MTD for VAT starts in April 2019, so this is your last chance to try out the new process before you have to be fully compliant.
If you have a VAT registered business and your turnover exceeds the VAT threshold, MTD for VAT will apply to all your VAT periods beginning on or after 1 April. Under MTD for VAT, HMRC requires you to keep records in a digital format and submit your VAT returns using compliant software.
As HMRC are not providing free software, to be compliant you are likely to need a commercially available solution. As part of the change, there is a new VAT return submission process which you need to register for as it replaces the current government gateway account method. Are you ready?
Having accounting software in place so you comply with MTD for VAT requirements is vital. Our article ‘Are you VAT registered and ready for Making Tax Digital?’ will help you understand if your current software will meet your needs.
Where you need to replace or upgrade software, you could take this opportunity to decide if there are better alternatives for your current needs. We work with all the leading accounting software brands and can help you make your choice. Once you register for the new regime, you will have to file all future VAT returns digitally, so it’s important that your software is right for you.
You also need to think about timing your entrance to MTD for VAT if you pay your VAT by direct debit. To make sure your final payment under the current scheme goes through as it should, you can only sign up for the pilot 15 working days before or 5 working days after your VAT submission date. Once you are in MTD for VAT, you need to set up a new direct debit for all future payments. You will need to set up the new payment instruction as soon as possible after your final non-MTD for VAT settlement is paid.