In just under a year VAT registered UK businesses will be required to keep their records digitally.
The government has called this change Making Tax Digital: it’s a way of moving systems to become more online based.
This will apply to any business that is above the VAT threshold. They’ll be required to submit their VAT returns to HMRC using software that is MTD approved.
Despite delays and the impending nature of this legislation, there is still little clarity over what software businesses like this will need.
So, we’re going to attempt to bring some clarity to it…
“What Do I Need To Know About MTD?”
HMRC have confirmed that some of Making Tax Digital will officially come into play in April 2019, specifically the VAT part.
Other changes have been put on hold until April 2020 at the earliest.
The software that we at DH Business Support use for all of our clients is called Xero.
Xero is already ahead of the game when it comes to MTD and they’ve recently confirmed on their website that they have built a new ‘workflow experience’ to support the changes that MTD will incur.
This is currently being tested behind closed doors with HMRC but they’ve stated that it will be opened up to a select amount of users to test over the summer.
Is Xero Approved By HMRC As MTD Software Yet?
As of now, there isn’t anyone who is officially approved. HMRC haven’t put together the list yet. But when they do, you can expect HMRC to publish Xero’s name as approved.
When all testing has taken place and the software is approved, Xero will be added to the MTD VAT approved software list later this year.
Will There Be Any Changes within Xero?
Currently, users choose dates for a VAT return, whereas in the new system HMRC will provide the information directly into the software.
It’s worth noting that the VAT return process will remain the same.
What Should You Do If MTD Will Affect You?
If you’re one of our clients, or on Xero, that’s great! You don’t need to do anything right now.
All Xero’s subscriptions supporting VAT return submissions will be automatically updated for MTD when the time comes, which is a relief to many.
However, if you aren’t using Xero, then we’ve created a form at the bottom of this page for you.
If you fill it out, one of our team will be in touch and help talk you through any changes your business will need to make for MTD, and a possible switch to Xero.
Get The Latest MTD Information
Interested In Finding Out More About MTD?
Get In Touch Below