No Software, No Internet- What’s the Solution?
Problems surfaced soon after MTD went line in April 2019, with some businesses or individuals having connection problems while submitting VAT returns. Others hadn’t found quite the right software to suit their business processes and as such had to ask for a temporary exemption of HMRC. If you are still having problems especially in a rural area, where internet access can be patchy at best, then you might still be able to apply for temporary exemption. This will give you a breathing space (if accepted) till October 2019 so you can find the right software or internet supplier.
If you haven’t yet found the right software, there is free bridging software available to link to a spreadsheet and other older packages, but these are temporary band-aids until April 2020. MTD for VAT rules allow those who have difficulty using digital tools because of age, disability, the place they live in or any other reason to apply for an exemption from the HMRC’s requirements. Although the exemptions are set out in full in HMRC’s technical guide they are hard to find … so here is VAT Notice 70022.
HMRC has assumed that if you are already a user of the Government gateway portal then this new system is just a slight change to your existing digital processes – updating software for instance. A previously received exemption allowing the paper filing of VAT returns will likely be continued. The health issues of business owners requiring extra time to implement MTD compliance have in many cases been granted a two-year exemption which not a long term solution.
Being Digital – A Computer is no Smartphone
A gross misunderstanding pervades industry and government, that as the world becomes more “digitalised” and since everybody can use a smartphone, it is easy to adapt. But the reality is that the process is not always easy and taxpayers who can use a smartphone, are in many cases Luddites when faced with the software on a computer, most needing the time and patience of an accountant or family member who “gets it”.
ExpressVAT – MTD for VAT “In the Palm of Your Hand”
The ExpressVAT app is a Cash Book system, designed from the outset for the stressed and rushed small business owner who hasn’t got time to waste switching on a PC and waiting 3 minutes for it to load after an exhausting long day.
ExpressVAT Saves and Stores your transactions and Snaps receipts directly on your phone. You Submit your VAT still on your phone. As far as we know ExpressVAT is the only MTD solution that you can Register, manage all your transactions and submit the VAT – all from your smartphone – no computer needed.
The user interface is so simple and streamlined you can probably do all your weekly transactions in the time it takes your PC to load and shutdown. ExpressVAT is for those who can use a phone and can’t or don’t want to use a computer.
Software for MTD: Cashbook or Accounting – which is the best?
HMRC is not providing software for Making Tax Digital (MTD) for VAT, leaving taxpayers to choose an MTD-compliant HMRC recognised software. HMRC offered a basic free-to-use tool for small businesses when RTI (Real Time Information) was first introduced for payroll, this will not happen for VAT.
Finding the right software is a minefield with over 400 packages vying for your money. Yes, they all work if they are “HMRC recognised”, but most systems are written not for the small Cash-Based business owner but for larger businesses invoice submitting businesses. These programs work with debits, credits, journals, suspense accounts and all manner of jargon. Most of these “double-entry” and ask all manner of questions about entries that are not needed to “just do my VAT”. A cashbook on the other hand when properly designed is a single entry system that dispenses with the jargon and the extra entries – Money in, Money out – simples!.
Reasons to Choose a Cashbook
A cash-based retail shop or fast food restaurant that needs no stock management is a definite fit for a cashbook. A business that requires stock management, can manage inventory (stock) in a separate program or spreadsheet, as MTD only specifies the storing of the monetary transactions. How a business manages its pies and pizzas is up to them. An electrician or plumber, hairdresser, restaurant, corner shop, builder, handyman, car mechanic are therefore better off with a cash book. Subcontractors and service providers with few invoices per month (20-ish) and very few debtors to chase, will also find time (and cash) savings by using a simple cashbook.
Reasons to Choose a Double-Entry Accounting Package
A business that invoices over £150,000 a year or more in smaller amounts will inherently have lots of invoices and debtors but they are on the periphery as a very simple spreadsheet can easily manage a debtors list. Debtor and Creditor management like stock control is not part of MTD regulations, and in fact, many businesses using the “big accounting” packages would find it easier (and cheaper) to use a cash book with a spreadsheet for managing their debtors and invoicing. A business that has hundreds of suppliers, a large customer number and a very large product catalogue, would again be better off with an accounts program, that allows a more granular analysis of margins, gross profit and other financials.
Coming soon, the ExpressVAT Invoicing Module
For businesses registering for ExpressVAT or XpressoBooks now when we have the Invoicing and Purchase order module ready, it will be a no-cost option. Our invoicing module will again be designed for the majority of smaller businesses so it will not ask you for questions that only larger companies need – and again you have control – “In The Palm of Your Hand”.