Changes to Making Tax Digital
VAT Soft Landing Period Ends 1st April 2021
Changes to Making Tax Digital commenced on 1st April 2019. This is a requirement for businesses to keep digital VAT records. From this date until 31st March 2021 the VAT office allowed a transition period for businesses to put these digital links in place. This means that all parts of there are accounting software need to be connected together.
Have you now got this in place? If not, you do need to act before the 31st March. The system has to be one that the VAT office will accept.
The new rule has the force of law:
A digital link is an electronic or digital transfer, or exchange of data, between software programs, products, or applications.
The use of ‘cut and paste’ or ‘copy and paste’ does not constitute a digital link. There is an exception during the soft-landing period as set out in paragraph 3 of the next ‘force of law’.
For VAT periods starting on or after 1 April 2021 your systems must use digital links. This is required for any transfer or exchange of data between software programs, products or applications used as functional compatible software. This is stipulated in the legislation.
Therefore, VAT quarters from 30th June onwards must have a digital means of transfer.
Changes to Making Tax Digital- What does this mean for me.
If you currently use an excel spreadsheet for submission, this is still an acceptable method of submission. If you are providing your accountant with a transaction list in any other format such as:
- Handwritten paper
- Pdf’s
- Word processing documents
- Verbal
This is no longer acceptable. The information must be provided in a digital spreadsheet.
You will need to either start using a spreadsheet to record the data. Or better still implement a full digital bookkeeping system that records all your transactions.
This latter option will give your business more flexibility. This will also mean that when the next stage of MTD is implemented you will be ready to go with accounts data submission.
How we can help
We can offer clients reduced price licenses on digital software like
- QuickBooks
- Xero
- Sage online
We can help you set up the system.
We can provide training
Or even complete the book-keeping for you.
Let us know what you prefer, and we will provide a quote.
If you are not yet ready to go to full digital records, then you will need to look at maintaining a Microsoft Excel spreadsheet which we can supply to you. This spreadsheet will link to our online system for submission of the return data. If you would like a copy of the spreadsheet please send us an email.
The full details on the legislation can be found https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat
For more details please contact us on 01942322767 or email info@mcgintydemack.co.uk
