Foxley Kingham

Foxley Kingham Medical

FoxKash

Making Tax Digital Updates

by | Apr 16, 2019 | Accounting, Making tax digital, Uncategorized

There’s been a lot of MTD activity since our last edition. By now all clients with VAT-able turnover above £85,000 and who must abide by MTD regulations this year should have been contacted by us. If you believe that you should be adhering to MTD and you haven’t yet heard from one of our team, please get in touch.

We are busy upgrading clients with SAGE to the latest version and migrating those on manual records to Xero or SAGE Online to ensure they will be compliant. This will continue over the next few months. We will then make arrangements with clients who will be affected by MTD in the future.

New for Spring

The government used the Spring Statement on 13 March 2019 to confirm two things about the timing of Making Tax Digital (MTD):

  • MTD for VAT will go ahead as planned from April 2019.
  • MTD will not be made mandatory for any other taxes or businesses in 2020.

The confirmation from the chancellor that MTD will not be mandated for income or corporation tax, and that MTD for VAT will not be extended to all VAT-registered businesses until at least 2021, will reassure agents and businesses. It will also allow time for a more measured approach to implementation, additional testing, and the delivery of EU exit responsibilities.

MTD IMPORTANT INFO

  • If your turnover is below £85,000pa on 1 April 2019 but exceeds it in later months, you must follow the MTD rules from your next return period.
  • If your turnover drops below £85,000pa after 1 April 2019 you are still required to keep digital records and file VAT returns using compatible software.
  • Deferment: those eligible for a 6-month deferral until October 2019 include trusts, non-corporate notfor-profits, VAT groups, some public sector entities, traders based overseas, those making payments on account and annual accounting scheme users.
  • Compatible software can comprise a number of programmes if they are digitally linked. For example, your sales information may be kept in one software programme and your VAT records are maintained and submitted through another software programme (e.g. Xero).
  • Accepted digital links include CSV exports and imports, as well as XML files and API transfers, the important thing is that the records should not be manually altered. A ‘soft landing’ is in place for the first year before digital links become mandatory.
  • Calculations can be made outside the software, for example partial exemptions, but must be input into the compliant software.

There has also been clarification of what records must be kept, how to deal with mixed rate supplies, or use of agents, special schemes such as flat rate, retail or margin schemes. For more information, please contact us: The Making Tax Digital Team.