12 July 2019
Services:
VAT & Customs Duty,
Online Accounting
On April 1st 2019, Making Tax Digital for VAT was put into effect. If you fall under the current turnover threshold, you’ll need to prepare and file your first MTD VAT return on August 7th 2019. This will be for the quarter ended on 30th June 2019.
Who does MTD apply to?
MTD applies for all VAT registered businesses with turnover over the VAT registration limit, which is currently £85,000. MTD compliance is optional if you fall below the current threshold.
If you are not registered for Making Tax Digital with HMRC, you can find out how to on HMRC’s website.
MTD requirements
You are now required to maintain all your VAT records on sales and purchases digitally. Links need to be put in place where there is more than one system in use.
To be compliant, you have several options:
- You can use up-to-date cloud software such as Xero.
- You can use spreadsheets with HMRC bridging software which will give you digital links for filing online.
- You can use your own bespoke software with a digital link between applications.
You can also use a combination of the above. As long as your records are all digitally linked, you are being compliant with MTD.
Exemptions & Grace Period
HMRC have granted a soft-landing period of one year for any errors or lateness in filing. This will allow you to get used to the new systems in place and allow for additional training.
Some exemptions will apply, such as religious or technological reasons. These will be applied strictly on a case by case basis.
Direct Debit
In addition to the delays, you will need to leave sufficient time to set up a direct debit. If you want to set up a direct debit for MTD for VAT, there is a 5 day turnaround period on this.
MTD Factsheet
Our MTD factsheet contains more details about the key points you need to know about Making Tax Digital.
How can Haines Watts Leeds help?
We are Leeds accountants who are here for you to provide as much help as you need in getting your business compliant with Making Tax Digital. Contact us today to discuss how we can help you.