Making Tax Digital (MTD) for VAT has been a long time coming. It is now here, as of 1 April 2019, and will be impacting any businesses with a VAT period that starts on or after 1 April 2019 with turnover above the VAT Threshold of £85,000.
For most businesses, this will be their first VAT quarter ending 30 June 2019 or later. However, if you complete Monthly VAT returns the deadline is imminent for your first VAT period ending within the MTD regime. The big question for every business is: “ARE YOU READY?”
We have been writing about this topic for a number of months and now is the time that any actions that you have been taking need to be in place.
Let’s just cover off the key points so you can ensure that you are ready for the changes.
What do you need to have in place?
1. Do you actually have to join the Making Tax Digital for VAT scheme or do you fit into one of the exempt categories?
You can check this on the HMRC Website here.
2. What software are you using?
You need to be maintaining digital records under the new regulations. This means anything from a spreadsheet through to Software such as QuickBooks Online, Xero or Sage to name a few. There is specific information that it requires you to keep which can be found here.
If you are using Software then you will be able to file your VAT return through the software.
If you are planning to continue using a spreadsheet you will need to use a bridging software or service to file your VAT return moving forward. Ensure you do not continue to use the existing HMRC log in that you have always used before as you will not be compliant with the new regime.
At Shapcotts we can assist Bridge your VAT and please contact us to find out more about this service.
3. Register for Making Tax Digital for VAT with HMRC.
This is a relatively straight forward process however there are some mistakes that can be made if you complete this at the wrong time. Also, you need to give yourself enough time to work through the process.
If you are a business that pays their VAT by direct debit that you cannot sign up in the 15 working days leading up to, or the 5 working days after sending a VAT return.
It should also be noted that you will be required to make some confirmation about your software and that it is ready to submit the return directly to HMRC using Making Tax Digital for VAT Returns.
There is also a 72 hour window where they will confirm by email that you can submit your VAT using compatible software.
4. Connect your Software to the Making Tax Digital for VAT Portal
The final steps to enable you to submit your VAT return with HMRC using the new regime is to authorise your software.
For each different type of software it will be slightly different, however, check out the videos and helpsheets from the software supplier to give assistance in getting up and running.
Making Tax Digital for VAT does not have to be a big upheaval to your business. The key thing is to take action and take the steps to ensure that you are compliant and find the right solution for your business.
May 31st, 2019