What is happening?
As part of the Government’s Making Tax Digital (MTD) programme VAT registered businesses will have to submit their VAT return information digitally through ‘MTD functional compatible software’. The MTD rules will apply from your first VAT period starting on or after 1st April 2019. Businesses will also need to keep digital records (for VAT purposes only). In simple terms this means that some form of computerised accounting system must be used to connect to HMRC to submit information to them. Businesses who currently use spreadsheets can continue to do so however the spreadsheets will need to be combined with third-party commercial software to ensure the seamless flow of data from the business to HMRC. HMRC have now confirmed that MTD will be deferred for 6 months for VAT groups, unincorporated not for profit organisations and those required to make payments on account and annual accounting scheme users.
- From 1 April 2019 businesses will no longer be able to submit their VAT returns through the HMRC website
- Businesses will need to maintain their VAT records on the accounting software
- The only exempt businesses from MTD for VAT are businesses which had taxable turnover below the VAT threshold for the previous 12 months and those listed above.
- Failure comply with MTD for VAT could result in penalties
How it affects you?
If you are VAT registered and do not fall into one of the exempt groups listed above and you do not currently use a digital accounting package for your VAT records you will need to start planning for Making Tax Digital now. This is going to significantly effect the way businesses especially small businesses keep their VAT records as many of these will currently keep their records manually or on spreadsheets but under MTD they will be forced to go digital with all the additional time and cost associated.
What can you do?
Haines Watts can provide advice and assistance in ensuring your systems comply and can help you decide which the best option for your business is and we can also provide support and training on how to use the software. Alternatively we can assist with the completion and submission of the VAT returns on your behalf. Please contact us if you have any questions or require guidance on MTD for VAT.
Want to know more? Call us on 01472 355215 or email firstname.lastname@example.org