23 November 2018
Making Tax Digital for VAT (MTD VAT) requires VAT registered businesses with taxable turnover above the VAT registration threshold to keep records in digital form and submit their VAT Returns using MTD compliant software.
Those that are above the VAT threshold will be mandated to use MTD VAT service from April 2019. Those that are below the threshold can use this service voluntarily. HMRC customers (and their agents) will use digital record-keeping software to interact directly with HMRC systems.
HMRC's VAT Notice 700/22 on 'Making Tax Digital for VAT' provides detailed information on these requirements and legislations.
MTD VAT requires businesses to record business transactions digitally, and in real time (or as close as possible). This will be underpinned by a requirement for subscribed businesses to send a summary of those records (a VAT Return) that will be generated and sent to HMRC using software or an app. Most businesses submit a VAT return on a quarterly basis, but some businesses currently file VAT Returns on a monthly or annual basis and this will continue under MTD.
The Making Tax Digital rules apply from the businesses' first VAT period starting on or after 1 April 2019. A 'VAT period' is the inclusive dates covered by your VAT Return.
HMRC recognise that book-keepers, accountants, businesses and other organisations extensively use Excel spreadsheets to keep VAT transaction records. Businesses will be able to continue to use spreadsheets for record keeping (for the time being). This involves combining the spreadsheet with software to submit VAT returns. Businesses must ensure that their spreadsheet meets the necessary requirements of Making Tax Digital for Business.
HMRC have stated that businesses will no longer be able to use the current free VAT online portal for submitting their VAT returns and to overcome this, Andica has developed MTD VAT Bridging Software which provides Microsoft Excel Integration solution.
So if you are maintaining your VAT return details in the Microsoft spreadsheet and would like to continue to do so then you can use Andica MTD VAT Software.