HMRC is issuing an email to 650,000 VAT registered taxpayers to remind businesses that, if applicable, their VAT records should now be kept digitally.
The email has been designed as a means of reaching those who might not already be in the know to ensure that they are made aware of Making Tax Digital for VAT, its introduction in April 19 and to make them consider whether they will need to comply with the requirements of the new regime.
If this applies to your business, you are now required to keep your VAT records digitally and use software that is compatible with MTD to send your VAT returns to us for periods which started on, or after 1 April 2019
The email also contains five helpful top tips “to help you to get ready” which are as follows:
- If you use an accountant or other agent to manage your VAT affairs, they will be aware of MTD and will probably have already started making preparations on your behalf.
- If you already use software to keep your VAT records, speak to your software provider to make sure it is MTD-compatible and find out what you need to do to enable the new features, once you have signed up to MTD.
- If you are not represented by an accountant and/or do not already use software, you will need to look at how to capture your records digitally and select MTD-compatible software to make your VAT return.
- You should sign-up for MTD at least a week before your filing deadline so that you are registered for the new service in good time to submit your return. After signing-up, you will then need to link your software to MTD – a process known as ‘authorising’ the software.
- Lastly, but very importantly, before you sign-up for MTD, make sure you file your last return for the period before you have to join MTD using the old HMRC online service, as once you are signed-up to MTD you will no longer be able to access that service and will need to file all your VAT returns from that point onwards using MTD-compatible software.
HMRC recognise that for some businesses this feels like a significant change so they are taking a light touch approach to penalties in the first year of MTD. Where businesses are doing their best to comply, no filing or record keeping penalties will be issued.
You can get help and support, choose compatible software and use the step by step guide to join MTD. You can also attend an HMRC webinar to find out more.
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