Making Tax Digital is Here - Our Practical Advice on What To Do Now!
Making Tax Digital (MTD) is here!
If you’re a business with a turnover over £85,000 then MTD will affect you. Some exceptions do apply, but in broad terms any business with a vatable turnover of £85,000 will now be included in the MTD scheme.
If you’re business is VAT registered but has a turnover less than £85,000 then you’re currently not affected by MTD.
What is Making Tax Digital?
HMRC introduced MTD on 1stApril 2019. Any businesses, including Sole Traders, Partnerships and Limited Companies are included.
You must keep and submit your VAT return to HMRC in a digital format. The old HMRC VAT submission portal will be no longer be available. Returns must be paid via an HMRC digital software provider instead.
For a full run-down on what MTD actually is please see our recent What Is Making Tax Digital article.
What Records Do I Need to Keep?
You must keep and submit your VAT return to HMRC in a digital format.
There are two options open to your business:
Maintain detailed accounting records on a spreadsheet such as Excel and use Bridging Software to submit your return to HMRC.
Maintain your accounting records using approved software such as QuickBooks, Xero, Freeagent etc. You can then submit your VAT return to HMRC at a click of a button.
If you don’t already keep your records on a spreadsheet or on approved digital accounting software, please speak to us asap and we can guide you through what you need to do.
When do I need to sign up to MTD by?
Any businesses with a VAT quarter starting 1stApril 2019 should now be signing up to the MTD scheme. Your next VAT return for 1stApril 2019 to 30 June 2019 will need to be filed under MTD.
If your VAT quarter has a different end date, here’s when you need to sign up to MTD:
VAT Qtr Last non MTD VAT Register for Deadline to
End Date Filing Deadline MTD from Register for MTD
30 April 2019 7th June 2019 8th June 2019 4th September 2019
31 May 2019 7th July 2019 8th July 2019 4th October 2019
We'd strongly advise avoiding registering at the last minute! HMRC VAT helplines are already extremely busy, so if you encounter problems, you may not be able to resolve them instantly.
Once you’ve signed up for MTD, then all future returns will need to file under MTD. Therefore, you may want to consider holding off registering until you’ve filed your next return if your VAT quarter ends on 30 June or 31 July 2019.
If you pay by Direct Debit, you need to wait until your DD for the quarter ended 31 May, 30 June or 31 July has been collected.
Businesses submitting monthly returns should sign up for MTD asap as you should be filing MTD returns already!
How do I Sign Up for MTD?
Does your accountant submit your VAT returns?
If you have an accountant (agent) who normally submits your VAT returns for you, they can sign your company up for MTD. It’s still your responsibility to make sure this is done, so if you haven’t heard anything about being signed up for MTD, check with your accountant that they are planning to do so for you.
You submit your businesses VAT returns
You’ll need to use your current Government Gateway login to access the registration portal. If you don’t have a Government Gateway, don’t worry you can create one as part of the registration process.
If you’re unsure if you have a Government Gateway login, try to remember if you have signed into HMRC to file VAT returns before, or perhaps view Corporation Tax liabilities etc. HMRC sometimes refer to this as your company’s Tax Account. If you have, try logging in to see if you can access the MTD registration pages. If you get stuck you can call the HMRC VAT online helpline, the details of which can be found here: https://www.gov.uk/government/organisations/hm-revenue-customs/contact/vat-online-services-helpdesk
Once you’ve accessed your Government Gateway, follow the onscreen instructions which will guide you how to sign up. You’ll need to provide information about your business including name, email address etc. If you’re self-employed, you’ll also need your NI number.
Once you’ve signed up HMRC will send you a confirmation email within 72 hours. Don’t try to file your return until you’ve received your confirmation email.
Will My VAT Details Change?
Your VAT number, quarter ends and filing deadlines will remain the same.
If you would like any further advice on MTD, contact us today on 01636 681181 for a chat.
The above is a general guide to MTD. However please always consult your accountant about your company's VAT affairs as exceptions do apply to the above.