BARNES ROFFE LLP MAKING TAX DIGITAL WHERE ARE WE NOW? 25 APRIL - - PowerPoint PPT Presentation

BARNES ROFFE LLP

MAKING TAX DIGITAL WHERE ARE WE NOW? 25 APRIL 2019

BARNES ROFFE LLP

KEITH MASON BSc FCA CTA Partner CHRISTOPHER WATSON Accounting Services

BARNES ROFFE LLP

CHRISTOPHER WATSON ACCOUNTING SERVICES

• First full return starting 01st April onwards.
• First quarters under MTD will be:

– 30th June 2019 – 31st July 2019 – 31st August 2019

• For monthly returns the first return will be 30th

April 2019.

• For annual accounting schemes it is the first full

return after 31st October 2019.

Quick recap, when does MTD (for VAT) apply?

• VAT registered business’s above £85,000 turnover

after 01st April 2019.

• Deferral of 6 months for VAT groups, charities,

not for profit orgs, annual accounting, or those required to make VAT payments on account.

• Must be on a compliant software or have use of

“bridging software” to link excel spreadsheets to a compatible format. HMRC maintains a list of proven providers on the below link.

• https://www.tax.service.gov.uk/making-tax-

digital-software

Quick recap, who is affected by MTD?

• Submit the final VAT return under the old rules.
• Wait 5 working days after submission to sign up.
• Must sign up 15 days before the end of the first

MTD compliant return.

• You will receive an email to confirm sign up from

HMRC within 72 hours.

• HMRC have advised unpaid VAT liabilities could

delay the signup process.

• Are you on monthly VAT?

HMRC guidance on signing up to MTD

• March returns could be submitted as late as 07th

May 2019, but you must sign up 15 days before the month end, i.e. by 15th April.

• If you are monthly and have not yet signed up you

are already late; do this now!

• Signing up before the March month is submitted

may force you to comply with MTD for March in addition to April; be prepared for this.

Contradictory area for monthly VAT!

• Do you have a HMRC government gateway

account?

• Is it linked to your VAT submissions?
• Have you forgotten the login?
• Do you have the correct software and have you

checked it is compatible?

• Have you signed up to bridging software if you

wish to continue using or start using Excel?

Signing up to Making Tax Digital. Key matters before starting

• If you are an accountant you need:

– Client’s VAT Number – Date of VAT registration – Principal place of business postcode – Box 5 figure of the last return submitted – The month the last VAT payment was made

• If you are a business owner you need:

– An active government gateway account – VAT Number – Company UTR number (correspondence from HMRC) – Company number. Can be found on https://beta.companieshouse.gov.uk/

Signing up to Making Tax Digital. What you need before starting

I do not have a HMRC government gateway account

Go to the Gov.uk website and type “HMRC Login” into the search bar. The following will appear and you will go to the highlighted link to create your account. Step 1: set up your HMRC account for yourself/your company.

I do not have a HMRC government gateway account

I do not have a HMRC government gateway account

I do not have a HMRC government gateway account

Success! Your HMRC account is now online. Save this 12 digit user ID somewhere safe. Now that the HMRC account is set up, we move

• nto Step 2.

Linking the Gateway account to your VAT.

Linking the gateway account to your VAT number

Linking the gateway account to your VAT number

Past this point the details requested by HMRC are similar to future questions we will cover when setting up MTD. Complete the boxes until your VAT is successfully linked to the HMRC account.

Telling HMRC you wish to sign up to Making Tax Digital

Visit the Gov.uk website and search “Sign up for Making Tax Digital” For any business owners you will use this link to sign up. For any accountants with an active agent services account, use this link. There is no in-between, you are either one or the other!

Telling HMRC you wish to sign up to Making Tax Digital - Agent

• Firstly we will demonstrate the agent login. This will be for

accountants signing up their clients. A long list of questions will follow:

CLIENTS VAT Number

Telling HMRC you wish to sign up to Making Tax Digital - Agent

• And more…

Telling HMRC you wish to sign up to Making Tax Digital - Agent

• And more...

YOUR email address

Telling HMRC you wish to sign up to Making Tax Digital - Agent

• And now you are ready:

Telling HMRC you wish to sign up to Making Tax Digital - Agent

• HMRC will now email within

72 hours to confirm you have signed up your client.

