INDUSTRYNEWS • 27
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• Either implement a complicated
accounting system or start using a
system designed for installers. One
of several possible suppliers is my
company, Powered Now.
Remember that manually adding up
your sales and costs to produce the nine-
box return does not comply with MTD for
VAT.
THE SPREADSHEET AND THE
COPY AND PASTE GET OUT
The temporary loosening of the rules
that I referred to previously is that for 12
months only, HMRC will allow the sales
and costs to be held in a spreadsheet. The
spreadsheet can calculate the VAT return
and the results can be copied and pasted
into some “Bridging software” that will
submit the VAT return through the HMRC
VAT Portal.
There are some good reasons for
allowing this. Businesses consisting of
multiple companies each with a VAT
registration or partial exemption from
VAT require difficult calculations not
supported by any mainstream systems.
Therefore, the final VAT return is done on
a spreadsheet.
However, that doesn’t apply to most
installers. The exemption has been seized
on by many accountants as a way to
effectively get out of MTD for VAT. And
over 50 software vendors have made their
software able to accept copy and pasted
VAT returns.
We think that using this method is
a mistake for most companies. In fact,
we have looked at making our solution
for MTD for VAT able to accept cut and
pasted data. The work is trivial, but we
have decided not to go down that route. I
explain why in the next section.
REASONS FOR NOT USING
SPREADSHEETS AND
COPY AND PASTE
The first and most obvious reason for
not using spreadsheets and copy and
paste is that the solution will only be
allowed for 12 months. So, if you use this
approach you will need to learn about it
and start using it. Then 12 months later
you will have to learn a new method. So
why not just make a single change?
The second reason is that it will be more
work. Entering lots of sales invoices into
a spreadsheet plus copying and pasting
totals is more work than using a system
where the invoices can be produced
automatically.
Plus, re-entering data and copying
and pasting makes errors more likely.
For instance, when copying and pasting,
simply failing to highlight the first digit
of a number you are copying can lead
to a major error in your VAT return with
attendant fines etc.
Then it should be considered that with
MTD for Profit and Loss following not that
long afterwards, it’s worth getting a system
that will be able to handle that as well
rather than have yet another change.
The final reason is that in not
implementing a full system you may well
miss out on the benefits that you can get
from that implementation.
IS THIS BAD FOR INSTALLERS?
From the start of April, every business
reporting VAT on a quarterly basis will
have to comply. Ignoring the deadline will
lead to heavy fines. However, it should
be noted that HMRC say they will make
allowances provided companies have
made a genuine attempt to implement
MTD.
Undoubtedly the initial impact of
MTD for VAT and the follow up MTD for
Profit and Loss will be more costs and
disruption.
Against this, installers should see
benefits in the medium term as it is
fundamentally easier and cheaper to
run a business on a computer than from
memory and bits of paper. There is an
initial learning curve to climb, but after
that the benefits should follow.
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THE GOOD NEWS
Trade companies implementing
systems can definitely get some large
benefits particularly if they have some
employees. The sort of benefits reported
by my own customers include:
• Much faster creation of quotes
and invoices including while at
customers’ premises. These can
be to a professional standard. All
calculations, covering totals, VAT
on invoices and more are done
automatically.
• Sending documents by text or email
all in one click is quicker and easier. It
also gets a better customer response
while being cheaper than stamps and
paper.
• The information is already on a
system, allowing CIS and VAT returns
to be done automatically. MTD for
profit and loss will be able to be done
in the future with no further input.
• If all costs are on the system too,
which is needed for the MTD for VAT
return, it will be possible to see the
profit on jobs with no further work
• With everything in one place, there’s
no more hunting around for bits of
paper everywhere.
• All previous quotes and invoices can
be easily viewed.
ABOUT THE AUTHOR
Benjamin Dyer is CEO and co-founder of
Powered Now. Powered Now’s mobile apps
aim to make it easier for installers, builders
and other trades to run their businesses.
www.powerednow.com