Making tax digital
From 1st April 2019, if you are VAT registered and have a turnover of more than £85,000 then the making tax digital (MTD) scheme for VAT will be mandatory.
If you are eligible you must join the scheme and if, for whatever reason, your turnover falls below the £85,000 threshold you must stay on the scheme and cannot revert to the old way of submitting returns – unless you deregister or become exempt for MTD.
If you qualify then you will need to change the way you file your VAT return with HMRC starting for your VAT period starting after the 1st April 2019:
- If your VAT quarter end is March then your first MTD submission will be June 19
- If your VAT quarter end is April then your first MTD submission will be July 19
- If your VAT quarter end is May then your first MTD submission will be Aug 19
The new regime means that HMRC will receive the same VAT return information as before, but it needs to be sent by an API (electronic) link to HMRC and can’t be typed in manually via online services.
VAT frequency and payment deadlines will remain the same as will eligibility for VAT special schemes.
When filing your return, the transactions that make up the return need to be kept digitally, this can be done using an accounting software package or by using spreadsheets.
Some software accounting packages that are up to date will have the API link required already in (SAGE ONE for example) so you will just need to send your return via the software package.
However, some older versions and spreadsheets won’t have this capability and therefore two options are available:
- Upgrade your software for the latest version with the API link. This may not be practical, or possibly cost prohibitive.
- Use our software to send the data to HMRC. We have already invested in the new software to enable our clients to maintain their existing VAT return process in a compliant way.
