Making Tax Digital

Making Tax Digital

SERVICE OVERVIEW

The first stage of HMRC’s Making Tax Digital (MTD) ‘roll out’ applies to VAT and imposes new requirements on lots of VAT registered businesses and organisations from April 2019.

From April 2019

VAT registered businesses and organisations with taxable turnover above the VAT threshold of £85,000 will be required to:

  • Maintain their accounting records digitally in a Software Product or Spreadsheet. Maintaining paper records will cease to meet the legal requirements in tax legislation.
  • Submit their VAT returns to HMRC using a functional compatible Software Product that can access HMRC’s API (Application Program Interfaces) platform.

The requirements do not apply to VAT registered businesses with taxable turnover below the VAT threshold (for example – those that have registered voluntarily).

HMRC has announced a deferral to the start date of 6 months for some more complex businesses.

What does this mean in a Nutshell?

This means that all applicable VAT registered Businesses will need to either find a suitable API to run in conjunction with Microsoft Excel or use one of the following approved pieces of Software –

  • Sage
  • QuickBooks
  • Xero

Or use their Agent to process the Books on their behalf.

Rebecca Ray at Tide Accounting can help and advise on all of the above – call 01425 674776 or email rebecca.ray@tideaccounting.co.uk

FAQ’s

  • Are VAT rules in general changing?
  1. No only those which relate to record keeping and filing.

Q) Does the information submitted to HMRC change due to MTD?

  1. No – The amount of information submitted to HMRC remains the same. The VAT return will contain the same nine boxes that it does currently.

Q) Are the filing and payment deadlines changing?

A) No – they remain the same.

Q) When does MTD go live?

A) The relevant dates for businesses with an April 2019 start date that file quarterly are:

FIRST MTD FOR VAT RETURN PERIOD DIGITAL RECORDS MUST BE KEPT FROM: DEADLINE FOR FILING FIRST MTD VAT RETURN
1 April 2019 – 30 June 201901 April 201907 August 2019
1 May 2019 – 31 July 201901 May 201907 September 2019
1 June 2019 – 31 August 201901 June 201907 October 2019