At first glance, this might seem like a big change, but our cloud software accountants are on hand to make your transition to
cloud accounting as smooth as possible.
If you sign up too early then you could join the Making Tax Digital pilot, which will require you to fully comply with all Making Tax Digital recordkeeping requirements with immediate effect or your returns submitted in the old (non-MTD) format may not be processed.
To avoid running into either of these issues it is recommended that you do not sign up until the last non-MTD return has been submitted.
Next year will see a significant change to the way VAT returns are submitted to HM Revenue & Customs (HMRC) by businesses with annual revenues of £85,000 or more.
From April 2019, businesses will need to submit VAT returns on a quarterly basis using HMRC approved filing software. This is the first stage in the implementation of MTD, which is intended to take the filing of most taxes online in the coming years.
The rules and requirements of submission
Under MTD for VAT, businesses will need to:
• Digitally store and maintain VAT records
• Keep these records for at least six years
• Submit summary totals of their digital records to HMRC at least once every three months.
This will be achieved using MTD-friendly software – i.e. appropriate software that has been approved by HMRC.
In short, this means using software which has been pre-approved by HMRC and can connect to the tax authority’s systems using an Application Programming Interface (API).
HMRC has said that businesses can use either a single application or multiple programs for MTD, but any businesses using more than one program need to ensure the applications are ‘digitally linked’.
The software businesses use must be able to:
• Store records digitally
• Provide HMRC with VAT data automatically
• Enable the user to create and submit VAT returns
• Automatically update with information held by HMRC about the business.
Outside of MTD for VAT, HMRC intends to roll out MTD for other taxes and types of businesses however, this is expected to be from April 2020 at the earliest.
At this point, HMRC expects that “most businesses will be keeping track of their tax affairs and updating HMRC quarterly,” it has said.
If you need help with preparing for MTD, look no further…
Cloud accounting packages can ‘future-proof’ your business in readiness for the changing face of Making Tax Digital. Cloud accountancy packages also enable you to share financial information in real time with our team and quickly produce bills and invoices.
At Kirk Newsholme, we are FreeAgent Friendly, an accredited Sage Business Partner and a Certified Xero Advisor.
Find out more about our cloud accounting services here or contact us today for help and advice with regards to Making Tax Digital.
At Kirk Newsholme, we can help you bridge the gap by offering a temporary solution until you are ready to go digital. Using our in-house HMRC compatible software we can submit your VAT Return to HMRC on your behalf.
If you would like further information about our submission service please contact Clare Thomas on 0113 2044216 or email at clare.thomas@kirknewsholme.co.uk.
The rollout of MTD for VAT will now continue with the first reporting dates beginning in July 2019 and then continuing quarterly depending on each business’s required reporting dates.
Those with more complex VAT affairs have an extension until October 2019, by which point all VAT-registered businesses will need to comply. This may include public sector bodies and some charities.
Businesses are currently benefitting from a ‘soft landing period’, which will last up to a year, to get MTD for VAT in place and be reporting their affairs accurately to HMRC without facing a penalty.
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