Telling HMRC you wish to sign up to Making Tax Digital - Agent

• Be aware you will only

receive a generic email from HMRC to confirm signup. Ensure you have a way of tracking who you have signed up.

• Business owners will follow similar procedures to the

agent signup. The below should seem familiar:

Telling HMRC you wish to sign up to Making Tax Digital - Business

• Remember to go to https://beta.companieshouse.gov.uk/ if

you do not know your company number.

Telling HMRC you wish to sign up to Making Tax Digital - Business

• The UTR number can be found on most correspondence

from HMRC.

Telling HMRC you wish to sign up to Making Tax Digital - Business

Telling HMRC you wish to sign up to Making Tax Digital - Business

YOUR email not your accountants

• Once again a successful
• submission. Wait the 72 hours

for notification and then you can submit under MTD.

• As with the agent signup, if you

are registering multiple companies to the same email then have some way of tracking

• them. The email you receive

from HMRC will be generic with no business name noted.

Telling HMRC you wish to sign up to Making Tax Digital - Business

• Ensure your software is working and signed up to

MTD.

• We will today cover activating the software for

MTD for Sage 50, QuickBooks Online, Xero and

• ur chosen bridging software, BTC, for

accountants and MTDfVAT for sole traders/individuals.

Now that you are signed up to MTD

• BTC and MTDfVAT cost £50 per year. This is a

bespoke bridging software and would apply to anyone wishing to continue using excel spreadsheets.

• The following systems are bespoke software

packages, not just dedicated to MTD: – New Sage 50 V25 will vary from between £30 to £125+ per month depending on functionality required. – QuickBooks Online is under £10 per month. – Xero is under £30 per month.

Prices of each software option

Sage 50 Desktop Version 25

Sage 50 Desktop Version 25

• You must have a subscription to Sage 50 V25;
• r be using an older version with the Sage

MTD module add-on (at additional cost);

• r be using an older version of Sage with

bridging software (via a csv file);

• There will be cost differences here!

Sage 50 Desktop Version 25

• You MUST take the following steps in order to submit the VAT

correctly.

• Just because the VAT return “submits” does not mean you are

doing it correctly.

• Think of two choices when submitting the VAT return, and if you

do not tick the correct boxes, the software will send the return down the wrong path. HMRC will inform you and you must correct the submission. HMRC will not fix it for you! This may give you a software headache!

Submit Return

MTD compliant HMRC account Old HMRC account can still receive returns but HMRC will not accept them

Sage 50 Desktop Version 25

Within Sage 50 go to “settings” and “Company preferences”.

Sage 50 Desktop Version 25

Within company preferences go to the “VAT” tab.

Sage 50 Desktop Version 25

Tick the box to enable MTD submissions and fill in the eSubmission credentials as shown. A warning message will appear as shown below.

Sage 50 Desktop Version 25

Check and submit the VAT return as normal, select to submit

• nline. So far,

everything is the same as any normal return (other than the MTD box!)

Sage 50 Desktop Version 25

Follow the steps onscreen to enter your company details and registration number.

Sage 50 Desktop Version 25

You will be prompted to grant authority for Sage to access your HMRC

• account. This authority will last 18

months or until you revoke authority. Once authority is granted you will not need to log in again for another 18 months, and can submit straight from the Sage software.

• Once authority is granted you can submit to

HMRC via the software.

Sage 50 Desktop Version 25

You will be notified of your submission reference

• nce the

return has been processed.

QuickBooks Online

• There are some initial steps required for

Agents to activate QuickBooks Online.

• These will be covered first.
• If you are not an accountant with an agent

services account then skip to page 45

QuickBooks Online

QuickBooks Online – Agent steps

If you are an agent with a QuickBooks Online client list, you must link your agent services account details. For any business

• wners, ignore this step. Go to your

main client list and select the company cog.

QuickBooks Online – Agent steps

Follow the highlighted steps to connect your Agent Services account.

QuickBooks Online – Agent steps

Your Agent Services account is now linked to your QuickBooks Online client list. Any business authorised on your agent services account will now submit by following the next steps outlined.

