Did you know that from the 1st of April 2019, the majority of VAT-registered businesses with a taxable turnover above the VAT threshold of £85,000 will be required to use the new Making Tax Digital (MTD) governmental service? In a step designed to save time, reduce errors and cut the risk of penalties, these businesses will need to both keep and preserve their VAT records in a digital form, and file their VAT returns quarterly (or more frequently) using MTD software.
If you are one of the companies that will be affected by this change, what do you need to do?
Digital records of each supply will now be required. This should not only include information about your business, but the time of supply (tax point), the value of the supply, and the rate of VAT charged.
Whoever usually submits your VAT return will now need to ensure that the software used is MTD compatible. This means that it not only needs to connect to HMRC systems, but send and receive information from them. A full list of compatible software can be found here: www.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-vat
Next you will have to sign up for MTD for VAT, which can be done here: www.gov.uk/guidance/making-tax-digital-for-vat. Within 72 hours you will receive an email to confirm that you can submit your returns with your compatible software. After this step, you will not be able to use VAT online services to send VAT returns. Additionally, if you pay your VAT by Direct Debit, you cannot sign up to MTD in the 15 working days leading up to, or the 5 working days after sending a VAT return.
Finally, before you send your VAT return, you will need to authorise your software.
Once these are done, then you’re ready to submit your VAT return. If you would like further information concerning MTD, then the government have put together a handy overview: www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital. Please contact us on 020 7912 2000 or [email protected] if you would like more information about how NetCourier will be affected by these changes.