I received an email yesterday from an accountant who admitted he had no clue how to do group VAT returns in a making tax digital way with Sage50cloud or Xero. It reminded me that I haven't done a blog post about this yet so here goes ...
You need to produce and reconcile your VAT return in each company ready then you move to the add on software and it allows you to import and consolidate the data. It was quite an easy process to follow. The module is free for subscribers to Sage50 and can be downloaded from Sage, but you must have version 23.2 or above.
The returns then show as pending rather than submitted in the individual companies and I then do an intercompany journal entry to allow for the fact that only one business in the group will be paying the whole bill. If you need help and support with setting up your own system and journals then one of my handholding sessions would be ideal for you.
When I asked Xero about group VAT returns, they said they had no way to do a making tax digital compliant return direct from Xero and so I had to produce my own workaround, which is ok at the moment but might not work when HMRC change the rules. To be honest they have more on their plate to worry about than making tax digital.
Again I calculate the VAT in each company and then publish in Xero, but choose not to submit to HMRC at this point. I save a copy of each VAT return in a spreadsheet and then manually consolidate the figures onto one master group VAT return sheet.
I have chosen to use Taxcalc to submit spreadsheet VAT returns to HMRC, but you can use any bridging software (including a separate Xero subscription) which allows an excel spreadsheet to be imported. Again I also do a manual journal between companies to allow for the fact one company pays the entire VAT bill.
This is not ideal, but works currently.
If anything I've written here resonates with you, call me on 01604 420057 and let's see how we can help you.