Making Tax Digital
Posted on in Business News , Cycles News , Political News
MTD is changing the way that VAT returns are submitted for retailers from the 1st of April, 2019.
The introduction of these reforms is to reduce the tax gap between tax collected and due by HMRC and, to help businesses stay on top of their taxes. The need for MTD is to alter how VAT returns are made and by using a compatible software VAT returns will now become digital.
If your business has a taxable turnover above the VAT threshold of £85,000 you must:
- Keep your VAT records digitally
- Use the MTD-compatible software to submit your VAT returns.
Retailers will need to start keeping business records digitally from the start of all accounting periods on or after the 1st of April 2019. No additional information will need to be kept as part of these records.
Digital records will include:
- Each supply
- The time of supply (tax point)
- The value of the supply (net excluding VAT)
- The rate of VAT chargedVAT Registration Number
- Details of any VAT accounting schemes you use
Retailers can record daily totals if they are on a retail accounting scheme and currently do so.
The HMRC are supplying a list of MTD-compatible software providers, with software packages ranging from basic record keeping tools to fully integrated accounting systems via GOV.UK. Software products which can extract the required data from records kept in spreadsheets and submit them to the HMRC are also listed, available here.
Software is MTD-compatible if:
- It supports the MTD obligations to keep digital records
- Can exchange data digitally with HMRC