Making Tax Digital

Making Tax Digital for VAT (MTDfV) introduces new digital filing and record keeping requirements for VAT registered organisations.

If you are registered for VAT and your taxable turnover is above the VAT registration threshold (currently £85,000), for accounting periods starting on or after 1 April 2019, you must:

  • Keep digital business records
  • Send your VAT returns to HMRC using MTD-compatible software (Application Programming Interface)

Digital links and digital records

We have been working hard in the background on Making Tax Digital to ensure our processes for the preparation of VAT returns are compliant with the ‘digital links’ as specified in the Making Tax Digital legislation. As shared in our VAT Newsletter, we are delighted to confirm that HMRC have now agreed our processes as Making Tax Digital compliant in terms of the requirement to keep certain VAT records in digital form. You will however still need to ensure you are able to submit VAT returns via an Application Programming Interface (‘API’) for 1 April 2019 (or following the deferral period if you are a GIANT user).

Given our intrinsic part within our clients finance and accounting functions, we understand the importance of assisting NHS bodies and socials to comply with Making Tax Digital. It is for this reason that we have engaged directly with HMRC’s policy team to gain sign off for the preparation of SBS VAT returns in light of Making Tax Digital. In August 2018, we held a teleconference with HMRC’s policy team whereby we submitted and talked through documents that fully outlined the SBS processes for creating VAT returns. We are delighted to announce that having reviewed the documentation in full, HMRC have signed off the ‘digital journey’ to the VAT return for SBS clients. See below extract from the HMRC written minutes:

“NHS SBS had submitted a narrative and illustrations of its VAT data journey to HMRC, and was seeking advice as to whether this current process would be MTD compliant from April 2019. On review, HMRC was confident that the journey as laid out would be MTD compliant.”

This of course accounts for the fact that VAT returns will be submitted via an API.

Interaction with third party advisors

HMRC have stressed the importance of interaction with third party advisors and emphasised the requirement for third party reviewers to be aware of the rules regarding Making Tax Digital. As of April 2020, third party reviewers should not cut/copy and paste from their own files into the SBS provided third party review schedules. To ensure continued compliance with Making Tax Digital, we would advise NHS organisations mandate the requirement for third party review schedules to be completed and returned in the prescribed format as soon as possible.

Send your VAT returns to HMRC using MTD-compatible software

Our bridging software ‘VAT E-File Online’ is now finalised and ready to be used by organisations, payable via a licence fee.

Click the below image to see our video highlighting how the ‘VAT E-File Online’ works and how easy it is to submit your VAT 100 using the software.

The solution allows for the submission and retrieval of the VAT 100 (and will allow for submission of the VAT 21, should that be mandated) via a cloud based portal. In addition to this, the portal allows the user to view past and upcoming obligations, view trends of VAT return data and retrieve previous payments and liabilities. As the solution is cloud hosted, there is requirement for any hardware or software installation.

Making Tax Digital Video

Video highlighting how the ‘VAT E-File Online‘ works and highlights how easy it is to submit your VAT 100 using the software:

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