Published by: Mark Macklin - Business Services & Outsourcing Manager
End of Round 1
So it’s now the 10 June and the first round of MTD submissions will have been sent digitally by those entities on a monthly return basis, and some will wonder what all the stress and panic was about.
For entities already using compliant software this transition will have been a reasonably simple process, with the only issue being waiting for confirmation from HMRC that they were ok to submit, which took up to 72 hours to arrive.
The rest that required a bridging option, the process needed a tad more thought towards the layout of the upload, but once formatted with bridging it was very simple - leading to sighs of relief when the acknowledgement that HMRC had accepted the return pops up. This leads to the inevitable question, “What Next?”
Ding Ding Round 2
For businesses and advisors the bell has sounded on managing quarterly returns now, so we lift ourselves off the stool and prepare to go again.
The population on the June quarterly cycle is likely to be bigger than the monthly ones, so the task has grown but, having had the experiences of the monthly returns, the issues that occurred will have been addressed and learnt from.
The first thing to consider is what will the entity need to file. For entities not using compliant software already, then bridging is a good short-term fix for issues such as:
- Currently using Excel for accounting
- Systems not compliant
- Entity reports in a foreign currency, and therefore needs to convert to report for VAT
- Special VAT schemes are being used, eg second hand margin, partial exemption etc., or for Group VAT registrations.
What we have learnt from Round 1 is that both the Xero and QBO solutions work, once the connecting data is formatted correctly and Boxes 1 to 9 are easily identified, as shown below.
And we aren’t finished yet
With Round 3 coming in October, the saying “fail to prepare, prepare to fail” is very true spot-on when it comes to MTD, so all VAT registered entities must consider their options for how they are going to submit and leave enough time to deal with any last minute issues when trying to submit by 7 August 2019 or 7 January 2020.
The bridging tools available do offer a solution in the short-term, giving comfort that businesses can look at systems and make informed decisions on changes that may be necessary further down the line.
Not ready yet?
BDO can offer a full VAT health check and systems review to help get you ready for MTD.
Get help with MTD for VAT