What is MTD?
MTD is a government initiative requiring all VAT-registered businesses with a taxable turnover above the VAT threshold to use the Making Tax Digital service. This requires businesses to keep records digitally and to use software to submit VAT returns directly to HMRC from periods beginning on or after 01/04/2019.
Do I have to join MTD?
If your turnover has exceeded £85,000 over any 12-month period or you expect to exceed £85,000 of sales in the following 30 days alone, you will need to become MTD compliant. The last 12 months turnover calculation needs to be considered each month and not just now or at your accounting year end.
Do I have the right software / accounting system?
HMRC have published a list of accounting software that is compatible for MTD:
Whatever software you use, we will support you in making sure you can file VAT returns. Remember: just because you use a compatible accounting system does not mean you are MTD compliant. You must also maintain digital records and sign-up online for MTD; Sign up for Making Tax Digital for VAT
Even if you have an MTD compliant accounting package, and you have a HMRC Online account, you still need to register for MTD with HMRC at the following link:
What you’ll need:
- your Government Gateway user ID and password;
- the VAT number of the business that’s signing up;
- appropriate accounting software for managing your VAT records (see above);
- if you have more than one VAT registered business you will need the information for these other businesses;
- Once you have signed up (please note this system will not let you register at busy times e.g. in the run up to VAT return filing deadlines) HMRC will send you a confirmation email within 72 hours. You must not file your VAT return until this deadline.
Authorise your software
One you are registered for MTD you will need to authorise your software within your accounting package. This process varies from package to package so please contact us for assistance if required.