Making Tax Digital – is your professional practice ready for the April VAT deadline?
The first phase of the new Making Tax Digital (MTD) legislation comes into effect from 1 April 2019. This will mean that all VAT registered firms with taxable turnover in excess of the £85,000 VAT threshold will be required to file VAT returns online through dedicated accountancy software.
To comply with the new legislation, firms will be required to both keep digital records and file VAT returns digitally using MTD compatible software; submission through the current HMRC portal does not count as being filed digitally and this facility will be turned off for firms that are required to file their returns in the new way. Instead, there needs to be a digital link straight from the accounting software to HMRC to file the VAT return.
My professional practice already uses accounting software
If your business is currently using software for digital record keeping, we advise you either contact your software provider directly or view HMRC’s list which is updated regularly to check whether your software will be MTD compliant. HMRC’s list of MTD compatible software can be found here: https://www.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-vat.
What if the accounting software will not be compliant by 1 April?
If your firm’s software isn’t going to be compliant, another solution can be to use a bridging software which will enable your firm to put their records in a format accepted to comply with HMRC’s new MTD legislation. However, this is only a short-term solution if spreadsheets are your preferred method of record keeping and we advise that firms adopt an MTD compliant software.
We have a specialist team who can advise you on how to comply with Making Tax Digital, for further information please contact us here or on +44 (0)330 124 1399. We also have a number of supporting resources regarding MTD which you can access here.
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