Re: Avanti Group
27/03/2019 - Avanti Group
With less than a week before Making Tax Digital for VAT is introduced for more than a million businesses, HMRC has announced 70,000, only 6% of businesses, have signed up for the new MTD service, which is mandatory from 1st April. Here, The Avanti Group provide myth-busting information about Making Tax Digital:
“I cannot use bridging software after the 12-month soft-landing period.”
There is not a deadline to stop using bridging software, so it doesn’t have to be just a temporary solution. HMRC recognises the need for bridging software as an important form of digital transfer, and it is not just for the soft-landing period
“I cannot use spreadsheets for digital record keeping.”
Whereas it is true that HMRC did try to prevent the use of spreadsheets in the early days of the MTD project, spreadsheets are now officially recognised as an acceptable form of digital record keeping.
“I cannot make adjust the data once exported from the bookkeeping software.”
HMRC recognise that some of the more complex VAT adjustments, e.g. Flat Rate Scheme must be made outside of bookkeeping software. This means you can still make changes once the base data has been exported to a spreadsheet – you only need to document the adjustments in the spreadsheet to preserve the digital trail.
“I must submit to HMRC all of the transactions that make up the VAT return.”
Again, this misconception comes from the early days of MTD, when HMRC was hoping to collect, every individual account posting made in every accounting package by every business. This has now changed – HMRC only wants the nine boxes of numerical data that make up the VAT return.
“I must upgrade my older bookkeeping package to use MTD-enabled cloud accounting bookkeeping software.”
Any record keeping software can be used as long as it can keep the individual transactions and transfer the data in digital form (e.g. CSV file or API link) to MTD bridging software.
“My record keeping software must interact directly with HMRC for MTD.”
Your record keeping software can utilise a bridging solution to submit the MTD VAT return to HMRC.
“I can just type in the nine boxes of data.”
To be MTD-compliant, you must keep your accounting transactions in a digital format. The transactional data must be used to calculate the nine boxes of the VAT return automatically.
“A CSV data file transfer is not a digital link.”
HMRC recognises CSV files as an acceptable form of digital link between the record keeping solution and the MTD submission software.
“I can copy and paste data into an MTD VAT return.”
HMRC does not consider the use of cut or copy and paste to select and move information to be a digital link.
“I can leave MTD for VAT when I like.”
Once you have submitted your first MTD VAT return you cannot go back to the old VAT submissions. The only way to leave is to de-register for VAT.
For further information or assistance with your MTD requirements call 01473 558866 or email firstname.lastname@example.org