HomeHMRCMTD: the good, bad and ugly

MTD: the good, bad and ugly

Ian Vickers reflects on how the implementation of MTD in 2019 affected both his business and the wider accounting industry.

My team, as I have previously written, talks to hundreds of accountants as part of our software development and marketing exercise. In the light of that, let us review the introduction of MTD for VAT.

In 2019, Prelude users started to submit their MTD VAT returns. From the software development prospective, HMRC provided excellent documentation to the developers, it is clear that a lot of thought was put into the security and reliability of the service. That was good. Not enough human resources were assigned to deal with developer support, often taking weeks to respond to the simplest of queries. That was bad.

With the development of the MTD VAT component of Prelude complete and in use it is reassuring to see many thousands of successful requests from Prelude Software to HMRC, and valid responses of obligations and successful VAT returns. With the initial frustrations of working with HMRC out of the way, our MTD VAT component is stable and working, and working well. The HMRC portal was down a lot of the time, causing tremendous frustration amongst users and accountants in general and a big increase in support tickets for us.

I am concerned about the experience of MTD generally from the accountant’s perspective, as it gets reported to us – and the concern is that HMRC will have to adapt to the urgent need for quality customer service. This concern will, no doubt, force a wry smile on many a reader’s face. It is in view of many a utopia – The Flood is more likely, and is, in fact, happening.

Accountants and businesses that hitherto used the free HMRC Gateway for VAT returns were generally resentful of this being removed and thereby forcing them to use (and pay for) commercial software, with the result that they complied with MTD VAT changes at the last minute, begrudgingly, half-heartedly, incompletely, incorrectly.

Accountants and businesses that thus far used commercial software and thereby assumed, or didn’t think at all, that nothing would change. In fact the whole mechanism is different, not least of which necessitating accountants to register a new Government Gateway ID for MTD, the Agent Services Account (ASA) and businesses to specifically register for MTD VAT before they could submit MTD VAT returns.

Many were unaware of this and tried to use their existing IDs, making it difficult to meet their filing deadlines as they had to wait for HMRC to process their last-minute ASA applications and MTD VAT registrations.

Accountants and businesses from whatever position, and whatever their opinion, who accepted MTD, read the literature and got on with it in good time, generally managed quite smoothly. Unfortunately, I suspect that these were in the minority.

I have said this before – while the full implications of MTD are not yet known, our experience of HMRC so far has confirmed my suspicions. MTD is about digital record keeping, not VAT returns; and I expect that, very shortly, the profession will have to prepare itself for further expense and a further learning curve.

In the coming year we intend to enhance Prelude with supplier invoices/receipts automation via OCR, bank feeds and a mobile app, and will be announcing the launch of these to ICPA members as soon as they become available.

In the meantime, we are always very grateful for the feedback about your experiences with Prelude and HMRC and any other accounting software you use.

• Ian Vickers is Managing Director of Prelude Software Limited. Email info@preludeaccounts.com or call 01656 725800.

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