MTD is definitely going ahead despite the ‘Doubting Thomas’ view that it would be further postponed. We can confirm that HMRC’s beta testing of digital VAT submission began in April 2018. However, Digital Tax submission other than VAT will commence from April 2020 at the earliest.
From April 2019 MTD will apply to VAT registered businesses with a turnover above the threshold (currently 85K) – therefore all sole traders, partnerships, companies, LLPs and charities. It will not be optional, so current portals and paper will be unacceptable.
HMRC will not be providing free software to businesses for MTD VAT submission. You may choose for ease of use, security of storage and minimal capital outlay to lease KEYPrime monthly for either your PC or from a cloud platform. Whether in the cloud or on your PC only the summary figures are being transferred to HMRC, the underlying invoice and receipt detail still remain in your database. Records, digital and paper, must be kept for six years.
The information that must be reported digitally includes:
- Business Name
- Place of business and VAT registration number
- Information about supplies made and received
A further myth is that those using spreadsheets or paper records can continue… spreadsheets and paper based systems are NOT “in a digital environment” and so cannot connect directly with the HMRC interface (API).
In summary, for businesses not already using computer software to keep their records this change could be a “eureka” moment bringing multiple benefits the first of which is efficiency. Once the system is up and running, which is a fully supported operation at Landmark, it can provide real-time information, reduce errors and save you time and money on administration, consultancy and professional fees. Contact us if you want to know your options.