MTD VAT Bridge

mtdvatbridge.uk is our answer to HMRC's decision to enforce digital VAT record keeping on all businesses that have a turnover in excess of the VAT threshold.

mtdvatbridge.uk is a 'bridging' service. It allows users to keep their existing accounting systems in place and upload VAT returns to HMRC without having to make complex changes. If you use a spreadsheet, you can make some simple changes to it and upload the spreadsheet to mtdvatbridge.uk and mtdvatbridge.uk will pull the return data out of the spreadsheet and transfer the data to HMRC. It's all electronic.

Initially mtdvatbridge was designed to retrieve data from spreadsheets but as development progressed, it became obvious that the data doesn't have to come from a spreadsheet. You can upload your returns data in CSV format or in plain text files. These data formats can be trivially created by a spreadsheet or by a program and so the requirement for a spreadsheet is no longer needed. This is also useful if you use a spreadsheet format that mtdvatbridge.uk doesn't support. See How To Use for further details on how to modify your spreadsheet and upload other formats.

It means that small businesses who don't use any form of digital record keeping for VAT now have to computerise their accounts. HMRC make it plain on their website that VAT returns MUST be returned electronically and there is to be no manual transposition of the return data to HMRC. If you are below the threshhold you can avoid this process but as soon as you are over the threshhold, you must use digital transfers to make your returns.

We are a small business, two employees running from the spare room in our house - we do cross the threshhold. We produce a few dozen invoices a year and make a few dozen purchases, our main costs are wages. Working in the IT sector we already keep our records digitally in a spreadsheet and every quarter we manually fill the online form in and upload our returns electronically. It all works, it's nice and simple, doesn't occupy large amounts of our time and it serves all our needs.

We don't think we are alone in finding HMRC's imposition of digital record keeping something of a burden. We are in the fortunate position of being very tech savvy and can code our way round the problem but if you are running a business where you don't have the skills or resources to go digital then it must be a nightmare. As a business we can't really afford the time to update all our systems and keep money coming in from our main business. Large companies already have the resources to JFDI and get things moving but at our level of business, we would find it very hard to justify the thousands for an off the shelf accounting package and even harder to justify a monthly online subscription for a handful of sales and purchases.

Initially there were a lot of scare stories and myths around MTD, most of them have been debunked by HMRC. A close read of HMRC's documents shows that using a spreadsheet to keep your records is perfectly permissible. You must keep your VAT records electronically, you MUST NOT manually copy or transpose the data from your digital records to the return form, it must all be electronic. HMRC also exclude 'cutting and pasting' the data from one application to another. See end of section 4.2.1 in VAT Notice 700/22: Making Tax Digital for VAT :-

(bizarrely - it is an electronic transfer, you're not using any pieces of paper, it's put in a memory buffer on your computer and taken out of the memory buffer so is really all alectronic). They make the rules....