As the Making Tax Digital for VAT deadline of April 2019 gets closer, there’s no better time to prepare for one of the most important changes for UK businesses. To help you prepare, our PW Finance Manager Sue Kowszun shares her tips to guide you through your preparations.
As of 1 April 2019, VAT-registered businesses in the UK will need to submit their VAT returns using “functional compatible software”, as part of HMRC’s Making Tax Digital (MTD) plans.
It will no longer be possible to submit VAT returns manually via HMRC’s website. It must be done via software.
This is a big change and businesses need to prepare now.
Making Tax Digital is about more than merely filing your VAT return digitally; you’re also required to store some of your VAT information digitally (digital record keeping) and if you use more than one piece of software to store your VAT information and do you VAT return, they must be “digitally linked.” You might need to start preparing for these requirements well in advance.
Other components of Making Tax Digital, such as income tax and corporation tax, will follow from as early as April 2020.
What you need to do:
If you’re already using accounting software, transition might be relatively straightforward and could involve little more than taking advantage of feature updates. However, if you’re using older software, this might not be the case and you should check you have “functional compatible software.”
If you’re using spreadsheets or other manual records to prepare your VAT return then you need to consider ways to replace that existing process with a software-driven approach for recording VAT details and filing VAT returns.
If you have access to an accountant, you might find it beneficial to speak to them about these issues. Alternatively, you can speak to Sue Kowszun at Harlequin Accounting & Financial Services Limited via: firstname.lastname@example.org
Text by Sue Kowszun