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Making Tax Digital (MTD) is a government initiative to update how HMRC collects and processes agents and tax payers data, transforming from paper and online to digital. The primary aim of MTD is to make filing returns easier by utilising data already held by HMRC/tax payer/agent and making this a more efficient process.
MTD for VAT, is a government focus on how it handles the data coming in from VAT returns.
The current minimum requirements for submitting a VAT return to HMRC are:
So far the deadlines are:
Companies (including sole traders) whose turnover is below £85k registration threshold can carry on submitting their VAT returns using the online portal. They can also voluntarily submit their returns using the new MTD system.
Companies with more complicated VAT requirements are being deferred for MTD until October 2019 while further testing of software is undertaken. These are companies that fall into the following categorises are:
If you do not currently own MTD capable software then please get in touch with your usual LB Group representative who will be able to offer you specific advice about your particular situation.
The government has recently released further details on when to sign up to MTD, please see below specific dates.
When you sign into your government gateway there is now a warning message about signing up to ‘Submit your VAT return using Software’ and a link for how to sign up. You will need your company UTR and number. Your Company UTR can be found on a recent Corporation Tax return document and your company number can be found by searching for this on Companies House.
Once signed up, you are then required to authenticate your software with HMRC in order to submit the VAT return, the exact instructions for this will depend on the software you use.
Once signed up you have to continue submitting the VAT return in this way.
IMPORTANT: If you do not have MTD compatible software, then do not sign up, as once signed up, you will no longer be able to submit your return through the government gateway.
It can take up to 3 days to receive a confirmation email that you have successfully transferred to the new MTD system, therefore this has to be done 3 days before the VAT return submission due date at the latest.
Do not submit a VAT return until the confirmation email is received.
You must also wait until after the submission period for the last VAT return has passed so that you sign up for the correct quarter.
If you have signed up to direct debits with HMRC, then there is a specified window for when the direct debit information will also be transferred to the new MTD system. If you sign up outside of this period then you will need to arrange to make the payment manually.
You should allow 15 working days for this information to be transferred, but also wait 5 working days after the previous VAT return submission due date. Please see below for the specified windows for each VAT return quarter/month.
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