What is MTD for VAT?
The introduction of HMRC’s Making Tax Digital (MTD) for VAT from 1 April 2019 brought a fundamental change to the way businesses submit their VAT returns.
Initially, only VAT-registered businesses with a taxable turnover exceeding the VAT threshold (currently £85,000) were required to record transactions digitally and file their quarterly returns using compliant software. The scheme was extended in April 2022 to apply to most VAT-registered businesses, regardless of turnover. It is possible to apply for an exclusion if you can be considered ‘digitally excluded’ or otherwise have an acceptable reason. For example, living in a remote location with no/poor internet access.
Businesses registered for MTD need to keep digital accounting records and must use HMRC-compliant software to make their VAT submissions. A list of HMRC-compliant software can be found
here
It is essential therefore that all affected businesses have adequate software in place to comply with the regulations, and, if using more than one system, that data flows between them in a compliant way. For example, copy and pasting, or manually typing data across from one system to another is not allowed.
How we can help
Online accounting gives you the right tools to manage your finances more efficiently. Used correctly, it offers an overall, detailed and up-to-date view of your business for better decision-making.
From our experience of working with businesses who use online accounting software, two products we would strongly recommend are Xero and QuickBooks Online. We can provide versions of these specifically tailored to meet your needs and offer help with the initial set up and training.
The software is available by monthly subscription. Both Xero and QuickBooks Online offers subscribers constantly updated systems to guarantee that you are always using the latest version.
For businesses looking to outsource, we offer a full bookkeeping and VAT return submission service.
If you would like more details or to arrange a free software demonstration, please email Martin Southern at
m.southern@morriscrocker.co.uk or
tel 023 9248 4356.