Making Tax Digital for VAT… Are you ready?
By now, it is likely you’ve heard about the Making Tax Digital (MTD) for VAT regulations, coming into effect from 1st April this year.
This forms part of the UK government’s initiative to transform the tax system and to encourage businesses to start keeping their records digitally.
MTD is mandatory for all businesses with an annual turnover of more than £85k of VATable supplies. Businesses that are voluntarily registered can choose whether to enrol in this service.
So, are we ready? YES we are! And so is our digital software, Sage and Xero.
Therefore, for the vast majority of you, there will be no noticeable change in the way that your VAT returns are filed. SAGE and Xero are MTD ready and your returns will continue to be filed through the software as they are now.
However, the information that HMRC now requires is more detailed and in some cases our processes will need to change in order to accommodate that.
The main change is that sales and purchases need to be recorded on a supply-by-supply basis, which means that all customer and supplier invoices will need to be entered into the software individually, rather than in a batch, or by statement amount.
For retail clients – sales will need to be recorded daily, rather than weekly, or monthly.
Each invoice will also need to split out the different rates of VAT that it may include, so that they are easily identifiable.
Unfortunately, for some clients this will mean an increase in the time it takes for us to process your records from 1 April.
As your VAT agent we will automatically register you for the MTD scheme after your next return is filed – if you would prefer to do this yourself, or are voluntarily registered and don’t wish to join, please let us know by 31st March 2019.
Any questions, please just pick up the phone.