VAT (Making Tax Difficult)

I run a business which is registered for VAT in the UK.

Once upon a time this was simple - the tax office (HMRC) sent you an A4 piece of paper once every three months, you filled it in with 9 numbers (one of which was the sum of two others, one of which was the difference between two others, and three of which were for most people zero) and sent it back to them.

Then they decided it was the 21st century, so they'd better have a website, and aside from setting up an inconvenient login process, they simply shifted the 9 boxes on the piece of paper to 7 boxes on a web form (the two calculations were then done for you), and you filled this in once every three months. They were happy to email you to remind you it was time to do this, because you no longer got anything from them in the post.

Most recently, around 2017, they've decided that the website just isn't enough, and between 2019 and 2022 (depending on the turnover of your business), they've forced people to change to a new system where you have to do one of the following:

  • run HRMC-compatible accounting software which sends them your VAT figures direct from your accounts
  • get someone else to do the above for you
  • run "bridging software" between whatever you use for your accounts (eg: a spreadsheet for many small businesses) and HMRC, so that this software sends your VAT figures, based on your accounts
  • use an online service to achieve the above

The new system is called Making Tax Digital, and HMRC provides a facility for finding MTD software, however their service does not even allow you to specify the Operating System you need it to run under!

It's very difficult to find suitable software which runs under Linux, for example.

  • I didn't know that HMRC operated a forum service for people to grumble about the way they operate, but here's a pretty typical experience of trying to find MTD software for Linux using the above service
  • The software which the author of the above post settled on is Free, but it isn't Open Source:
  • I had initially failed dismally with trying to find some suitable software using the HMRC online service, so on the 8th March 2022 I telephoned HMRC's VAT helpline on 0300 200 3700 (the number given in letters sent to me about MTD) and was advised instead to call the Online Services Helpline on 0300 200 3600. I had a lengthy telephone conversation with them about what I needed, was given a case reference number, and told that they would email me when they had some information.
    • By the 12th of April I had heard nothing, so I called again, and they could find no record of the case reference number I had been given. I never heard anything as a result of the original conversation.
    • On the 14th April I spoke to a very helpful person who definitely understood what the problem was and promised to email me once he had an answer, but also, ultimately, provided no help whatsoever in terms of finding software which would work under Linux.
  • I knew that the specifications for MTD were available online, because HRMC referred me to them when I started asking about "what can I run on the computers we use?"
    • I think it's very encouraging that HMRC assists developers in creating applications to interact with their API
  • http://rest-examples.chilkat.io/hmrc_vat_mtd/default.cshtml looks like it could be an interesting set of resources, if only any of the links worked.
  • https://github.com/richpeck/vat-mtd is very nice, especially because of the amount of documentation provided in a discussion with someone else
  • https://github.com/talex5/hmrc-vat-mtd-hledger-bridge is far more interesting (Python)
  • https://metacpan.org/search?q=LedgerSMB-API also looks good (Perl)

For the time being (July 2022, which is the end of my first accounting quarter when I can no longer file online) I am using PcVatFreeBridge, but I would dearly like to see an Open Source solution for this.

  • It appears to be available for Linux only as a .deb download (so, suitable for Debian and derivatives, tested on Ubuntu 20.04), so I'm not sure whether all the CentOS people can use it
    • It installs itself into /opt/pcvatfreebridge - here is the output of dpkg -c showing that it installs nothing anywhere else on your system
    • It appears to install and start satisfactorily under Devuan 4 Chimaera (and therefore Debian 11 Bullseye)
    • I notice a large number of .jar files under /opt/pcvatfreebridge/lib/app strongly implying that it's been written in java :(
    • It requires a graphical desktop environment (not mentioned under Requirements in the documentation) - and of course installing with just dpkg doesn't invoke any dependencies :(

Incidentally, the user manual mentions that it can take figures from an Excel spreadsheet (why not Open Document format? Even HMRC publishes stuff using that) or from CSV, but gives almost zero guidance as to the format of the CSV file, so here are some clues:

  1. the software refers to rows in the CSV file by numbers, and columns (which can be comma- or tab-separated) by letters
  2. you can create a CSV file containing your data, labels, comments etc pretty much however you wish
  3. you then edit the reference to the "box" data fields in the software (once you have specified the filename), and it finds the data for you
  4. it also stores this information in the file .100PcVatFreeBridge/YourVATnumber/config.properties in your home directory

So, for example, I chose a format with data on separate lines, the first column being the HMRC box reference as a reminder, the second field being a short description (such as "VAT due on Sales") and the third field being the number from my accounts for that quarter.

The config.properties file ended up containing: 

model.rangename.box1=c1
model.rangename.box2=c2
model.rangename.box4=c3
model.rangename.box6=c4
model.rangename.box7=c5
model.rangename.box8=c6
model.rangename.box9=c7

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