A recap
Making Tax Digital is a fundamental change in the administration of the UK tax system. Individuals and businesses will have a unique digital tax account and will be required to file information in a prescribed format.
This is a staged process starting with the record keeping and the filing of VAT returns.
There is a useful link from HMRC about Making Tax Digital:
www.gov.uk/guidance/help-and-support-for-making-tax-digital
Implementation
Making Tax Digital will start for VAT from April 2019.
1 April 2019 MTD starts for non-complex businesses over £85,000 VAT thresholds for VAT periods beginning on or after 1 April 2019
7 August 2019 First MTD VAT filing deadline for Vat returns period 1 April 2019 to 30 June 2019
1 October 2019 Complex businesses who deferred have to start submitting VAT returns
Complex businesses include VAT groups, non profit organisations and some public sector organisations.
Record Keeping
VAT registered individuals and businesses have to maintain their record keeping in a digital format using an approved MTD compliant software.
HMRC have issued a list of such software which can be found on the link below:
https://www.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-vat
What can and are Dickinsons doing for its clients?
Currently our clients may either maintain their own record keeping and submission of VAT returns or alternatively we may assist them with this as part of our ongoing service.
No matter the level of assistance we currently provide we can help you ensure you are compliant for Making Tax Digital.
VAT Registered Business where Dickinsons assist in the preparation of VAT Returns
We will be signing you up for Making Tax Digital. You will receive notifications to confirm that we are your agent by way of an authorisation code and for you to confirm your email address for future communication.
Dickinsons will link the MTD compliant software to our agent services account that will allow, after your approval, VAT returns to be submitted digitally through the new system.
VAT Registered Business who prepare their own VAT Returns or have alternative external assistance
If you currently use software, it is important to ascertain if it is compliant. Some software will only require an update to a newer version however if you are using a desktop version this may require a migration into a cloud based version of the software. Many of the software providers can assist with this however we do have direct support teams with some of the software providers and if you contact us we can help guide you to identify the changes required.
If you do not use any software and maintain your record keeping manually or on Excel you will need to consider moving to a software provider. Some of the software providers are creating bridging to link spreadsheets to the software. Again please do contact us to help identify the necessary steps.
Once you have your compliant software you will then need to be set up for Making Tax Digital with HMRC.
There is a separate setting up process to create or move your existing HMRC Government Gateway Account to the new Digital Tax Account.
Once set up you will then need to sign up for Making Tax Digital in this account.
Please click on the link below to access the HMRC sign up page:
www.gov.uk/guidance/sign-up-for-making-tax-digital-for-vat
You will need your current government gateway login details, VAT number, Company Number (if a Ltd company) and possibly details from your last submitted VAT return.
The last step will be bespoke to the software you use but will in essence require you to log in to your software and link to activate the software to your Digital Tax Account.
Depending on your software there will be different processes, we have provided links on how to activate your software through three software providers, Xero, Quickbooks and Sage:
Xero:
https://central.xero.com/s/article/Switch-to-our-new-VAT-return-for-MTD
Quickbooks:
Sage:
https://ask.sage.co.uk/scripts/ask.cfg/php.exe/enduser/std_adp.php?p_faqid=40898
It is important to note that it will take 72 hours before you have been signed up for Making Tax Digital and you should receive a confirmation email before you link your Making Tax Digital Software to submit your next VAT return.
If you have any questions please do not hesitate to contact your contact partner on 01923 776818.