Making Tax Digital - 2019 - Don't Leave It Too Late to Act

I know it's far away, but in accounting terms it's closer than you think it is. Making Tax Digital (MTD) comes first to VAT April 2019.  It requires eligible taxpayers to record and transmit their sales and purchase data to HMRC electronically, via what HMRC call an API (Application Programme Interface).  This equates to an automated data submission process actioned by your accounting software. If you are still using Excel spreadsheets or paper records, then you need to consider updating your accounting systems to meet the digital requirements of Making Tax Digital. You can still use Excel spreadsheets but there should be a digital link to the API software that ultimately submits your VAT return. Logging onto the HMRC website to file your VAT return will cease from April 2019, the submission process must be digital.

Time to Plan Now for Next Year

This is why 2019 is not that far away, your business lives and breathes by its accounts and transferring to a new system or just updating an older system, can be a cost and time burden for your business. HMRC continue to develop guidance (with some details still awaiting clarification), but the flavour of what will be required is quite clear.  It may take many months to choose an appropriate software package or to re-engineering your existing paper based record keeping.  Do you want to start using the software from April 2019/new financial year or introduce it early to bed in the systems and deal with errors/problems that may arise? Whilst it will, in time, make the preparation and submission of the VAT return much simpler, in the short-term, it could be quite disruptive for the business. in the short to medium term, it will also mean your business needs to ensure it is submitting accurate VAT returns, which means ensuring the data in the system is correct. Don’t leave this to chance, so speak to your advisors or speak to us, our VAT advice is not as expensive as you think.