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MTD (Making Tax Digital) compliance in UK


#1

Hi, I run a small accounting practice in the UK and I’m looking to roll out Manager.io to a number of my clients. However, I really need to know if Manager will be compliant with the submitting of returns to HMRC via their online portal which comes into effect from April 2019 for VAT registered businesses.
I know this only applies to the UK but I don’t really want to roll this out to my client if I need to look for another accounting package in 12 months time. I’m a big fan of Manager so would like to keep on using the product. If Manager.io needs any help in finding more details on the HMRC requirements I will be more than willing to help.

Thanks


Community Supported Localisation
#2

In general, Manager is not tax filing software. There are some tax worksheets for Australia, UK, and Netherlands, available when relevant tax codes are used, but the software will not connect with any tax authority portal.


#3

https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital

Making Tax Digital will build on this by integrating digital record-keeping to provide a single, seamless process with quarterly updates generated and sent direct from the software the business/agent uses to keep their records.

I think the UK government needs to release a free accounting software for their citizens.

That said, other countries may also be moving towards similar goals.
But that’s just speculation.


#4

@posh_accy

I live in the Netherlands and the Dutch tax authorities have automated quite a lot of tax return processes like inland revenue, VAT etc. even in a way that for your annual tax-return all kind of taxable income and tax- deductible expenses like mortgage interest pension-premium etc. are already are already collected an prefilled in a tax-income return proposal. For a VAT tax return, there is a portal where you can fill in your monthly or quarterly details. If this process is fully automated, it also means that you can’t afford any mistake in your taxreturn/booking processes. The tax worksheets for the Netherlands is a proposal for your tax return and I’m happy to have the possibility to correct mistakes manually.


#5

Hi - some more details on Making Tax Digital in the UK.

All vat registered businesses will from April 2019 have to use “a software program or set of compatible software programs which can connect to HMRC systems via an Application Programming Interface (API)

Will Manager.io be able to have this API link?

As the UK’s tax authority will move all accounting records to this basis over the next 3/4 years is Manager looking implement this API link - if not I fear your software will become obsolete in the UK. As I said previously I like using Manager and its flexibility, stock control, and great price makes it an excellent product for my business.

If this is not going to be addressed please can you say so, as I’ll have to start to look at other packages - the thought of looking at Sage, QuickBooks etc terrifies me!!


#6

NZ is already doing this and at this point we still have the option to file “manually” online with the IRD. Something that is taking off here as well is that Payroll is to be integrated with the IRD as well from the 01 April 2018. The first movers in this area are MYOB and Xero. The Payroll reporting to the IRD will be on every pay cycle, so this means that if your staff are paid weekly the integrated reporting to the IRD will be weekly and if monthly the reporting will be monthly. Big brother watching pretty much in real time now.


#7

Yes, in the UK we have been automatically filing Payroll returns as or before payments are made to employees since April 2016 - it seems to work okay and the employees no that there tax is being dealt with properly by their employer.

Lets hope that Manager.io don’t miss the boat on this opportunity.


#8

I understand what is being mentioned above, but does the accounting software itself have to have direct connection or as noted above “a software program or set of compatible software programs which can connect” ?

Does it need to be transaction by transaction reporting ?


#9

@Brucanna hit’s the nail bang on the head for me there.
At the end of the day, what appears to be a part of an accounting package is not actually/necessarily part of it.
It leaves me thinking two things:-

  1. If you want to voluntarily co-operate with HMRC years earlier than necessary, then why not just “roll your own”
  2. Speaking as one who has personally made representations to HMG about this, and has been in regular correspondence with HMG/HMRC and various interest groups, bodies and representatives, as a result - for the average UK based business it is my opinion that @posh_accy is perhaps putting the cart before the horse with this one. Sure, nothing wrong in looking towards the future, bet hey…

#10

I speak under correction, but I believe that your accountant will be able to submit the VAT returns digitally on behalf of their clients. My accountant already does this for my payroll which apparently has to be done in real time - so I would presume the digital VAT Returns would work the same way.

