Everyone is talking about it, but do we really know everything about MTD. Here are some key points about what this new government plan is:
Purpose of MTD is to make it easier for individuals and businesses to get their tax right and keep on top of their annual tax returns.
From 1 April 2019, all VAT registered businesses with a taxable turnover above the VAT threshold (£85,000) must keep digital records and file their VAT Returns using software.
The software businesses use must be capable of keeping and maintaining records, preparing their VAT Returns and MTD-compatible so it can integrate with HMRC systems.
HMRC are working closely with software developers to bring new products to the market that are MTD-compliant .
MTD will not be mandated for other taxes until April 2020 earliest.
There are various software options. Sage are offering as perpetual licence with an MTD module to enable you to submit the VAT
Are you using Sage software?
Sage 50 cloud Accounts - if you are using Sage 50cloud Accounts or looking to upgrade to this solution, the MTD module is included as part of your package, alongside support and upgrades, at no extra cost.
Sage 50 Accounts (perpetual licence*) - if you own the software outright, you can continue using the perpetual licence but MUST purchase the MTD module (£300 + VAT per annum) before the legislation comes into effect in April 2019.
We are entering the brave new world of making tax digital. VAT is a first step. If you are fearless with spreadsheets we recommend Vital Tax https://vitaltax.uk/
Submit your VAT return using Excel
VitalTax makes it easy to submit your VAT return without having to leave Excel. Simply select the desired cells in your spreadsheet and the application can import their values into the relevant box on your VAT return.
With just one click of a button, your VAT return is sent to HMRC via the Making Tax Digital Application Programming Interface (API).
What’s more, you don’t need to have a particular data format or spreadsheet template to use VitalTax, as it can be used with any user-defined Excel spreadsheet.