RSS feedsTax is becoming more complex: witness the ever-increasing girth of tomes such as Tolley’s Orange and Yellow handbooks. Since Gordon Brown became chancellor in 1997, both have at least doubled in size, and their growth rates show little sign of slowing anytime soon.
Nowhere is this nightmare of complexity more apparent than in the case of VAT. So when HM Revenue & Customs does something to alleviate the compliance burden on agents and their clients, it seems churlish not to exploit it – even if it is just another electronic filing facility.
Roll call of services
Internet-based services now include the VAT return reminder service, VAT online registration service, VAT online return service, bulk-filing for VAT returns and EC sales list (VAT100, VAT101 ECSL) using CSV or XML formats, and most recently, bulk upload via the XML channel for larger traders and agents such as accountants, which was introduced on 14 December 2006. So it is now theoretically possible for agents to automate almost all of their client’s statutory VAT reporting. But, at the moment, very few are, because most software suppliers have yet to make the necessary software available.
‘VAT101 EC sales list functionality has been available through Access Dimensions since November last year,’ says Pip Trowles, product manager for Access Accounting. This facility provides the declaration data in CSV format for manual bulk upload to the Government Gateway. ‘Later this year, the direct internet submission facility, along with the functionality to submit the VAT100 data, will be available to all our Access Dimensions users as part of their free software upgrade,’ he adds, so anyone who wants to use it will have to wait a while.
IRIS is also taking its time. ‘It takes time for any business, including accountants, to get around to exploiting available technology,’ says Rob Steele, product director at IRIS Enterprise Software. ‘Online VAT filing is still optional and it’s just a once-a-quarter thing for most businesses,’ he says, explaining why IRIS has no definite plans to add the facility to its applications. ‘It’s on our to-do list,’ he adds, so if accountants want to use Exchequer or IRIS Accountants Office to file clients’ VAT returns, they simply need to ask. ‘I don’t think it’s a top priority at the moment, because we’ve received no requests for it,’ he says.
Prior warning
Alan Wright, a director of Liberty Accounts, the only supplier so far to achieve HMRC recognition for its XML VAT declarations software, isn’t impressed. ‘Software suppliers knew in September that the Revenue was going to make this facility available in December,’ he says.
However, as a provider of online accounting software, Liberty has the edge over traditional suppliers when it comes to rapid response. ‘We can make changes to our system and get them out there really quickly because we don’t have to wait for the next big upgrade,’ he explains.
This is good news for some accounting firms that act as agents on behalf of dozens or hundreds of VAT-registered clients. ‘We process on average 70 client VAT returns per quarter, which is a time-absorbing element of our role,’ says David Hughes, managing director of Accountants 4 Contractors, a Liberty user. So, in December, when HMRC opened the Government Gateway to XML-based internet filing, the firm was the first to submit a return.
‘Now we run one system and do everything at the touch of a button,’ he says, ‘and because there is no need to import or export data, there are no errors.’
Online opportunities
The VAT online registration service can be used to complete electronic versions of form VAT1 for VAT registration, VAT2 for partnership and VAT68 for transfers of VAT registration numbers.
‘We register our clients for online VAT as part of the service we provide,’ says David Hughes, managing director of Accountants 4 Contractors. It’s a service that helps clients to complete registration in a timely manner.
Online checks help agents and clients to complete the forms correctly, with context-sensitive help. ‘It saves time and ensures that all of the mandatory fields are completed,’ he adds.The firm also uses HMRC’s online VAT reminder, which emails messages to remind registered users or their agents when returns are due.
Those registered for VAT online can also pay their VAT electronically by direct debit, BACS, CHAPS (Clearing House Automated Payment System)or bank giro credit transfer.
Lesley Meall is a freelance business and technology journalist
