The implementation date for the HMRC Making Tax Digital (MTD) Scheme is rapidly approaching as Promar FBA Manager Cheshire & North Wales Charlotte Barber explains.
HMRC still intends to move to digital submission of VAT returns under its MTD initiative on April 1st…which is only 59 days away. Despite representation from farming organisations and some MEPs, there is currently no indication that the launch will be deferred, so if your business is VAT registered you must make sure you are compliant and ready to go by the end of March.
The MTD VAT rules apply to the first VAT period starting on or after 1st April 2019. So for Monthly VAT reporting the April 2019 VAT return figures will be the first that need to be submitted digitally. For quarterly VAT reporting, it depends on when the VAT period starts. The first quarter which will have to be entered digitally is the latest VAT quarter beginning before 30th June.
In simple terms, under the MTD scheme all records required for completion of the VAT return must be kept digitally on what is described as functional compatible software. This is software that will automatically link with the HMRC VAT system and update the VAT return with no manual intervention.
The software must be able to keep all required records in a digital form, create a VAT return from those records and provide HMRC with that
information digitally. It must also be able to receive information from HMRC about the business’s compliance records.
You can no longer complete your VAT return from a manual cash analysis book and many older, existing computer systems may not be compliant and will need replacing. So it is important you start preparing for the change now.
Our Farm Business Accounts package is fully MTD compliant and it can open the door to greater financial control, cost management and benchmarking opportunities as well as meeting the MTD rules.