MTD and Excel

MTD and Excel

Are MTD and Excel spreadsheets compatible? Can I continue to use my current software? And what is bridging software?

MTD and Excel

Excel and other spreadsheet software are acceptable to HMRC. They are compliant with the MTD rules.

TIP: The requirement with regards to sales is to show the VAT rate and not the actual Output VAT. We would therefore recommend that the Output VAT amount is a calculation of the Net amount multiplied by the VAT rate%. This ensures that you state both Net and Rate as required.

Please read our blog keeping records digitally for more information.

MTD and other software

Software which does not have the ability to submit directly to HMRC is also acceptable. So long as it can meet the requirements stated in our blog keeping records digitally.

The problem with MTD and Excel and other software

Keeping records digitally is possible with MTD and excel and other software. However there is a second requirement for MTD and that is to submit the data to HMRC.

The submission must be completed using digital links only.

A potential solution to this is known as bridging software.

Digital links

A digital link in its basic form is the ability to transfer data from A to B. Typically from one software to another.

Once data has been collected digitally at the transaction level HMRC expect it to be only moved via a digital link.

For example a digital link can be:

  • Emailing a spreadsheet containing your digital records to your accountant. The accountant must then import the data into their software digitally.
  • Transferring data by a portable device such as a pen drive or memory stick. This can then be given to the accountant.
  • Various formats for download and upload such as XML or CSV formats
  • Transfer via an API or other APP
  • Linking cells between different spreadsheets

NOTES:

HMRC have stated that the use of ‘copy and paste’ to move information within a program or to a different program is not acceptable for MTD. This is not a digital link.

Manually retyping information from one software to another area is also not a digital link. For this reason the old HMRC portal will be deactivated for those registered with MTD. This required users to manually key in the 9 VAT box figures which is no longer acceptable.

Bridging software

There are lots of different types of bridging software available. They all complete the same task in a variety of different ways.

The task that they complete is to take the data prepared for the 9 VAT boxes and then submit it to HMRC.

Bridging software example with Excel

For example a business uses Excel. The 9 box figures are all linked up to other areas of the spreadsheet so they comply with the keeping records digital rules. Typically you would then tell the bridging software which cells your data is contained in. For example the total output vat for box 1 may be contained in cell B5. The bridging software then sends the information to HMRC.

In the example above the individual digital transactions are entered on excel. From this point the data is only ever totalled or displayed elsewhere using formulas or linked cells. The data is never manual retyped.

Bridging software example with old software

Bookkeeping software which can therefore produce a csv file can use bridging software. These businesses would remain MTD compliant. For example a business using an old piece of software such as old versions of Sage or Quickbooks desktop.

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