From 1 April 2019 most VAT registered businesses with a taxable turnover above the VAT threshold (currently £85,000) will be required to keep digital VAT business records and submit VAT returns using Making Tax Digital compatible software.
Step 1 – Check if and when you have to join
VAT taxable turnover is the total value of everything you sell that is not exempt from VAT and should be assessed on a rolling 12 month basis. If your taxable turnover is above £ 85,000 then your joining date will depend on your usual VAT return submission periods and will be:
Businesses under the threshold can elect to submit under MTD for VAT voluntarily and the service is now available for business to submit earlier VAT returns under MTD for VAT.
The commencement date for some businesses is being deferred to 1 October 2019, this includes VAT Groups and divisions, traders based overseas, trusts, not for profit organisations not set up as a company, businesses on the annual accounting scheme and businesses making VAT payments on account.
HMRC will send you a letter to tell you that you are in the deferral group.
Step 2 – Check you have the right software
Before you sign up you must have software that:
- Lets you submit VAT returns
- Is Compatible with Making Tax Digital for VAT
HMRC have a list of software suppliers including bridging software that are already compatible for MTD for VAT as well as those that are still in the development stage. Information can be found here or you can talk to a member of our team who are currently submitting using Quickbooks, Xero, Sage and other bridging softwares
Step 3 – Sign up for Making Tax Digital for VAT
Businesses above the £85,000 threshold will not automatically be transferred to the new system and will be required to sign up to MTD for VAT in accordance with the dates detailed above.
It is important that you ensure you have compatible software in place before you sign up.
The sign up procedure can be accessed here.
HMRC will send you a confirmation email within 72 hours of signing up.
Step 4 – Authorise your software
Once you sign up you cannot use the current VAT online services to submit your VAT return and will need to follow your software providers guidance to ensure any authorisation and linking process is carried out within the software.
Please note, HMRC continue to work on their online resources and it may be that the hyperlinks above will become redundant if the website section on MTD is restructured.
Can we help you?
From 1 April 2019 businesses must make sure they are MTD for VAT ready. Our Accounting Solutions team work with a number of compatible software solutions and have signed clients up for MTD for VAT under the current pilot. We are already successfully submitting VAT returns under the new regime. Please get in touch with any of our experts listed on the right of this page or simply fill out the form below and we will respond to you.