Making Tax Digital – how to comply

As of 1 April 2019, there is new government legislation in effect , “Making Tax Digital for VAT” (MTD) meaning that all VAT records must now be kept digitally with VAT returns being submitted using HMRC approved software’s. This takes effect from your businesses first VAT period starting on or after 1 April 2019, unless, HMRC issue a letter stating that business is in a deferral group, then first VAT period starting on or after 1 October 2019.

Who needs to comply?

Any VAT registered business with taxable turnover in excess of the VAT registration threshold (currently £85,000). If taxable turnover subsequently falls below this, it must still comply until the earlier of de-registration of VAT or the business subsequently qualifies under another exemption criterion.

What are the exemptions?

• Taxable turnover falls below £85,000. This exemption is given automatically but HMRC will allow businesses to voluntarily sign up for MTD.
• Businesses that are already exempt from filing VAT Returns online.
• Businesses that are run entirely by a religious group who object to using computers.
• Use of computers is unfeasible due to a disability or low internet connectivity where a person lives.

When must you sign up by?

A business must register with HMRC at least 7 workings days if pay VAT liability by Direct Debit, or at least 72 hours if don’t pay VAT liability via Direct Debit, before the VAT return is due.

How do you sign up?

Use the following link to register for MTD //www.tax.service.gov.uk/vat-through-software/sign-up/have-software.

You will need;
• your Government Gateway user ID and password
• business trading address postcode, VAT number and registration date.
• if business is a company, it’s registration number
• if business is not a company, your date of birth and national insurance number

HMRC will send an email within 72 hours to confirm the business is signed up.

Once MTD is set up, you will no longer be able to use the online services to file VAT returns. Instead a HMRC compatible software is required. HMRC provide an extensive list of software providers on their website //www.tax.service.gov.uk/making-tax-digital-software.

Records will need to be kept digitally including information on sales the business has made and the amount of VAT charged on these. Until 31 March 2020 HMRC will accept the copying and pasting of data between software’s at which point they will require data to be more automated.

How can Invicta Accounting help you?

If you feel confused or worried you will miss a critical step, or just don’t have the time to deal with this, let Invicta Accounting take this off your hands and get the peace of mind that you are fully complying with the “Making Tax Digital” requirements.

• On hand expert advice and support
• We’ll work out when you need to register
• We’ll do the registration for you – all you need to do is confirm your email address!
• Access to MTD ready software
• We’ll keep your digital records up to date

Give Invicta Accounting a call today on 01624 672358 or email us at info@invicta-accounting.com.