Stephensosn Smart: Making Tax Digital

Specialism: Making Tax Digital

  • From 1st April 2019 businesses with taxable turnover above the £85,000 VAT threshold are required to:
    a) maintain their accounting records digitally in a software product or spreadsheet, and
    b) submit their VAT returns to HMRC using functional compatible software approved by HMRC.Maintaining purely paper records will no longer meet the legal requirements of the tax legislation.
  • The requirements do not apply to business who are not VAT registered, or who are registered, but have taxable turnover below the VAT threshold.
    Although voluntary registered businesses can opt into the scheme if they wish.

There are no changes being made to:
a) VAT rules other than those that relate to record keeping and filing.
b) the amount of information submitted to HMRC. Remains the 9 boxes.
c) the current filing and payment deadlines.

When does it start?

Businesses and organisations within MTD must keep digital records and submit VAT returns using functional compatible software from the start of their first VAT return period beginning on or after 1st April 2019.

The relevant dates for businesses that file quarterly are:

FIRST MANDATORY MTD VAT RETURN PERIOD DIGITAL ACCOUNTING RECORDS MUST BE KEPT FROM DEADLINE FOR FILING FIRST MANDATORY MTD VAT RETURN
1 April 2019 – 30 June 2019 1 April 2019 7 August 2019
1 May 2019 – 31 July 2019 1 May 2019 7 September 2019
1 June 2019 – 31 August 2019 1 June 2019 7 October 2019

 

For monthly returns this is:

1 April 2019 – 30 April 2019 1 April 2019 7 June 2019

 

Digital record keeping requirements

The requirement to keep digital records does not mean that businesses have to scan and store invoices and receipts digitally. Businesses can continue to keep documents in paper form if they prefer, but each individual transaction (not summaries) will need to be recorded and stored digitally. HMRC encourage records to be kept in as near to real time as possible, but it is still possible to create digital records at quarterly intervals, using a bookkeeper or other agent if required, provided the information is entered into a digital record keeping system at that stage.

Need to register for MTD

Each business must register online prior to submitting their first MTD VAT return.

Registration takes places on the HMRC website with a confirmation email being sent out within 72 hours of signing up. It is not possible to submit the MTD VAT return until this confirmation email is received.

Window for registration in order to maintain direct debit mandate:

VAT period First available date Last available date
1 April 2019 – 30 April 2019 15th May 2019 31st May 2019
1 April 2019 – 30 June 2019 15th May 2019 31st July 2019
1 May 2019 – 31 July 2019 17th June 2019 30th August 2019
1 June 2019 – 31 August 2019 15th July 2019 27th September 2019

 

Get in touch

Contact Stephenson Smart today if you need any assistance with Making Tax Digital.

  • From 1st April 2019 businesses with taxable turnover above the £85,000 VAT threshold are required to:
    a) maintain their accounting records digitally in a software product or spreadsheet, and
    b) submit their VAT returns to HMRC using functional compatible software approved by HMRC.Maintaining purely paper records will no longer meet the legal requirements of the tax legislation.
  • The requirements do not apply to business who are not VAT registered, or who are registered, but have taxable turnover below the VAT threshold.
    Although voluntary registered businesses can opt into the scheme if they wish.

There are no changes being made to:
a) VAT rules other than those that relate to record keeping and filing.
b) the amount of information submitted to HMRC. Remains the 9 boxes.
c) the current filing and payment deadlines.

When does it start?

Businesses and organisations within MTD must keep digital records and submit VAT returns using functional compatible software from the start of their first VAT return period beginning on or after 1st April 2019.

The relevant dates for businesses that file quarterly are:

FIRST MANDATORY MTD VAT RETURN PERIOD DIGITAL ACCOUNTING RECORDS MUST BE KEPT FROM DEADLINE FOR FILING FIRST MANDATORY MTD VAT RETURN
1 April 2019 – 30 June 2019 1 April 2019 7 August 2019
1 May 2019 – 31 July 2019 1 May 2019 7 September 2019
1 June 2019 – 31 August 2019 1 June 2019 7 October 2019

 

For monthly returns this is:

1 April 2019 – 30 April 2019 1 April 2019 7 June 2019

 

Digital record keeping requirements

The requirement to keep digital records does not mean that businesses have to scan and store invoices and receipts digitally. Businesses can continue to keep documents in paper form if they prefer, but each individual transaction (not summaries) will need to be recorded and stored digitally. HMRC encourage records to be kept in as near to real time as possible, but it is still possible to create digital records at quarterly intervals, using a bookkeeper or other agent if required, provided the information is entered into a digital record keeping system at that stage.

Need to register for MTD

Each business must register online prior to submitting their first MTD VAT return.

Registration takes places on the HMRC website with a confirmation email being sent out within 72 hours of signing up. It is not possible to submit the MTD VAT return until this confirmation email is received.

Window for registration in order to maintain direct debit mandate:

VAT period First available date Last available date
1 April 2019 – 30 April 2019 15th May 2019 31st May 2019
1 April 2019 – 30 June 2019 15th May 2019 31st July 2019
1 May 2019 – 31 July 2019 17th June 2019 30th August 2019
1 June 2019 – 31 August 2019 15th July 2019 27th September 2019

 

Get in touch

Contact Stephenson Smart today if you need any assistance with Making Tax Digital.

Stephensosn Smart: Making Tax Digital

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E:   march@stephenson-smart.com

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