MTD VAT features - free vs Power User

[paige]

Hi,

I am a Power User so that I can use QF to automatically file my VAT return.

My wife is thinking of subscribing for her small self-employed business.

I wanted to check what QF offers in its free package for MTD VAT. I note that in the pricing matrix it says that the free account includes “MTD Compatible VAT Returns”, but what does this actually mean? Does this mean that it produces the VAT return from which she takes the figures for inputting on the HMRC website?

Thanks.

[QFSteve]

Hello @paige

A bit of background…

Prior to you using QuickFile how was your wife’s records stored?
Were they?

• Paper based.
• In a spreadsheet.
• In another accounting package.

The MTD scheme HMRC brought in means you will no longer be able to store paper based records and they must be stored digitally.
You can also not just enter the figures in the boxes 1-9 on the vat return as there has to be clear digital links to the information which makes up the figures (either in MTD compliant software or a spreadsheet).

HMRC have given 2 options

• Enter all your transactions into MTD compliant software and use it to do the submission.
• Enter all your paper based transactions in a spreadsheet and use compatible bridging software to do your submission.

QuickFile offers both methods

QuickFile is free up to your first 1000 nominal postings in a rolling 12 month period. Once this threshold is reached then a power user subscription is required (£60 + vat annually).

If you are coming from paper based records and have to digitise your records anyway.
Posting them directly into QuickFile would be the simplest and cheapest option as the software may most likely be free (if you do not have many transactions and are under the threshold).

Our Bridging Module requires a a power user subscription to use (£60+ vat annually).
You can try this out for free as you can tick the option and do your first submission free of charge.

If you prefer to use a spreadsheet and the Bridging Module here are the instructions - VAT Bridging

PLEASE NOTE you can not just have a spreadsheet containing values for boxes 1-9 as the whole point of the MTD system is that there is a clear digital link to your backing data/transactions.

So to answer your question…

The QuickFile free tier will allow you to enter your transactions , produce and submit your vat return (in QuickFile) all free of charge.

A power user subscription is optional unless you go above the threshold mentioned above or you are not wanting to enter your transactions in the software and only wish to use it for vat bridging.

[ian_roberts]

@paige

My wife is thinking of subscribing for her small self-employed business.

To expand on Steve’s summary - the “1000 nominal entries” free tier basically means just under 4 invoices/purchases per week on average across the year (that’s in total, i.e. 4 sales invoices, or 2 invoices and 2 purchases, etc.). Each sale or purchase invoice when you’re VAT registered generates at least three nominal postings, and when you receive/make payment that generates two more. If you take card or cash payments then that will generate 2 additional entries for each “bank transfer” (petty cash → bank when depositing cash or card merchant account → bank when you receive settlement payments from a card provider), and if you take drawings out of the business bank account that would be another 2.

It adds up faster than you think, but a small business may be able to stay within the free tier if, for example, you record your individual sales in a point of sale system and just make one invoice per week in QuickFile from that weeks POS numbers.