How To Use Spreadsheets To Submit VAT For Making Tax Digital
Making Tax Digital (MTD) for VAT officially came into force on 1st April 2019. However, for many the first MTD for VAT return isn’t required until 7th August 2019 – and this is only for those…
10 Minute Read
Making Tax Digital (MTD) for VAT officially came into force on 1st April 2019. However, for many the first MTD for VAT return isn’t required until 7th August 2019 – and this is only for those whose first VAT period ended 30th June 2019.
You’ll need to know about VAT for MTD if your turnover is over the current VAT registration threshold (£85,000 for 2019/20). Otherwise, you risk being penalised.
An introduction to VAT for MTD
A basic summary of this first phase of MTD is that it makes submitting VAT an entirely digital experience – and through HMRC’s very specific path. Instead of paper returns or using the government’s tools, bookkeeping or bridging software is required.
Whilst spreadsheets were not technically in HMRC’s ‘digital vision’, they ultimately decided (after much lobbying) that they will be allowed for MTD VAT record-keeping. For some, this makes getting to grips with digital filing much easier.
However, there’s a catch: a compatible bridging tool is necessary to file in the correct format. We explain what this software is, along with how exactly you can go about using spreadsheets to submit VAT, below.
What are the benefits of using spreadsheets for VAT?
You can take advantage of MTD spreadsheets in a number of ways.
Spreadsheets allow you to maintain your current processes. MTD is a big change, and using a familiar tool can ease you in.
They also accommodate your needs – whether you’re an accountant filing for multiple clients using specific formulae or a business owner doing your own taxes. They make VAT calculations much more straightforward, and you can pull these through to HMRC compliantly via bridging software.
As your current practices can continue, the transfer of information through bridging software is incredibly simple.
How do you use spreadsheets for filing VAT returns?
Using spreadsheets to submit VAT is simple – you just employ their functionalities as you currently do. All HMRC require is digital VAT records and calculation in your spreadsheet – the information is then passed to the bridging software digitally and onwards to HMRC.
These tools quite literally ‘bridge the gap’ between your spreadsheets and HMRC.
You’ll need to input the same type of data as you have for previous returns, such as:
- Time of supply (tax point)
- Value of supply (net excluding point)
- Rate of VAT you charged
You should also share information about your business. For example:
- Business name
- Main business address
- Your VAT registration number
- Details of any VAT accounting systems you use
After this is entered, you’ll just need to make sure you use bridging software that’s on HMRC’s approved list of suppliers, like GoSimpleVAT.
Why is it important to follow VAT for MTD?
It’s a good idea to submit your VAT digitally, whether or not you’re legally obliged to. As well as avoiding potential penalisations later on, it offers a number of benefits.
If your turnover doesn’t currently exceed the VAT threshold, you could voluntarily register anyway and choose to file returns digitally.
On top of this, whilst you may not need to submit electronically right now, you might have to do so for other tax returns in the future. There are plans for both Income and Corporation Tax to be brought into the new digital age, potentially from as early as 2021.
Making Tax Digital advantages
Along with getting ahead, you may also take this as an opportunity to review and potentially streamline your accounting. This will minimise the time spent on your VAT returns, making all processes significantly more efficient and simpler.
You’ll find it easier to keep on top of your record-keeping, giving you a better picture of your finances. You can then understand how you’re performing and make data-driven decisions based on this.
Staying on top of MTD for VAT
So long as you choose compatible tools, and also submit your VAT returns on time, then you’ll be able to maintain HMRC’s digital path compliantly and with ease. Make sure you know when your first quarterly period was from 1st April 2019, and the deadline to file digitally by.
As spreadsheets are so simple and offer numerous benefits, using bridging software like GoSimpleVAT is ideal. It’ll help you avoid any penalties and take advantage of the digitalisation of tax.
Our tools digitally link to HMRC so you can submit MTD for VAT returns. You can also import your reports from any spreadsheet or PDF, and we provide peace of mind with our industry-leading data security.
There are easy-to-understand dashboards too, and our software can be accessed from your mobile. Discover more about GoSimpleVAT by getting in touch with our team today.
Last updated on 25th July 2019.
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
Creating An Invoice: A Guide For Beginners
03 Jan 2021
2021: The Year To Switch To Real-Time Record-Keeping
02 Jan 2021
Paying Tax For Freelancers And The Self-Employed Explained
20 Dec 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."