Don't Rush to Register for Making Tax Digital
Despite certain VAT registered businesses needing to comply with HMRC's Making Tax Digital from 1 April 2019, many should consider delaying registration
If you're a VAT registered business with an annual taxable turnover of £85,000 or more, you need to register for HMRC's Making Tax Digital (MTD) scheme which replaces their online portal for submitting VAT return figures. But before you do, it may be advisable to wait a while in order to avoid complications for yourself and HMRC.
There's a misconception amongst accountants and tax advisors that businesses eligible for MTD must register before the 1 April 2019. This is untrue for certain circumstances and sign up can be performed at a later date. But what are the advantages of getting into the MTD game after the starting whistle has been blown?
Time to Make Sure You're Ready
If you sign up to Making Tax Digital you will no longer be able to submit VAT returns to HMRC using the online portal. Therefore, if your business (that submits VAT returns on a calendar quarter basis) signs up to MTD today, HMRC will expect the VAT return for the quarter ended 31 March 2019 to be submitted using compliant Making Tax Digital software - not the online portal. If you have not planned for this you could face problems submitting your VAT return or paying the VAT liability on time (or both), and you will need to work with HMRC to resolve things and avoid penalties.
Holding off MTD registration gives you more time to prepare your backend processes, test compliant MTD software and get your staff up to speed on the new process.
MTD Software is in its Infancy
All Making Tax Digital software, whether it is part of an accountacy package or bridging software, has only recently been developed. As you are likely aware, no matter how thoroughly software is tested, it quite often needs a tweak and a fix here and there to get it running as intended. This process normally happens within the first few months following release as users and developers discover issues that slipped through the Q&A net. Problems are compounded by developers needing to use a sandbox environment and data to test their software instead of HMRC's live environment with real VAT figures.
To avoid this pitfall and help ensure you can submit VAT returns sucessfully on time, the first time, it will be prudent to keep an ear to the ground to find out what MTD software is proving its worth and enabling users to submit VAT returns easily and reliably.
One such software application is Easy MTD VAT. Out of the many Making Tax Digital solutions available, Easy MTD VAT is perhaps the most straightforward and cost effective of the bunch. It is installed like any traditional Windows application (i.e. it is not an Excel spreadsheet with MTD capability or an online meachanism or part of an accounting package) and presents an extremely simple mechanism for getting VAT figures to HMRC digitally - no matter how business records are stored.
Easy MTD VAT's interface is intuitive and enables VAT obligations, payment and liabilities to be quickly retrieved from HMRC and viewed without cost. Only when it comes to submitting a VAT return will you need to spend! And with costs starting at just £0.99 per VAT return, getting them submitted to HMRC digitally doesn't break the bank or eat into your profit margins.
Visit easymtdvat.com to learn more and to start submitting VAT returns using Easy MTD VAT today.