The small business with £19,000 of errors on its first MTD return
It’s the story that accountants everywhere have been waiting to read, ever since tech companies began marketing Making Tax Digital (MTD) software. A client, delighted at the ease with which he was able to submit his first VAT return under MTD, made £19,000 of errors. Ouch.
Net VAT overpayment of £9,000
The original article (MTD horror story: Small business makes £19,000 of VAT errors published on AccountingWEB) explains how the client had duplicated data for both output and input tax, caused by choosing to submit under the cash accounting scheme, rather than the invoice basis on which his calculations were based. Basic errors which should have been picked up.
The £19k of errors in the return resulted in a net overpayment of £9,000. It’s a big number for any business. Luckily, by being less than £10,000, it can be corrected on the next return, so all is not completely lost. Less easy to fix, though, is the risk of a juicy penalty from HMRC for having made a ‘careless error’, a threat which could still resurface when the next return is submitted.
The MTD process can be easy, but tax is not
It’s a nightmare scenario, especially as the client has tried to do everything right. Whilst some might be tempted to blame the software as the source of the error, in reality it’s a system for managing figures which require checking the same as any other.
It underlines the need to make sure accounting isn’t being sold as something that anyone can do themselves with a few clicks.
Error free bookkeeping
Situations like this are why we at Pandle take our bookkeeping software development so seriously. We’re on a mission to try and prevent every error possible, with a system built on thorough, logical processes.
Research, development, and refinement are all key, because if users think they are doing things right when they’re not, it can come with a pretty big price tag.
Pandle (and Pandle Mobile, our phone app) is refreshingly simple to use software which is built to reduce the risk of bookkeeping errors (and the time spent fixing them).
Get the bookkeeping right, and the rest will surely follow.
Feedback is an essential part of our product development, and we love to hear from you! Speak to one of our friendly team today, or email firstname.lastname@example.org