VAT "Making Tax Digital"

[CM photo]

I've just had an email from HRMC explaining that all VAT returns need to be made through software that is compatible with their "Making Tax Digital" (MTD) system, which I do not have - I use a simple spreadsheet as my turnover doesn't justify buying software and installing it.

I wondered if there are others in the same position and, if so, how they intend to deal with it. 

At the moment, my inclination is to cancel my registration; it will cost me money because I won't be able to reclaim VAT on photo equipment, etc., but it will eliminate the hassle of changing over to a new system.

Any thoughts or suggestions would be welcome.

Thanks.

[spacecadet]

This

https://www.tax.service.gov.uk/making-tax-digital-software

says there are free versions, but it also implies that you can continue to use the Revenue website.

"Using software will allow you to submit VAT Returns directly to HMRC without needing to visit HMRC’s website. "

(my italics)

[CM photo]

I didn't see this, although I'm still confused.  I have been submitting my VAT return online for a couple of years or more but I manually fill in the figures generated by a simple spreadsheet (Mac numbers) which works well for me.  I would prefer not to switch to a different package, free or not, and jump through the various hoops required to submit these returns directly, via the software.  But perhaps I'm just being a Luddite. 

[CM photo]

To follow up in case there are others in the same situation: I have signed up with an outfit called Portico.  This appears to be (relatively) easy to use and, as spadecadet has pointed out, it's one of the free options.  Also, I can convert my Mac files to .csv files, which are what is required.  Only time will tell - I will not have to use it until my next VAT return date and so I cannot vouch for them.

[geogphotos]

I am using a system linked to my business bank account. In the end I think it will cost me £5 a month.

 

The accounting side of it is meaningless to me but the form for submitting VAT is simple to use. I just do my few sums the same way as previously and enter it into the same VAT form. The only difference is that it is not on the HMRC site. 

[CM photo]

geogphotos, could you provide the name, as a fall-back?  It sounds as though it might be worth considering if my other idea doesn't pan out. Thanks.

Edited February 9, 2022 by CM photo

[geogphotos]

1 hour ago, CM photo said:

geogphotos, could you provide the name, as a fall-back?  It sounds as though it might be worth considering if my other idea doesn't pan out. Thanks.

 

 

It is something offered through by Lloyds bank business account. I don't think that it available otherwise. 

 

Anyway, the is what it is called:

 

Accounting software – Business Finance Assistant

[CM photo]

Oh, OK. I don't use Lloyds but perhaps others do.

[Robert M Estall]

I've been VAT registered since it started back in the early 70s. It allowed far more deductions than the former Purchase Tax with relatively simple accounting. It had the substantial benefit of forcing us all to keep quarterly accounts which I'm sure led to missing far fewer legitimate figures. I must have had my card marked kindly as I had very few inspections over the years. Then they demanded that we submit on-line which I managed for about five years while they tweaked things to make it just a little more difficult year by year. Now they have told us they are changing substantially demanding we change our banking arrangements and move over to using specialist software. It has also become completely impossible to correspond with HMRC

 

ENOUGH! I am miles under any threshold and have reluctantly deregistered and can no longer claim equipment deductions. I consider that a fair trade-off.

Goodby VAT!

[geogphotos]

10 minutes ago, Robert M Estall said:

I've been VAT registered since it started back in the early 70s. It allowed far more deductions than the former Purchase Tax with relatively simple accounting. It had the substantial benefit of forcing us all to keep quarterly accounts which I'm sure led to missing far fewer legitimate figures. I must have had my card marked kindly as I had very few inspections over the years. Then they demanded that we submit on-line which I managed for about five years while they tweaked things to make it just a little more difficult year by year. Now they have told us they are changing substantially demanding we change our banking arrangements and move over to using specialist software. It has also become completely impossible to correspond with HMRC

 

ENOUGH! I am miles under any threshold and have reluctantly deregistered and can no longer claim equipment deductions. I consider that a fair trade-off.

Goodby VAT!

 

 

I am registered on the Flat rate scheme. It used to be significantly more generous. Now it means that I can hold back 3.5% of the VAT I receive (16.5/20).

 

Alamy add 20% to my payout and I hand over 16.5 % of that. There are no records to keep and I don't have to do anything except complete a quarterly VAT return which takes a few minutes. 

 

For any single purchase over £2000 made at one time the VAT can be reclaimed. 

 

 

With the Flat Rate Scheme:

• you pay a fixed rate of VAT to HMRC
• you keep the difference between what you charge your customers and pay to HMRC
• you cannot reclaim the VAT on your purchases - except for certain capital assets over £2,000

Edited February 9, 2022 by geogphotos

[Graham]

There is a live seminar on this subject, which I plan to attend. 
 

The link I have is:

 

https://register.gotowebinar.com/rt/8134947203268478476?source=Campaign-Feb-MTD-1

 

Graham