Nearly all VAT registered UK established businesses, with a taxable turnover above the VAT registration threshold (£85,000), now need to comply with Making Tax Digital (MTD) for VAT. HMRC has stated that one aim of MTD is to reduce the VAT lost through errors and mistakes arising from manual input.
The requirements introduced for VAT registered organisations include:
- Keeping VAT records digitally
- Creating digital links between digital records
- Providing VAT return information to HMRC via an API (Application Programming Interface) through MTD software
HMRC has issued their guidance on this in the VAT Notice 700/22.
When to submit your first digital return
If you submit monthly returns, you must be ready to file the April 2019 return digitally. If you submit quarterly returns, you must be ready to file the first period beginning or after 1 April 2019 digitally. Click here to see the full HMRC timelines.
However, HMRC have highlighted the few types of business that have been given deferment until October 2019. These include VAT divisions, VAT groups, public corporations and traders based overseas. If your organisation has been given deferment, you will have received a letter from HMRC, but if you aren't sure we advise you to get in touch with HMRC.
Buzzacott's bridging solution
Firstly, we recommend that you check if your existing accounting software is compatible with MTD; most of the major accounting software providers, Xero, QuickBooks and Sage, are compatible and will provide the Application Programming Interface link. However, if your software isn’t compatible, don’t worry! We have designed a bridging solution that allows submission of your VAT returns directly to HMRC in a way that is compliant and hassle free.
We are on hand to assist you in your preparations for implementation by doing the following:
- An initial impact assessment to determine next steps
- Reviewing and transforming your VAT return process
- Preparing or submitting your VAT return
- Supporting your decision on minimal compliance with MTD