Making Tax Digital (MTD) – VAT
From April 2019, if you are VAT registered with a turnover in excess of the VAT registration threshold (currently £85,000) and you keep your accounts records ‘electronically’ (on an accounts package or on a spreadsheet) then the submission of VAT returns will have to be done via the software you use. You will no longer be permitted to manually type in the numbers into the HMRC VAT submission page. If your turnover is below the registration threshold then submission manually is permitted until at least 2020.
What does this mean for me and my business?
It means that you will need to make sure that your accounting software is MTD compliant. This simply may require you to update your software to the latest version, or, if you are using spreadsheets then you will need to use some ‘bridging software’ that will span the gap between your records and the HMRC requirements. Bridging software is starting to become available now and there will no doubt be more on the market before the deadline.
What should I do at the moment?
Firstly, don’t panic as there is nothing required of you before April 2019, but you would be wise to start thinking about how you will become compliant.
Secondly therefore, talk to your accountant!
If your current software isn’t compliant and you’re looking at a cost to upgrade which is quite likely, you may wish to consider changing to a different software supplier. This may seem drastic but if you’re not happy with your current system then MTD could be a catalyst for change. It’s generally advisable to change software at a year end if you’re going to which make planning all the more important if your year end is between now and April.
We are always happy to help you find the best solution – so get it touch.