If you run a business in the UK with a tax threshold in excess of £85,000, it is likely you will now be submitting VAT returns digitally. This will be sent using software that is compatible for the project and its use is mandatory.
From 1st April 2019, most businesses went live with the software installed and authorised. Some concerns – with more complex VAT structures – have been given until 1st October 2019 to comply.
Over the next few years, even companies with a smaller turnover and individuals will have to comply with the digital tax returns method. Migrating over to the new software sounds like a monumental task. But many have already made the transition and there a very few problems reported back.
You see, in the lead up to the go live date of April 1st, several software companies worked together with HMRC to make sure the concerns and guidelines were going to be met. When the software was eventually designed, it was checked and approved by HMRC representatives and cleared to be sold to businesses.
The cost of software installation has been kept at a minimum and it will always let you submit your VAT returns in a compatible manner with Making Tax Digital for VAT. The signing up process is no monumental task either. Businesses can sign up as late as just 72 hours before the VAT returns are due.
Those businesses using direct debit as payment structure would need to allow four more days for bank transfers to complete (in other words, seven days).
The frequency, deadlines and dates of VAT submissions will not change during the software migration. After you have signed up for MTD for VAT, you cannot use online services to send your VAT returns.
Many businesses have been using online services in the past. Whilst it can still be used for internal purposes, the MTD for VAT software should become the priority solution for submitting returns from here on forward.
Are There Different Versions of MTD for VAT Software?
Yes. But only two. There is the MTD for VAT software for Individuals and the MTD for VAT software for Companies – which is for limited liability partnerships and Ltd. Companies.
If you have not done so already, you must choose the right software and you’ll be sent everything required to get up and running. This will include login details and an online submissions platform.