QuickBooks Online – Business steps

Log in as your main company user, and go to the company cog. Select “Account and Settings” from the pop up menu.

QuickBooks Online – Business steps

Go to “Advanced” and select “HMRC connection” to link your business HMRC account to the system.

QuickBooks Online – Business steps

Grant authority for QuickBooks to access your HMRC account for the next 18 months.

QuickBooks Online – Business steps

Once authority is granted you will be taken back to the main QuickBooks screen and from there you have one final step. This final step applies to both business users and Agents.

QuickBooks Online

From the QuickBooks Online main page select “Taxes” and within the VAT section go to “Edit VAT”.

QuickBooks Online

Enter the VAT Registration number and select the option to turn on MTD.

QuickBooks Online

Select that you have signed up to MTD. You will be asked to verify the VAT number again. Wait for the below box to disappear.

QuickBooks Online

Grant authority for QuickBooks Online to access your HMRC account and this will again last for 18 months before authority is required to be granted again.

QuickBooks Online

You will see from the above that the Making Tax Digital link is displayed on the top left, indicating a successful connection. Now once you are happy to go “Submit return”.

QuickBooks Online

Once you are happy with the figures then go to “Submit to HMRC” and the return will be submitted for you.

Xero

Xero

Log Into Xero and go to “Accounting” “VAT Return” and the below Making Tax Digital box will appear.

Xero

From this screen you can choose to sign up to MTD. We are going to assume you have already signed up, so go to “continue after signing up”.

Xero

You will be taken to an authority screen once again, and from there 18 months authority will be provided allowing you to submit returns through the software.

Bridging software - BTC and MTDfVAT

• Basics:

– BTC is the accountants version of the same bridging software company – MTDfVAT is the business dedicated element of the bridging software – Designed for use with excel books and records – The software does integrate with all the software's we have just discussed, Sage, Xero and QuickBooks. Unless you have complex manual calculations, is it worth doing? – Visit https://mtdfvat.co.uk/

Bridging software - BTC and MTDfVAT

• Sign up and you will be provided with a MTDfVAT

download document.

Bridging software - BTC and MTDfVAT

This will create the link within the Add-ins section of Excel. Select “sample workbook”.

Bridging software - BTC and MTDfVAT

A handy guide and spreadsheet template is provided by the software. This advice is mostly self explanatory, but worth reading before starting.

Bridging software - BTC and MTDfVAT

• The following is a start to finish video

demonstration.

• https://mtdfvat.co.uk/#what-is-vat-filer
• Most likely problems will be not linking the

correct data or formulas.

• Ensure you save each return as a separate

excel spreadsheet so you have the breakdowns of the returns.

Bridging software - BTC and MTDfVAT

This is the main VAT return summary tab. From here you link each cell to the specific formula required. This is again a template provided by MTDfVAT and can vary from user to user. Remember the “define VAT range” we looked at on the Add-ins page. This is used to select the import data range.

Bridging software - BTC and MTDfVAT

You are provided with a template for sales and purchases which already links to the main VAT return template. It is advised to use this template.

Bridging software - BTC and MTDfVAT

• Once you are happy with the data and have defined the range then

select “Export MTD VAT data”.

• The data will upload to the MTDfVAT website, log in to view your

account.

• Submit the return via their website.
• Ensure you save a copy of the excel file somewhere.

• MTD is an additional cost for most businesses.
• HMRC are planning to remove the bridging software
• ption and make everything software based. There is no set

timescale for this. How long before people are pushed?

• If your turnover is not above £85,000 PA, then you have

the option to not sign up, so continue submitting VAT returns exactly as before.

• If you think you will someday go above £85,000 PA but

have not yet, then you could sign up for MTD, try it, and remove yourself from MTD at a later date. As long as you remain below £85,000 you can choose. Once you go over £85,000 at any point, you are stuck.

Closing remarks

• MTD for VAT is just the first step towards

a fully digital uploading service. MTD for income tax was mandated for April 2020 but has been pushed to 2021. Could we be blessed with further delays?

• We are here to help, from signing up to

MTD, to software assistance, to taking over the bookkeeping function entirely so you have peace of mind.

Closing remarks

BARNES ROFFE LLP

MAKING TAX DIGITAL WHERE ARE WE NOW? 25 APRIL 2019