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Making Tax Digital - for VAT registered businesses

Your obligations from April 2019 onwards

Making tax digital was introduced from 1st April 2019. Under the scheme VAT-registered businesses are required to maintain digital records, complete their VAT returns from the digital records and submit them digitally to HMRC as opposed to the current submission option on the website.

It’s important to know what is required and what records must be held digitally. It’s also important to decide what type of software will suit the business, and whether that be cloud based, desktop based or using existing options and a bridging software.

The vast majority of VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are now required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns.

If you are not sure what records you should keep or what software is required then simply pop your details into the contact form at the top of this page and we will get back to you to discuss your requirements in more detail. Alternatively your could call us on 024 7634 9192 or Email: m-t-d@sheridanaccounting.co.uk

You could take advantage of our bookkeeping service, allowing you to spend your time more effectively on running your business and earning money. Whilst we take away the headache of doing your books.

This is the first step towards HMRC taking everyone into the Making Tax Digital process.

 

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FAQ's

There is a variety of software solutions available, most of which will be M-T-D compliant, we can advise on one which will be suitable for you. If you are still using excel type spreadsheets then you can use "bridging software", effectively allowing you to use a link to complete your online VAT return.
The records you need to keep digitally for Making Tax Digital for VAT are:
  • business name and contact details
  • VAT number and details of any schemes used
  • VAT on supplies made and received
  • adjustments to returns
  • time of supply (tax point)
  • rate of VAT charged on supplies made
  • reverse charge transactions - if your software does not record them, you need to record them twice as a supply made and a supply received
  • daily gross takings (DGT) if you use a retail scheme
  • purchases of assets you can reclaim tax on if you use the Flat Rate Scheme
  • value of sales made and total output tax on purchases under Gold Accounting Scheme (if applicable)
  • documents that cover multiple supplies made or received on behalf of your business by:
  • volunteers for charity fundraising
  • a third party business
  • employees for business expenses in petty cash

    • You’re automatically exempt from Making Tax Digital for VAT and do not need to apply if:

  • your taxable turnover has not been above £85,000 since April 2019
  • you’re already exempt from filing VAT Returns online
  • you or your business are subject to an insolvency procedure

    • You can apply if it’s not reasonable or practical for you to use computers, software or the internet to follow the rules for Making Tax Digital for VAT.

    This could be because:

  • of your age, a disability or where you live
  • you object to using computers on religious grounds
  • of any other reason why it’s not reasonable or practical

    • HMRC will consider each application on a case by case basis.

    If you’re a VAT registered business with a taxable turnover above £85,000, you must follow the rules for Making Tax Digital for VAT.
    To complete your VAT returns you must now be registered for M-T-D and be using either compatible accounting software or be using "Bridging link software".