with ( until we retire of course, after which the requirement to evolve lessens a little ). But consider what sort of world would we inhabit if nothing ever changed and we lived in a kind of equilibrium stasis, suspended forever at the same point in our development cycle? That would present challenges in itself. Life evolves naturally, for individual living things as well as species on a wider communal evolution. Our technological advancement is a physical manifestation of the evolution of our minds. Prolonged stasis is unhealthy for evolutionary beings. In terms of deeper points it depends on what level of deeper delving you want to stop at.

I accept much of what you`re saying, the bit I have a problem with is when the Govt force people to act in a certain way, that`s when it becomes unacceptable because the people have no choice like they would if, say, they were dealing with another business and didn`t like the fact you couldn`t phone them up and speak to a real human. In that example you, as the customer, you have the choice to go elsewhere if you so choose.

 

[Higgsy]

How can it be 100X quicker ? You still have to log all the data it`s just you`re not writing it down you`re entering it into a computer. Actually calculating the VAT doesn`t even take 5 minutes, it`s all the work up to that point which takes the time.

Sorry for using a phrase "100x quicker", I will make sure I calculate it more accurately on my next return...

The work up to that point it easy, once you've added receipts/invoices/bills on your phone, its done on the go.. Therefore there's no sitting down with a pen and paper at the end of the month. The data is there already, so no paperwork to fill in.. I don't understand how you cant see this.

Unfortunately, in todays day and age, you have to move forward from being a dinosaur.

Or as you say, retire early if you can't deal with it.
You can't change what's coming into place, so you might as well find a system that you like and understand.

 

[Justin Smith]

Sorry for using a phrase "100x quicker", I will make sure I calculate it more accurately on my next return...

The work up to that point it easy, once you've added receipts/invoices/bills on your phone, its done on the go.. Therefore there's no sitting down with a pen and paper at the end of the month. The data is there already, so no paperwork to fill in.. I don't understand how you cant see this.

Unfortunately, in todays day and age, you have to move forward from being a dinosaur.

Or as you say, retire early if you can't deal with it.
You can't change what's coming into place, so you might as well find a system that you like and understand.

So what you appear to be saying is it may not actually be that much quicker, it`s just that you spread the work out over the month rather than do it all at the same time.

 

[Scalloway]

I don't know about you but I can key stuff onto accounting software a lost faster then I could write it out. Most software autofills the standard information nowadays, you just have to key the amounts.

 

[Philip Hoyle]

I don't know about you but I can key stuff onto accounting software a lost faster then I could write it out. Most software autofills the standard information nowadays, you just have to key the amounts.

Yes, I'm the same. Some software is really fast for data entry, particularly VT which uses tab keys, auto fill and analysis memory. Also very fast for reallocating mispostings - just tick and reclassify one or multiple items. Shame that no one has replicated it to an online system.

 

[Deleted member 315707]

So what you appear to be saying is it may not actually be that much quicker, it`s just that you spread the work out over the month rather than do it all at the same time.

Maybe spend all the energy you’re wasting ranting and moaning about the law into learning these new fangled software applications?

Or should we roll back all progress?

 

[Higgsy]

So what you appear to be saying is it may not actually be that much quicker, it`s just that you spread the work out over the month rather than do it all at the same time.

Read the below quotes....

I don't know about you but I can key stuff onto accounting software a lost faster then I could write it out. Most software autofills the standard information nowadays, you just have to key the amounts.

Yes, I'm the same. Some software is really fast for data entry, particularly VT which uses tab keys, auto fill and analysis memory. Also very fast for reallocating mispostings - just tick and reclassify one or multiple items. Shame that no one has replicated it to an online system.

Maybe spend all the energy you’re wasting ranting and moaning about the law into learning these new fangled software applications?

Or should we roll back all progress?

The above quote I like too... Stop moaning, or earn less. HRMC aren't going to change because you don't want to! It is that simple.

 

[Justin Smith]

Maybe spend all the energy you’re wasting ranting and moaning about the law into learning these new fangled software applications?

Or should we roll back all progress?

