From 1st April 2019 businesses in the UK who are over the VAT threshold (currently turnover greater than £85,000) will be required to use the new HMRC Making Tax Digital (MTD) service to submit their VAT returns.
This means that new rules must be followed and manual entry of VAT return information on the Government Gateway will no longer be accepted for returns after this date.
HMRC are introducing MTD initially in order for VAT records to be kept digitally for direct submission of VAT returns, thus reducing errors from manual transposition of values and making returns more efficient and accurate. These digital records must be preserved for up to 6 years.
What does this mean for your business and what will you need to do? MTD requires businesses to:
keep digital VAT records
sign up for MTD with HMRC
submit VAT returns from 1st April 2019 electronically using software compatible with MTD
Businesses who already use accounting software for their financial records will need to check that their software is compatible with MTD in order to comply with the new VAT rules, or alternatively consider changing to software which already meets MTD requirements.
More information on MTD is available from HMRC.
MTD VAT Returns with Greentree
Greentree is ready for MTD from version 2018.3.0. Financial transactions are posted completely as normal on a daily basis, then when you are ready to process your VAT return you simply run the VAT return report for the relevant period, check the figures, then when you are ready you simply submit this information electronically to HMRC.