Time is ticking away before the 1 April 2019 deadline – it is just 4½ months away!

For all VAT registered businesses with taxable turnover above £85,000, you will need functionally compatible software in order to submit your VAT returns to HMRC commencing from 1 April 2019.

To comply with Making tax digital (MTD) for VAT your business must:

1. Keep digital records (using MTD compatible software)
2. Submit your VAT return to HMRC through HMRC’s new portal using MTD compatible software (HMRC’s existing online portal will no longer be available)

Essentially, this means no human inputting in order to get any of the data to HMRC – it must be done digitally only.

If you are already keeping your business records on XERO Cloud Accounting, you won’t have any problem complying with MTD. Other software systems are trying to get ready too by the deadline.

If you use spreadsheets, these may be compliant, but we will need to consider each case separately. Spreadsheets will only work with a separate piece of software to link to HMRC’s new portal. This may be a good time to move to a cloud based bookkeeping system like XERO. Amongst many other things, this offers automatic “bank feeds” so you don’t need to manually enter each bank transaction AND automatic input and correct posting of sales and supplier invoices into your accounts – both of which save a huge amount of time and effort.

Do please get in touch via your usual contact should you wish to discuss how your business will need to be ready for MTD.