With less than a month to go until MTD for VAT, HMRC have confirmed that the digitisation of the tax system will be occurring from 1 April 2019. The changes are likely to affect more than 1.2 million VAT registered businesses across the UK.
Key messages from Corrigan
- Don’t panic – there is a soft-landing period for the first year of mandation meaning digital links do not need to be established between software programs. Therefore, during this time, HMRC will accept the use of ‘copy and paste’ as being a digital link for these VAT periods.
- We can help – Our staff members have undergone training to ensure they are prepared to assist you with your MTD questions. We can assist with your transition, selecting the right software for your business and even submitting the VAT return. We have a bridging system in place which will allow us to submit VAT returns in Excel on your behalf. For more information, please contact us today.
- You don’t have to change software – Software providers are taking advantage of the changes to advertise their software and provide a misleading message. If your current software is not MTD compliant it does not mean you have to change or upgrade your software. Alternatively, you can use a bridging software to submit returns to HMRC.
What you need to do
- Is your business affected? – Businesses whose taxable turnover exceeds the VAT registration threshold (£85k) will need to keep their records digitally for return periods starting on or after 1 April 2019, unless the mandation deferral period of 6 months applies.
- When will your business be affected? – Below are details when a business will need to record their records digitally and submit their first MTD compliant return based on quarterly return dates:
First mandatory MTD for VAT return period Digital accounting records must be kept from Deadline for filing first mandatory MTD for VAT return 1 April 2019 – 30 June 2019 1 April 2019 7 August 2019 1 May 2019 – 31 July 2019 1 May 2019 7 September 2019 1 June 2019 – 31 August 2019 1 June 2019 7 October 2019
- Are you currently using ‘functional compatible software’? – If you are unsure, we would suggest you contact your software provider. Alternatively, our previous newsletter article provides a brief overview of the popular software providers to small and medium sized businesses.
- Sign up for MTD with HMRC – Each business is required to sign up to MTD with HMRC. Please note that once signed up, returns must be submitted using MTD compatible software. Therefore, the date you select to migrate to MTD may require some consideration.