Only firms that are VAT registered and have a turnover greater than £85 000 will be required to start using it from April 2019 - otherwise 2020.

Having done a bit of reading on the subject it would appear that the only information required is what is in the 9 VAT boxes and given that your accountant will be able to submit the VAT returns digitally on behalf of their clients, I presume that this means that you could in theory use another program to link up with HMRC to file the return by just copying the VAT Return figures in Manager to an app that is dedicated soley to linking up with HMRC.

The lack of information on this issue is appalling -i.e. does the accounting program itself have to support connecting directly to HMRC via some kind of API or can you simply copy the VAT Return figures in Manager to another program that then connects to HMRC directly is very unclear. I cannot find any information on this point.

My recommendation would be that Manager waits another six months and reviews the situation as the UK will officially be leaving the EU on 31st March 2019 AND virtually none of the accounting programs have implemented this digital connection and one assumes that the HMRC themselves may not have this in place, I think it would be premature to spend time implementing a feature that is likely to be delayed. The UK government have no idea of the problems that Brexit will cause, so I suspect that the making tax digital will be delayed for another few years.

I appreciate the OP’s concern, but I think that there is simply not enough information available for any accounting software to know exactly what is required. I would wait six months and see how Brexit and Making Tax Digital align.


#11

Reading between the lines, and this maybe an over simplification, but is the “Making Tax Digital” just another expression for “eliminating paper submitted returns”.

Having an obligated frontend digital portal to receive data is one thing but to require any accounting software to have a “push button” direct connection, or even more importantly, forcing taxpayers to have such accounting software is another matter altogether.


#12

Macedonian UJP has a obligated frontend digital portal to receive data.

To upload the data one can use the forms and fill in by hand, or upload an XML file according to their specification. I am hopeful that once the API of manager is available I can make the required XML, to avoid manual entry.


#13

Yes and No, in the UK, we already have to logon to the HMRC website and input the VAT return details there. There is no manual paper return if you mean people posting the VAT Return to HMRC. It’s already digital in that every company has to login to the website and put their VAT details in.

However Making Tax Digital is also about getting rid of Paper Bookkeeping yes in that we are required to have all our records digital i.e. on the computer. Manager already does this.

The concern is now about this requirement to have software that connects directly to the HMRC website to do the VAT return, Corporation Tax Return etc. While a lot of things are not clear, it is very clear that you have (or your agent has to have) some software that is able to connect to the HMRC and upload and pull the data from the VAT Return form and the Corporation Tax Figures etc. It does not need to have access to the individual transactions however. In addition, the software needs to support the HMRC nudge system as in receive data from the HMRC website.

Here are the requirements that Manager would need to fulfull.

Commercial software must be able to:

• Keep records in a digital form.- Manager supports this

• Preserve digital records in a digital form. - Manager supports this

• Create a VAT return from the digital records. - Manager supports this

• Provide HMRC with VAT data on a voluntary basis. - Manager does not support this

• Receive information from HMRC via the API (application programme interfaces) platform. This will allow HMRC to send ‘nudges’ to the business/agent. - Manager does not support this

What is not clear is whether you can use a separate program to upload and receive from the HMRC and keep Manager separate from the HMRC as I don’t want the HMRC to have too much access to my accounting program on the basis of hacking, malware etc!


#14

Has anymore been said about this? Likewise, I am also looking to roll this out across a business but MTD compliance is must have.

Cheers!


#15

Same in Italy. I think that this is achievable also with a custom theme. I started working on it but I had to stop because of the half year closing


#16

Let me know how you get on @Davide - it seems ‘staff’ have stopped replying which is a shame. Is anyone able to get their attention for an official update?


#17

Sooner or later I’ll finish it but it will be compliant with the Italian law…


#18

Of course, im just interested as you can imagine how do able this is and whether its the right piece of software.

Are there any more developments do you @Tut? You seem to be in the know :slight_smile:

Thanks!


#19

I know absolutely nothing about MTD.


#20

@Tut Is there anyone that might? The point im trying to get to is whether its possible for this functionality to be implemented in the software so I can buy it.