Making Tax Digital (MTD) for VAT
All the professional blogs are telling us that we have to inform you all about Making Tax Digital (MTD). Let me start by saying that we have a smooth compliant system already in place and, at this point in time, there is nothing that you need to do other than operate as normal.
Let me now tell you a little bit of the background and the work that we and our software suppliers have put into giving you such a smooth ride…
HM Revenue & Customs (HMRC) have decided to standardise the preparation, maintenance, submission and retention of accounting records in an electronic digital format and more or less disallow manual intervention in the process after the initial accounting entries are made and the submissions completed.
From the 1 April 2019, for the majority of people, VAT records will need to be kept in this new format and paper accounting records will cease to meet legal requirements in tax legislation. This means that when you send in the original accounting records such as timesheets and expenses records, they are entered into the core accounting spreadsheets and, after relevant reconciliations are done, they are entered by us via an HMRC API (Application Programming Interfaces platform) and onto the HMRC server, prompting a confirmation of receipt to us.
This is the start of the new digital accounts plans set out by HMRC, starting with VAT in April 2019 for most companies, continuing to other taxes by 2020.
In summary, you do not have to worry about this at all – we have it sorted.
Sam Heller FCA