Making Tax Digital for VAT

2019 will see the introduction of Making Tax Digital (MTD) for VAT. The two key requirements are:

  • to keep transaction – level records digitally; and
  • to use compatible software to submit the VAT return to H M Revenue & Customs

These requirements will be imposed on businesses that are compulsorily registered for VAT (currently with a taxable turnover figure in excess of £85,000) for VAT return periods beginning on or after 1st April 2019.

Voluntarily registered businesses may choose to comply.

The requirements will mean that:

  • each transaction must be recorded digitally, rather than for example, merely entering daily or weekly totals
  • software that is compatible with the Revenue’s system must be used to submit VAT returns. The Revenue portal which is currently used will not be available to compulsorily VAT registered businesses after April 2019
  • payment of VAT must be made electronically

Effectively, it will not be possible to maintain records manually.

Software packages that are commercially available will be Revenue approved as compliant with their Application Programme Interface (API) but as yet a list of approved software providers has not been finalised.

However, the link below will take you to the Government list of software suppliers supporting MTD and Sage and Xero are both on this list:

If you are using a spreadsheet, bridging software or an API – enabled spreadsheet will be needed.

We can help you with Making Tax Digital:

  • to assess the accounting system you use now
  • to choose accounting software and help you to use it
  • or we can do your bookkeeping for you

Contact a member of our MTD team:

Andrew Prouse, Daniel Riches, Nick McKerron, Amy Sole, Peter Michael, Jane Webb