This month, HMRC launched a pilot for its new online VAT service, Making Tax Digital. The Making Tax Digital (MTD) scheme will require digital transactional recording and filing of UK VAT returns from 1st April 2019.
From April, Making Tax Digital will mean that around 1 million businesses who are registered for VAT will need to keep their VAT records digitally and file their domestic returns using software that is compatible with MTD. However, this will only be for businesses that have a taxable turnover of £85,000 or over.
Theresa Middleton, Director for Making Tax Digital for Business, said that MTD will help businesses “manage their business income and expenses and getting their tax right builds on this momentum and will also help them get more control over their finances.” With so many businesses using digital tools, Mel Stride MP, Financial Secretary to the Treasury commented that it was “a major step towards bringing VAT into the 21st century.”
Users of UK versions of reputable accounting software packages will obtain updates from their suppliers to achieve this, but the new requirements may be an issue for businesses which do the final stages of their VAT accounting in Excel rather than within the system. In response to this problem there has been a delay until 1 October 2019 for charities, VAT groups, public sector entities, and foreign companies that are VAT registered in the UK, all of which are among the businesses most likely to either be doing bespoke VAT accounting outside their accounting package, or to be using non-UK software versions.
Essentia has developed a bridging tool that allows people who are doing their VAT accounting Excel (or in another medium that can be imported into Excel) to submit digitally from Excel and become fully MTD compliant.
The UK government guide to Making Tax Digital is here: https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat
If you would like some more details on Essentia’s bridging tool please contact firstname.lastname@example.org
This story was originally posted on VAT Life, Quipsound’s quarterly newsletter in association with Essentia Global Services. Click here to see the story and more on VAT Life.