VAT and MTD

Introduction

VAT, along with Making Tax Digital (MTD) are an essential requirement of any financial system, yet some manage this better than others. Although MTD is a standard requirement, some systems still manage this outside of the finance software or require an additional bolt-on. Cloud accounting is fully MTD compliant, allowing you to know that your software will allow you to submit directly to HMRC.

Typical Problems

Even though MTD has been in place for several years now, some systems still do not allow you to submit to HMRC directly. This could eventually mean your accounting system is not compliant with HMRC guidelines.

Partial exemption and calculation for non-standard VAT schemes can be problematic, and difficult to calculate, meaning complex calculations outside of your accounting system.

Reconciling the VAT return can be problematic, as it can require exporting or the use of multiple different reports to calculate the information.

Lack of control over reconciled transactions can also be an issue, allowing users to amend transactions that may have already been reconciled.

Solutions

Cloud accounting has a direct link to MTD, meaning you will always be compliant with the latest standards for submission.

The flexibility to amend VAT codes, allows you to have custom configurations for non-standard VAT schemes, assisting you with calculations for these schemes. Combine this with the ability to create custom reports and the ability to schedule them, and this ensures you have the level of detail required for VAT reconciliation.

Benefits/ROI

Incorporate multi-VAT requirements within a single system, removing the requirement to export information and enter adjusting transactions.

You can also calculate automatically and submit the final value direct to HMRC, and using custom reports to assist with the reconciliation, this will reduce the time spent each quarter on preparing and submitting the reconciliation.

Improve the efficiency of the process to allow you to deal with the reconciliation quicker.