It`s certainly progress for HMRC, that I grant you, but in this context technically I`m the customer, as I`m paying them. It`s interesting, whenever I mention to people, face to face I mean, that the HMRC are telling me to change all my accounts procedures, and at a cost to me, just so I can continues pay them thousands of pounds, not one has said "I think that`s fair enough", quite the opposite in fact.

As regards complaining, in my experience too few people complain (certainly not too many) that`s why so many companies get away with shite service these days.

 

[Justin Smith]

Some might find this info helpful.
I wondered how much it`d cost me to employ an accountant to file my VAT. I phoned one recommended by a friend and had a chat with him. I explained I did all my own VAT and books and have done for 20 years on paper, the good old "Guildhall Headliner". Thanks to the HMRC that`s no longer good enough so as an alternative to me spending money and loads of time learning a new digital system how much would they charge to take my worked out figures put them into a digital system and submit them to the HMRC digitally. The chap (correctly) surmised that my books were well organised and in good order and said if we could also link to your bank account it`d be about £100 a quarter. To also do the end of year / self assessment would be another £200, i.e. a total of £600.
Personally, for my business things are rather complicated by the fact I don`t know how long (after 25 years.....) my business will be in viable, so all the time I spend learning how to do digital accounts may not have a long term payback.
All in all, for me, it`s a a bit of a lose lose decision !

 

[paulears]

I’m paying around 25 a month for FreeAgent with the receipt bank add on that let’s me enter receipts from my phone. A sceptic at first I now really like it and it’s already reminding me about overdue invoices and emailing reminders. All the weird things I do it’s coped with so far.

 

[Justin Smith]

Fortunately I`m an RBS customer so actually get FreeAgent free, but, of course, it`s the time to learn all about using it (particularly, I suspect, at year end) which is the real cost. As I said above if I`m unsure how long I`m going to bother keeping the business going the return on that invested time is obviously more dubious.
On the positive side, the people at FreeAgent seem helpful and reasonably easy to get through to. Whether that`ll still be the case late March / early April (when this all really kicks off for people forced to switch over) is, of course, another matter.....

 

[Justin Smith]

Fortunately I`m an RBS customer so actually get FreeAgent free, but, of course, it`s the time to learn all about using it (particularly, I suspect, at year end) which is the real cost. As I said above if I`m unsure how long I`m going to bother keeping the business going the return on that invested time is obviously more dubious.
On the positive side, the people at FreeAgent seem helpful and reasonably easy to get through to. Whether that`ll still be the case late March / early April (when this all really kicks off for people forced to switch over) is, of course, another matter.....

If the huge drop off in business since late January (it`s actually unprecedented for me) continues we will end up being under the VAT threshold, possibly by as soon as late Autumn. Thus the time I invest learning this new system will be largely wasted and therefore it`s even more annoying. It`s a pity ones VAT threshold cannot be calculated on the last quarter because we may well be under the VAT threshold by the 1st Apr, then I could legitimately say to the HMRC stuff your MTD !
Is there any chance the VAT threshold will be raised in the next few months ! ? !

 

[James Martini]

Is there any chance the VAT threshold will be raised in the next few months ! ? !

The VAT-registration threshold is frozen at £85k until April 2022(see page 50), at which point it's likely to change. The only way it may change in the next few months is if there's a change in government.

 

[steven wild]

I am a sole trader Green Grocer and all my sales from the till are cash and all zero rated.
I am above the threshold so am currently registered for vat and get vat back on fuel and other things.
I do all my book keeping on a simple ledger and fill in the relevant boxes manually on my quarterly VAT return.
I am old school 65 years of age and although i get by using a computer i am not that good with the use of spread sheets and Excel.
I use an accountant for my tax return but with limited amount of spare cash i did not want to pay him to do my vat returns.
Any help in recommending a cost effective software to suit my business would be much appreciated.
Thanks in advance
Steve

 

[urstop]

I am a sole trader Green Grocer and all my sales from the till are cash and all zero rated.
I am above the threshold so am currently registered for vat and get vat back on fuel and other things.
I do all my book keeping on a simple ledger and fill in the relevant boxes manually on my quarterly VAT return.
I am old school 65 years of age and although i get by using a computer i am not that good with the use of spread sheets and Excel.
I use an accountant for my tax return but with limited amount of spare cash i did not want to pay him to do my vat returns.
Any help in recommending a cost effective software to suit my business would be much appreciated.
Thanks in advance
Steve

We use accountsdesk.co.uk for our MTD VAT. It's free in the first year and about 1£ a month from the year after. They provide custom solutions as well tailored to your business needs and the way you maintain your books. Try them and see if they can help you will your ledger.

