MTD For VAT Roll-Out: Are You Prepared?
Making Tax Digital (MTD) for VAT’s roll-out date is nigh. Whilst HMRC have run their awareness campaign for the initiative, some taxpayers are still unaware of the change or are concerned how to ensure they’re compliant…
10 Minute Read
Updated: 19 Aug 2019 Created: 30 Apr 2019
Making Tax Digital (MTD) for VAT’s roll-out date is nigh. Whilst HMRC have run their awareness campaign for the initiative, some taxpayers are still unaware of the change or are concerned how to ensure they’re compliant in time.
The digitalisation of VAT is quite easy once you understand it and know how to prepare. Here we provide a summary of MTD for VAT so you can get ahead before its launch date.
What it is
Quite basically, MTD for VAT is the process of filing your VAT records in an electronic format. It will require an entirely digital path to communicate the information to HMRC’s application programming interface (API) platform. To do so, compatible software should be employed. Spreadsheets are accepted, but digital links will still be required, and therefore bridging software is a necessity.
Who it affects
You may be exempt from submitting your tax electronically. Only those who are VAT-registered and have a taxable turnover above the current threshold (£85,000 in 2019/20) are required to file this tax digitally. However, you may have the option to apply for exemption if you have an acceptable reason why doing so isn’t feasible, for example due to age, disability or living in a remote location.
When it will impact you
If you do need to submit your VAT digitally, you may not need to instantly. You aren’t legally required to submit your information in this way until the start of your first VAT period after the roll-out date.
For instance, if your current quarterly period began on 1st March 2019, then the return can be filed using your existing method. Once these three months are up, on 1st June, this would entail MTD-compliant VAT submission. However, you will need to start keeping digital records from the start of your VAT period.
Here’s a handy breakdown showing example VAT periods and when your first MTD submission would be:
|VAT period||First MTD-compliant submission|
|1st April-30th June 2019||7th August 2019|
|1st May-31st July 2019||7th September 2019|
|1st June-31st August 2019||7th October 2019|
Information to retain
It’s not necessary to keep all related data in a digital format. HMRC have stated that they will require information like your VAT registration number and details of supplies made and received electronically. There may be some forms of data (such as invoices) that don’t require digital submission, but you can opt to do so. There are also specific records that HMRC say should be kept in their original format, such as the C79 form (import VAT certificate).
How you benefit
The purpose of the initiative is to boost efficiency and compliance. So, if you do need to submit your VAT digitally, it should simplify your submission process and reduce errors. This is because the MTD-compatible software will organise the information for you and prepare it into the VAT return. The ability to enter data at any time will also allow you to track it throughout the tax year, meaning you’ll have more control over your information too.
Preparing for MTD for VAT
You can benefit by getting prepared for MTD for VAT as soon as possible. Simply select a suitable bridging software provider whose tools will link with your HMRC account and transfer your VAT information directly to HMRC’s systems. This enables you to continue to use your existing spreadsheet process or non-MTD-compatible software. By getting familiar with these tools earlier, you’ll be able to file your VAT digitally with ease.
GoSimpleTax have launched a new tool that has exactly these features and more: GoSimpleVAT. It works seamlessly with other digital platforms too. Register for a free trial today
Trusted by over 10,000 subscribers
You don't need to be an expert to complete your self assessment tax return.
Managing your finances has never been so easy.
Start you self assessment tax return today for free.Get Started
A Guide To Being A Self-Employed Hairdresser
16 Jun 2020
How To Succeed (Financially) As A Personal Trainer
08 Jun 2020
Get Your Finances In Order: Essential Lessons From A Personal Trainer
28 May 2020
How GoSimpleTax Works
Simply register for free with your full name and email address.
Select Your Income
Select the income you receive and follow the hints and tips for potential tax savings.
Validate Your Information
Validate your personal information and submit directly to HMRC to get confirmation in just seconds.
Work Anywhere, With Any Device
Gone are the days of fretting over a calculator surrounded by scraps of paper at the eleventh hour.
GoSimpleTax’s tax return software uses the information you upload in real time to calculate your income and expenditure, working out the tax you owe and sending you helpful notifications when there’s the possibility of a mistake.
"The software is intuitive and proved very easy to navigate. I found the whole process refreshingly simple. I saved a lot of money too!"
"Easy to use and value for money. Everything you need to do your tax."
"It fills in all the forms and sends them to the Inland Revenue. Not expensive either. Takes the stress out of doing your tax return online."