Are you ready for MAKING TAX DIGITAL (MTD)?

Scope

1. All businesses with UK taxable turnover over the VAT threshold (which is currently £85,000 in any 12-month period).

2. MTD applies to the first return period commencing on/after 1 April 2019, (except for businesses listed on the attached link, who can defer applying the MTD rules until 1 October 2019: https://www.gov.uk/guidance/check-when-a-business-must-follow-the-rules-for-making-tax-digital-for-vat#who-must-follow-the-rules-from-1-october-2019)

Requirements

1. Keep digital records from 01 April 2019.

2. Digitally link bookkeeping software to HMRC, so that VAT return information passes “seamlessly” from one piece of software to another.

3. File VAT returns via API-enabled software for the quarter beginning on/after 01 April 2019, (instead of the current system of typing figures into HMRC portal).

4. Once signed up for MTD for VAT (fV), HMRC will expect the next VAT return due to be submitted under MTD, so it is vital to sign up at the right time:

  • Clients with quarter ending 31st March 2019, unless you are MTD ready, there is no need to sign up for MTD until after you have submitted March’19 VAT return.
  • Clients with quarter ending 30th April 2019, unless you are MTD ready, there is no need to sign up for MTD until after you have submitted April’19 VAT return.
  • Client’s with quarter ending 31th May 2019, unless you are MTD ready, there is no need to sign up for MTD until after you have submitted May’19 VAT return.

5. If you pay your VAT by Direct Debit you will not be able to sign up in the 15 working days leading up to your submission date and the 5 working days immediately after it.

Step by step guide for MTDfV for Business

1. Choose the right software

Before signing up with HMRC, you must have MTDfV compatible software to submit VAT returns.

Talk to us or please click on the web link below to choose a compatible software for your business https://www.tax.service.gov.uk/making-tax-digital-software

2. Sign up for MTDfV

Information you will need to sign up for MTDfV:

  • Government Gateway ID and Password
  • VAT number of business that’s signing up
  • MTD compatible software (see step 1 above)

Click on the web link below and then enter your Government Gateway ID and Password https://www.tax.service.gov.uk/vat-through-software/sign-up/have-software

3. Confirmation Email from HMRC

HMRC will send you a confirmation email within 72 hours of signing up. Do not submit a VAT Return until you receive the confirmation email.

If you have a problem receiving the confirmation email and signing up with your Government Gateway ID and password, click on the below web link to get help from HMRC (VAT online services helpdesk): https://www.gov.uk/government/organisations/hm-revenue-customs/contact/vat-online-services-helpdesk

4. Authorise software

The final step which you need to carry out is in your bookkeeping software that you choose for MTDfV, where you need to click on the appropriate option to authorise it to link to HMRC.

5. Talk to us

If you have any queries on any of the above, we are here to help, so please contact us: call 0208-238-8730 or email accounts@ripefinancial.com