Making Tax Digital (MTD) is now a requirement by HMRC. To help you with the new way of digitally submitting VAT returns, we’ve compiled a list of questions you might be asking. Here is a quick recap on MTD.
Since 1 April 2019, all VAT-registered businesses with a taxable turnover above the VAT threshold of £85,000 are now required to submit their VAT returns using an approved app.
Essentially, MTD for VAT means businesses must now use accounting software that can connect to HMRC when it comes to filing a VAT return. You can download our free guide for further insight into this transformed tax system.
How Do I Submit a Digital VAT Return?
In order to submit a digital VAT return, your business must have registered with HMRC for the service before your VAT return deadline. Keep in mind that your business isn’t enrolled automatically, even though MTD for VAT is now mandatory.
As always, you can keep up to date with the latest MTD and VAT information over at the official government website.
Are the Deadlines for VAT Submissions Still the Same?
After the MTD cut off, the payment deadlines and schedule businesses have to file VAT returns will remain the same. The same applies to monthly, quarterly and annual VAT return schemes.
You’ll continue to make amends on VAT returns on the next quarter’s VAT return or by writing to HMRC. You can learn more about submitting a VAT return here.
Lenient With Penalties for Soft Landing Period
A “soft landing” period is in effect between 1 April 2019 and 1 April 2020. HMRC has also stated that it will be lenient with penalties during this time if businesses have made significant efforts to comply with MTD for VAT.
Can I Carry on Using Spreadsheets for My VAT Accounts?
The government has said that spreadsheets can temporarily remain a part of digital record-keeping under Making Tax Digital.
However, from 31 March 2020, only digitally integrated spreadsheets will be allowed.
What MTD Software Solutions Are Available?
From keeping more accurate records to time-saving processes and no last-minute scrambling to file yearly tax returns, MTD has revolutionised businesses of every size and sector. But you must find the right software for you and your requirements.
HMRC has a list of compatible software you can use to submit your VAT Return. Make sure to explore your options and find the best fit.
What Features Should I Look for in an Accounting App?
There are many small business expense tracking apps on the market and they'll all claim to be the right one for you. But how can you tell which one is the best for your business?
- No jargon, easy-to-understand plain English.
- The ability to set recurring transactions to save time.
- Keep track of multiple businesses from one unified system.
Does the app have a good reputation online? Do they also have an expert team on-hand to help you with any challenges you might face? Taking a look at online reviews can show you how other businesses find the functionality and level of support.
You can learn more about choosing a small business expense tracking app in this blog here. However, you can start by testing out one explicitly made with small businesses and self-employed individuals in mind.
Submit a Digital VAT Return With a User-Friendly MTD-Compatible App
EasyBooks offers a 14-day free trial with no commitments, with features designed to make the transition to digital tax simpler. You can see how we measure up against other apps on the market here.
Making the transition has never been more straightforward with a user-friendly application in your back pocket.