MTD Facts and Fiction
All VAT registered businesses with annual taxable turnover exceeding £85,000 must comply with the making tax digital (MTD) rules for VAT periods beginning on and after 1 April 2019. However, a few businesses have been deferred until the period that begins on or after 1 October 2019. If you are in the latter group you should have received a letter from HMRC
There are two requirements for MTD: to keep your VAT records in a digital format and to submit VAT returns using MTD compatible software. This is neither as complicated nor as difficult as it first seems; if you already record transactions on a spreadsheet or some
form of accounting software you are already meeting the first MTD requirement. If you currently use a spreadsheet based system you will need to buy some new MTD software to read the relevant VAT totals from the spreadsheet and submit them to HMRC as your VAT return. This type of bridging software is not expensive.
Your VAT software does not have to be cloud based and you do not need to keep your entire VAT accounting system on one software program. As long as there are digital links between different pieces of software or spreadsheets, your VAT accounting system can be made up of several software elements.
Do not be bamboozled into upgrading to the latest version of your accounting software to allow you to submit VAT returns under MTD. Most accounting packages allow you to download the data into a spreadsheet format (CSV) which can be read by bridging software in order to submit the VAT return.
We can help you choose the most appropriate MTD software for your business and provide you with training and setting up/transitional support.
Alternatively, we can take the burden off your hands and you can “contract out” your book-keeping and data entry to us. We will then do your book-keeping on a suitable online system, and give you online access to it so that you can keep up to date with reports and information about your sales, profitability, cash flow, tax liabilities, etc.3
Contact us for more details.