Companies that are VAT-registered and turnover in excess of £85,000 must prepare for the date when VAT returns are to be submitted digitally. Not only must VAT returns and refunds information be submitted digitally but all transfer of data needs to take place on software that is compatible to MTD for VAT.
The date to look out for is April 1, 2019. If you have not done so already: new software must be purchased in time for the April 1 deadline. The actions and submissions of MTD for VAT go live from day 1 (April 1).
A company needs to purchase software that has been approved by HMRC and is fully compliant with the new directive. If the software is called MTD for VAT, then it will be compliant.
Fortunately, the software is very easy to master and happens to be highly intuitive. It is known to be user-friendly and all software packages are available through the cloud. This means authorised personnel can access the data and input relevant entries at any time of the day or night.
All MTD for VAT software systems will have a Control Centre that will highlight the key changes in VAT returns. VAT Returns must be submitted to the HMRC digitally. It must also be submitted through the compatible software.
The Control Centre might look something like this:
- Dashboard Control – This will give you at-a-glance header figures listing key data with one glance.
- Control of Submissions Data – Businesses and Individuals are obligated to pay VAT and to have all the data registered and submitted to HMRC by a specific date (of which you will be forewarned).
- VAT Reports and Graphs – MTD for VAT software should have a Report Centre where you can check refunds and all taxes paid and reclaimed.
- Obligations Dashboard – This is just a timely reminder of the dates when submissions MUST take place. Reminders of how many days to go until VAT returns data will be shown. Furthermore, a list of all receipts that have been submitted for VAT exclusion.
- If you have already been doing VAT returns for years on spreadsheets, Quick Books, Xero, Free Agent or Reckon One, then data transfer to the MTD for VAT digital software will be quick, simple and easy to migrate.
It is envisaged VAT Returns will be faster, simpler and more accurate than the previous methods used. Remember, migration to MTD for VAT is mandatory for businesses with an annual turnover in excess of £85,000.