 

[Chart Accountancy]

I am a sole trader Green Grocer and all my sales from the till are cash and all zero rated.
I am above the threshold so am currently registered for vat and get vat back on fuel and other things.
I do all my book keeping on a simple ledger and fill in the relevant boxes manually on my quarterly VAT return.
I am old school 65 years of age and although i get by using a computer i am not that good with the use of spread sheets and Excel.
I use an accountant for my tax return but with limited amount of spare cash i did not want to pay him to do my vat returns.
Any help in recommending a cost effective software to suit my business would be much appreciated.
Thanks in advance
Steve

FreeAgent cloud bookkeeping and MTD compliant for your VAT returns filing. You will also find many accountants supporting the software so you will receive a good discount through an accountant who will also prepare your sole trader accounts and file your tax return.

 

[paulears]

I've read lots of posts about how terrible it is, how expensive, how time consuming etc etc - but HMRC is not like a customer to us, and we are not a customer of theirs. Let's be honest here. Lots of people, and they turn up on this forum frequently - are idiots when it comes to the nuts and bolts of running businesses. We have the people who forget that VAT collected is not theirs, and have spent it. We have people asking crazy questions about legitimate business expenses. So are as a result overpaying tax, others underpaying. People trying hard, but they forget that the hundred quid in cash in the wallet is meant to be entered into the business accounts. HMRC know from their inspections that not all of us do it correctly. I don't know exactly what access to computerised accounts they have on the new systems, but I bet it's more than just a few numbers for a box filling exercise. Perhaps it's because computerised records are less likely to miss of zeros, and they keep track of everything? I really don't blame them for wanting people to use proper software. If they make inspections looking at a software screen makes their life easier than looking through baskets of paper. My new system has saved me at least a couple of hundred quid so far by spotting potential problems, and using my phone to photo the invoices and receipts works damn well. Seeing things come up on a screen and having tom simply agree them is a brilliant concept. The hours I spent adding in postal receipts for example has virtually gone now. I was very unhappy when I first heard about it, but the benefits are very clear.Software is more accurate, simpler, immediate and less of my life wasted!

 

[Justin Smith]

HMRC : "There`s help for MTD via Webinars and You Tube videos"

Question : What`s a Webinar ?

Answer : A way to save money on education.
But it can`t be that effective, if it was why not shut down all the schools and do it all via Webinars ! How much money would that save ? More than Making Tax Digital I`d warrant......

If HMRC would come round here and show me how to do all my accounts in FreeAgent I`d be slightly less cynical about the whole thing !

 

[Scalloway]

The difference between people watching an HMRC webinar and a child in school is motivation. If the average child was sat at home looking at a screen for their education most of their time would be spent on social media. As a business owner you want to run your business properly so you will pay attention to your online learning.

 

[Deleted member 315707]

HMRC : "There`s help for MTD via Webinars and You Tube videos"

Question : What`s a Webinar ?

Answer : A way to save money on education.
But it can`t be that effective, if it was why not shut down all the schools and do it all via Webinars ! How much money would that save ? More than Making Tax Digital I`d warrant......

If HMRC would come round here and show me how to do all my accounts in FreeAgent I`d be slightly less cynical about the whole thing !

You are clearly not adaptable to change and that's OK, yes I am surprised you are in business and have any customers with your attitude but maybe some people like dealing with the obnoxious. For everyone else's benefit HMRC have already said if it's not reasonably practicable for you to use digital tools to keep your business records or submit your VAT Returns because of age, disability, remoteness of location or for any other reason you don't have to.

End of story.

Or if you would rather spend your whole day moaning on here to people who cannot change the law, likely don't give a stuff about your narrow minded, ill-thought through points, ignore their helpful advice and rant and rave about how difficult everything is.. then give up. You don't have to run a business and you're literally just wasting everyones time when they could be supporting people without a rod up their a***...