Which businesses have signed up for MTD
Any issues or a pain
I'm not just taking about FB members with a music orientated business - I'm asking any FB members with a vat registered business and what have you done about it so far - More useful if any info/help etc is from smaller oriented business like myself, with no or little admin and probably an annual turnover between 100K and 500K
Currently all my stock is on an XL spread sheet on a PC - I've created my own system - All input is handled by myself on a manual basis as and when stock arrives and sales are made - So when a guitar is sold I will input the price of the sale and another column automatically creates the level of vat due on that transaction - Take into account used guitars and the 'margin' scheme for vat
Spread sheet info is as follows
Guitar make/model Cost date sold sale inc vat vat profit
The above is applicable to all guitars in stock - For strings/accessories etc then all sales are accounted for manually on a daily/weekly/monthly basis - Vat is quickly accounted for as total sales divide by 1.2 - This figure is then manually added to the vat due on guitar sales
Each month I can then quickly create a total sales/profit/vat account - Then each 1/4 I create an appropriate set of figures - This is then manually fed into the HM Customs on line VAT return - Worked well for the last 15 years - Now I believe I need to change
Comments
Remember, it's easier to criticise than create!
I have a nagging recollection, but I don't know where from so don't quote me, that there was talk of HMRC or A N Other developing an add-in for Excel that would handle it for people with modest needs who currently use Excel. But I remain to be convinced, and I'm not sure I'd want to trust it.
We use Quickbooks Pro 2016 (desktop, non-sub version). We've been using it (and the previous one we had, which I think was 2007) to file online for ages but I think the MTD stuff is different to the existing online filing, and I can't yet find any details from Intuit as to whether we're screwed or not. Obviously they want us to move onto their new subscription-based approach, but they can FRO unless I absolutely have to.
Just doing our year end, so will be picking it up with the accountants shortly, although before Christmas they were largely in the "it's happening, but there's no actual useful info yet" camp. Which is about right for government stuff.
Spoke to a customer who is an accountant and he said it is like getting married next week, but as yet we have no venue or a guest list
It will apply to VAT periods commencing on or after 1 April 2019. So unless you do a monthly VAT return, the first return affected will be the quarter ending 30 June 2019 - or 31 July or 31 August if those are your quarters.
Not everybody has to use software - if your taxable turnover is less than the current VAT registration threshold of £85,000, you can carry on using the current online system. It's not exactly clear how they'll identify who can and who can't do this - I suspect there may be some "transitional arrangements" when we get to April.
Otherwise you will have to use some kind of compatible software like Xero or Sage. There is talk of "bridging" software which will let you take figures from existing records on Excel - or even paper records I suppose - and use the bridging software just for the VAT return. But I don't know the names of any branded bridging software, I'm afraid (but - EDIT - see Gavin's post above!)
Very basically the requirement is that records are kept digitally and that there is a "digital link" between the records and the VAT calculation (i.e. the nine boxes that get filed). As long as you are keeping sales and purchase day books which list the individual invoices then you should be fine. The only thing I'd be aware of is that retailers are being required to keep daily records off taking. It sounds like you are already recording guitar etc sales individually so that would leave accessories etc that you'd need to total up every day.
If you've got all this info on your quarterly spreadsheet all you need to do is have a page on the spreadsheet that calculates the values for the nine boxes of the return (as well as some other static info - VAT number etc). If you need to make adjustments for margin schemes etc then this can be done as a single entry on the calculation (maybe have a separate tab on the excel for the calc and then link it back into the main VAT calc?)
The real complication comes from how this is submitted. If you are using excel then you'll need to use "bridging software" to link into the VAT workings and then submit them to HMRC's new system. I'm aware of software that is being made available to accountancy firms but not an awful lots out there for individual businesses yet. As a short term solution we are offering to submit through our software so it might be worth asking your accountant if this is something they can do for you.
There are other options like moving onto an accounting package like Sage or Xero but, to be honest, if you are happy working with spreadsheets there isn't really a compelling reason to change.
I'm currently in the process of making sure all our clients are MTD compliant so if you have any questions just ask (or PM if more appropriate).
Handy reminder - my other half is also using Solar and we won't be forking for the subs version - same thing, don't want to be cornered. It only benefits the maker far as I can see, nothing much in it for the user except more costs.
Hoping the accountant will handle it but yes a good reminder, need to check...
Yes all daily sales (funds received) are recorded, be it misc or guitars - Ref misc then the funds received is the sales and vat adjusted accordingly - Ref guitars, then due to any part exchange transaction, plus the margin scheme, then the profit/vat has to be accounted for separately on an individual basis as against based on the amount of cash received
Thanks - Mark
I've just had an email from a software provider about their bridging software - https://www.absoluteexcelvatfiler.co.uk/
I've not looked into it yet but at the very least it should give you an idea on how the process works etc.
Yeah, they do Tax TV every month. It's like the Tonight Show with Jimmy Fallon, but (probably) more boring - Giles sits behind a desk and asks questions, Tim sits on a sofa and shares his wisdom. Has to be said HD doesn't do them any favours...
There's also Accounting TV with Giles and Guy Loveday. That's once a quarter.
That's one I linked earlier. It's on my shortlist being a standalone system so you don't have to use a third party gateway.