Are you Making Tax Digital (MTD) ready?
25th February 2019 by Robert Leggett
After what seems like a very long lead time since its original announcement by George Osborne at the 2015 Budget, Making Tax Digital (MTD) for VAT is now just round the corner.
From April 2019, pretty much all VAT registered businesses whether companies or unincorporated with a turnover above the VAT threshold will be required to be MTD compliant.
What are the basic requirements?
Qualifying businesses will be required to keep accounting records “digitally”, using computer software that will be able to communicate directly with HMRC’s systems via an “API link”.
VAT returns will be filed directly to HMRC via “digital software”, rather than using HMRC’s online gateway.
What do I need to do now?
In preparation for April 2019, businesses will need to ensure that their accounting software will be MTD compliant.
If you are already using accounting software (whether online or on-premise) such as Sage, Quickbooks, Farmplan, Xero etc then it is very likely that you will be MTD compliant, so long as you are using the latest version. However, you should check with your supplier to make sure.
It has recently been confirmed that spreadsheets, such as Excel, will be treated as a form of digital record keeping, however you will need additional software to communicate with HMRC. We can provide such ‘bridging’ software at a cost of £10 + VAT per month.
You could therefore decide to stick with spreadsheets for the time being but it is likely that in future the use of spreadsheets will become more and more restrictive, especially when MTD for income tax / corporation tax comes on stream. There can also be many benefits in terms of efficiency, reporting etc in moving to a full accounting package, so if you currently use spreadsheets to maintain your business records you may therefore still wish to consider changing to compliant dedicated accounting software.
Those businesses using manual records, unfortunately, will definitely not meet the criteria of digital record keeping for the purposes of MTD and need to be planning now for migration to a suitable alternative ready for April 2019.
If you currently outsource your bookkeeping it is important that you confirm that the firm is not only storing your records digitally but also will have the facility to submit the returns digitally to HMRC.
How can Ensors help?
Whatever stage you are at with your record keeping, Ensors can help ensure you are ready for Making Tax Digital for VAT.
- If you want to adopt an accounting software package now, or simply upgrade your existing software to the latest version, our Ensors.digital team can help. We will provide you with all the facts to ensure you choose the right accounting package for you and your business. We will get it set up in the right way to maximise efficiency and explain how to use it.
- Alternatively, if you would rather us take the strain, you can send us your VAT spreadsheet and we will submit your VAT returns to HMRC on your behalf.
- Or, finally, if you wish to make the returns yourself but can’t adopt an accounting software package that is MTD compliant we can provide ‘bridging’ software that will enable you to communicate with HMRC. This gives you access to Quickbooks online, so might provide you with a stepping stone adopting a cloud accounting package.
For more information and advice on the right option for you please contact one of the Ensors.digital team at a location to suit you.
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