VAT Direct - Making Tax Digital for companies that use spreadsheets

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VAT Direct

Making Tax Digital - Free Accounts for taking part in HMRC's pilot scheme

Cirrostratus are pleased to say that we are now able to offer a limited number of free pilot scheme accounts for those VAT registered businesses who wish to take part in HMRC's live pilot scheme (and qualify to so do).

Making Tax Digital is the new way of submitting tax information to HMRC. From April 2019 the majority of VAT registered businesses will be required to start using Making Tax Digital compatible software to submit the VAT return. There are some exceptions. The main one is being below the registration threshold. For more information read the government's web page about this

Cirrostratus have developed software, using their Exedra Universal Communications platform, which allows people to submit VAT returns and obtain VAT information using their service.

Objectives of Exedra MTD API

Efficiency and Minimal Change:The Exedra system is a submission system. This means it takes information from a file or spreadsheet to submit the VAT return. There is no need to change all of a companies accounting systems, merely to get a spreadsheet with the correct values (which is then mapped to the VAT return and uploaded.)

Low Cost:Apart from reducing the cost of having to change system (which is not just a cost of software and hardware, but also the cost of disruption to a business of changing system - ask TSB if you need to know more about this) the Cirrostratus API (Application Programming Interface) will be low cost and for some businesses free. (price list)

Free Accounts for taking part in HMRC's pilot scheme

HMRC are running a live pilot scheme that you can join in order to start using MTD before the Mandatory Date (April 2019). It is worth signing up to this if you can because you avoid the rush and can then be certain everything is running smoothly before you are legally required to do this. With Cirrostratus it does not cost you anything.

Cirrostratus are offering a number of free pilot scheme accounts. These are accounts which can be used to take part in HMRC's live pilot scheme. Any business that has already applied for a pilot scheme account has now been given a free pilot scheme account (regardless of whether or not they have access to the HMRC pilot scheme yet). However, our plan is to focus now on businesses that qualify for joining the open pilot. To check if you can do this (which involves using the HMRC website) click here and follow the signing up link (just over half way down the page it says "Sign up"). If you are interested in a free pilot scheme account from Cirrostratus please email us at john@hemming.email quoting your VAT number, name of business registered and when your vat period ends. This is on a first come first served basis. Any business accepted for the pilot scheme will have a free service until at least June 2019. (ie for the VAT returns for the period to 30th June, submitted potentially as late as August 2019) Once we have hit our limit for free pilot accounts we will change this web page. The accounts can also be used for making test submissions to HMRC's test servers.

HMRC Second Pilot stage: HMRC have now moved to a second open stage of the pilot scheme. As the number of businesses entering the pilot accelerate, we will be aiming to manage the numbers of people who start using our interface to ensure that we can support them through the process. If the volume of new accounts becomes difficult to support, we may introduce a process of pre-registration via this website to enable this to done. Additionally, we may not be able to make any firm commitments as to the date at which a service will be offered. Currently there is no pre-registration process. We are able to offer a service to anyone who wishes it immediately. We are also able to prodvide additional phone support when first using the system. This will be replaced at some stage by a signing up process on our website.

Important points about the second pilot: If you wish to participate in the second open pilot there are some important points to note.

  • You can check if you are eligible by starting the process. HMRC have confirmed that merely clicking on "sign up" does not commit you to joining then pilot. You can stop the process after being told whether you are eligible or not.
  • If you pay by direct debit you need have an application agreed to join the pilot 15 working days (3 weeks - or more) before your filing date. It takes perhaps 2 days to get the application agreed. Hence (if you pay by direct debit) the application deadlines are: October Period end, filing 7/12 apply by 14/11, November Period end, filing 7/1/19 apply by 10/12, December period end, filing 7/2/19 apply by 15/1/19, January Period end, filing 7/3 apply by 12/2, February Period end, filing 5/4 apply by 13/3. If you are a monthly submitter with a direct debit you may have to ensure that you apply in the small window between the previous filing date and the early direct debit deadline. We are checking this out with HMRC at the moment. Eg for the October period apply after 7/11, but before 14/11. We have asked HMRC for the precise dates.
  • As a general point if you wish to join the pilot get your application in to HMRC and agreed as early as possible. You can then work out which vendor's software to use.
  • It is worth checking that some vendors have capacity before making the application, however. We have capacity at the moment. Hence if you get admitted to the pilot scheme and find you cannot use anyone else's service we can provide a service (remembering that our pilot scheme service is free). Hence if you want to take part in the pilot scheme make the application ASAP to HMRC.
  • HMRC will be switching off MTD for an upgrade restarting on 4th December. Some time after this point businesses currently excluded will be able to participate in the pilot. Although this has now happened we don't yet have a date for when additional businesses will be allowed through that have so far been unable to join the scheme.

When can firms use the Cirrostratus VAT Direct service to submit pilot scheme VAT returns?

Now.

How can I open an account?

Click Here.

How exactly do we create digital links

With our experience of submitting data to HMRC we are building up information on creating Digital Links so that spreadsheet users can create a legally compliant accounting system

What about companies that don't use spreadsheets

We have some clients that are writing the digital link CSV file from their accounting system. We don't mind whether it comes from a spreadsheet or an accounting system. Details are on creating Digital Links and non-spreadsheet users can create a legally compliant accounting system by creating the CSV file from their accounting system

Whats this thing about anti-fraud headers?

On October 18th 2018 HMRC announced that some anti-fraud headers would be mandatory from April 2019. They have not yet confirmed which of the headers are mandatory. Cirrostratus, however, already generate all of the anti-fraud headers and hence are a future proof option for your MTD requirements. Cirrostratus also do two factor authentication (a text message to your mobile phone or something like that). HMRC have now said that TFA is not as yet mandatory, but if you use Cirrostratus two factor authentication is already implemented. We have, however, made it optional to fit with HMRC.

Flat Rate Scheme (FRS) - we can do it

The Flat Rate scheme has caused particular concerns because some of the cloud accounting providers cannot do FRS submissions. We can do FRS submissions. The Flat Rate Scheme is live as part of the pilot scheme and we have already submitted live Flat Rate data.

Partial Exemption VAT - we can do it

As part of the general principle that we can do pretty well anything that anyone else can do we can do partial exemption VAT submissions. We are not as yet aware of anything that needs to be done in terms of MTD VAT submissions that we don't do. The easiest way to confirm this is to try a submission. Don't be put off by the fact that we don't charge that much. Our software has a number of different options and can run on lots of different computers.

SAF-T transaction reporting (Standard Audit File for Tax)

Standard Audit File for Tax is an OECD standard on tax reporting. We can produce SAF-T reports, but this website is primarily about UK tax reporting requirements. If you are interested in SAF-T reporting please email us at john@hemming.email.

Making Tax Digital implementation forum

We have launched a forum in which people can ask questions and get responses about the implementation of Making Tax Digital (particularly for spreadsheet users). That forum is to be found Here.This is an explanation of how the basic submission process works in a video. You will see that the submission process itself takes about 20 seconds. That includes sending an authorisation code to a mobile phone and typing it into our system. Although this video has a schedule for Input and Output VAT our assumption is that you will get that information from your current accounting system (from a spreadsheet or a file) rather than keeping a separate VAT accounting system.

The following video talks about how to create digital links with Excel or Open Office and producing a CSV file from the spreadsheet. It does not specifically discuss the Exedra system.

Click here to go to the Cirrostratus youtube channel for other training videos

How to do MTD (Making Tax Digital) without upgrading your computer system