Making Tax Digital for VAT begins on 1st April 2019.
VAT records will now have to be kept digitally and submitted via compatible software. Paper records such as simplex books and similar will no longer be acceptable to HMRC.
So let’s look at some of the myths:
- I currently submit via the HMRC gateway – I don’t need to do anything. Not true. Businesses above the VAT Threshold (£85,000) will need to file using MTD-compatible software. The current submission method will not be compliant.
- Paper records are sufficient as long as I transfer the totals digitally. Not true. Spreadsheets are still allowable but will require bridging software to comply. The easiest way to comply is to use fully MTD compatible software.
- My accountant will do it all for me. Possibly. If you are doing own bookkeeping you will either have to put steps in place to comply with MTD or liaise with your accountant to transfer your bookkeeping to them.
- Businesses will have to report more regularly to HMRC. Not true. The frequency will still remain in line with your current VAT filing, it’s simply a different way of filing the information.
The above points have been taken for an article by our software provider – Xero.
If you require assistance with the transition to MTD please don’t hesitate to get in touch.