I have a Limited Company client who has two separate branches and I produce management accounts for each branch and then post the separate TB's to consolidate the figures for the final accounts.

This is not an issue with Solar as two separate businesses could be set up for book-keeping purposes. However, in the past the two VAT returns which would be produced (both of course having the same quarter periods) could be added together to produce the figures to file the VAT return.

How would Solar deal with Branch accounts under MTD and digital linking?

I could of course set up one client and duplicate all of the N/L accounts, one each for each branch, but still need to know the separate VAT liabilities for each branch. If a second VAT liability account was set up would the VAT return produced amalgamate the two N/L accounts for the submission of the VAT return or could it be set up to do so? That way one VAT return is produced for filing for the two branches but each branch, having its own VAT liability account, would be able to calculate its share of the total liability. (Branch A currently pays the total liability by DD and Branch B reimburses Branch A for its share of the liability)

Thanks for your feedback on the way you currently submit your VAT returns - that is useful. We expect that you will be able to adjust the VAT return figures produced in Solar Accounts Online before you submit them to HMRC. Therefore you can use the same approach that you currently use - each 'business' would produce Box 1 to 9 figures and you will manually add them together. Then one business would submit the VAT return and record the HMRC payment and record the re-imbursement payment from the other business.

Regards,

Thanks for your prompt reply.
However, my understanding is that this can only be done manually until April 2020 as I have read the following:
"During the soft landing period between 1 April 2019 and 31 March 2020, HMRC will not require a digital link to exist between each group member’s software and the spreadsheet. However, the links between the pieces of software must be digital from 1 April 2020 for the set of software to be considered functional compatible software for Making Tax Digital purposes. While HMRC expects that each group member will operate digital links within the software that it uses, it does not expect the software systems of each group member to be linked to other group members’ software systems for VAT purposes if there is no need for them to transfer 9 box VAT Return information between the members".

Hi Russell,

I think it depends what is meant by 'manually'. Our understanding is that using a 'copy and paste' approach will be forbidden by HMRC from April 2020, but making an adjustment by exporting to a CSV file from one branch and importing the CSV file into another branch would be permitted.

Regards,