Time marches on and the start date of 1 April 2019 for MTD approaches. This update bulletin hopefully will bring you up to date as to the implementation and give some guidance as to the next steps.
MTD commences from 1 April 2019 and businesses whose annual turnover is above the annual turnover threshold of £85,000 are obligated to file their first VAT return for periods commencing on or after this date using MTD.
Two points:-
(if your turnover increases to above the £85,000 you will have to transfer to MTD)
If you are a business that files your own VAT returns you will have to register with the Government Gateway for MTD.
We understand that this will be a simple process such that, after 1 April 2019, as you log in using your existing credentials, you will be asked if you want to register for VAT using the same login and password. (we will be checking this is the case as implementation progresses).
A word about timing here; only register for MTD when your latest VAT has been filed and your next return will be the first using MTD ( you will need to coordinate with point 2 above about the start date).
All of the common cloud-based packages ( e.g. Sage, Quickbooks, Xero, FreeAgent etc.) are or will be MTD ready by 1 April 2019; make sure you are using the latest versions if the cloud does not update automatically.
We would recommend that, if you are using this sort of software but still filing by logging in to HMRC, you file your next VAT return using the software so that your user id and password are already set up in the software.
For users of desktop packages the following versions, or later ones, will be MTD ready:-
Sage-V24.2
Quickbooks-2019
Both of the above charge a monthly subscription so costs may increase for those of you using ‘free’ older versions.
Bookkeeping records maintained using spreadsheets from which figures for VAT returns are derived will still be acceptable but returns must be filed using add-on software enabling two-way communication with HMRC.
Your spreadsheets will need to hold totals for each of the nine boxes requiring completion even if the entries are zero (e.g. for a lot of businesses, box 2, box 8 and box 9 are zero).
We have reviewed the various packages currently available and are looking for ones that appear to satisfy the following criteria we have set:
We have a significant number of clients that we submit VAT returns as agents and use spreadsheets to do the calculations. It, therefore, makes sense for us to use a package that can handle our agent clients and single-user businesses as well.
As more packages are regularly appearing we have not made any decision on recommendations yet but, if you want to review how these packages operate, we list three below worth a look:-
https://www.btcsoftware.co.uk/
https://www.123efiling.co.uk/
https://vitaltax.uk/
As ever, please do not hesitate to contact us if you need additional help and guidance.
Certain outcomes for Brexit could mean boxes 2, 8 and 9 disappear!!
If you would like any advice on Making Tax Digital contact us directly by calling 01623 490 120 or email This email address is being protected from spambots. You need JavaScript enabled to view it..
Haidee is our Personal Tax Director and is a fully qualified tax adviser, having achieved the ATT qualification in 2006. Tax efficiency being her main concern. Specialising in taxation, Haidee provides clients with advice on personal tax, PAYE services, VAT and social security. She also provides guidance to new start-up businesses.
Call us today on01623 490120
or email info@watsonk.co.uk
When you first start a business, your focus is usually on attracting customers, generating sales and building a successful company. Few business owners spend much time thinking about how or when they will eventually leave the business.
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