It's been a couple of months since our last update and we've been busy working with our clients and HMRC on the pilot for MTD4VAT.
Alongside continuing to file live returns through the pilot, we have been rigorously testing the new MTD related functionality in VAT Controller to make the most of the new information HMRCs APIs will provide, most significantly tracking payments made to HMRC. Nigel Rainer, our Technical Director, attended an HMRC software developers' away day in Shipley meeting up with 40+ MTD obsessed software developers to hear HMRC's updates on MTD. On his return Nigel summed up the day - "The lack of detail from HMRC and the numerous questions raised confirmed my belief that HMRC are experiencing significant issues and therefore delays with their side of the MTD project."
The key news is that HMRC have published the list of recognised VAT software suppliers. We understand that to be included on this list suppliers must have filed a live return and given HMRC a live demonstration of their solution.
HMRC have also confirmed that the public pilot, postponed from July, has now gone live. However, what raised eyebrows here was the following in the latest email from HMRC:
"As part of our planning for the pilot, we have continued to engage with stakeholders and listen to their concerns about business readiness for MTD. As a result we have made the decision to defer mandation for 6 months for a small minority of customers with more complex requirements, to ensure there is sufficient time for testing the service with them in the pilot before they are mandated to join."
"The deferral will apply to around 3.5% of mandated customers, who fall into one of the following categories: trusts, 'not for profit' organisations that are not set up as a company, VAT divisions, VAT groups, those public sector entities required to provide additional information on their VAT return (such as Government departments and NHS Trusts), local authorities, public corporations, traders based overseas, those required to make payments on account and annual accounting scheme users."
Apparently HMRC will be writing directly to all taxpayers within these groups by the end of 2018.
This means that the timetable for acceptance to the MTD pilot is currently:
We are still unsure on HMRC's plans for businesses with non-standard periods such as industrial quarter ends. Also, it is not yet clear whether the "light touch" period for digital links will be extended for those registrations that have been deferred.
This raises the very real prospect for larger, more complex organisations that some smaller registrations may fall within MTD mandation from 1 April 2019 whereas the larger parts will not until 1 October 2019. It is therefore more important than ever for users to implement a solution that is capable of supporting both MTD and the existing filing gateway on the same platform. Of course, VAT Controller is more than up to this challenge, providing both flexibility and considerable added value around the available analysis and process automation.
We will keep you up to date as things progress, so look out for our next MTD update.
Our web based VAT Controller software with associated VATPack analysis workbooks have been used by FTSE corporates since 2010 to manage their VAT processes and we will continue to work with HMRC and our clients to manage a smooth and efficient transition to the new MTD regime, along with providing practical and genuine automation.
If you would like to know more about how VAT Controller can support your move to MTD, please contact Bryony Clinton on 0118 935 7140 or email bryony.clinton@taxautomation.co.uk.