Letters from HMRC are dropping on the door mats of those who are VAT registered explaining that they will have to submit their VAT returns using software that works with Making Tax Digital (MTD) for VAT returns starting on or after 1st April 2019.
It seems that some businesses may be using old and outdated versions of software, such as Sage 50, which may not be Making Tax Digital ready without an upgrade. This could mean a substantial upgrade payment for some businesses.
There is a quick and easy solution to outdated software that isn’t MTD ready.
Use Bridging Software
This links the data from your current system into the new HMRC VAT return Gateway. There are many cheap and easy to use Bridging Software solutions out there. So don’t throw the baby out with the bathwater and do a wholesale systems replacement unless you have another reason to do so.
What is Making Tax Digital (MTD) all about?
- It applies to businesses who are registered for VAT and have a taxable turnover at or above £85,000 being the current VAT registration threshold. If you are VAT registered and your taxable turnover is below £85,000 you do not have to do anything at this time.
- If you fall within that criteria you simply have to supply the same VAT information as you have before (no new data needed whatsoever) via Making Tax Digital ready software for your next VAT return starting on or after 1st April 2019.
- Businesses within the MTD regime will have to file their VAT returns using Making Tax Digital ready software. A list of that software is available at:
There is also a list of suppliers with Making Tax Digital ready software in development at:
- If your current software is not on either list do not panic. You can use what is termed “Making Tax Digital Bridging Software”.
- If you have been keeping manual VAT records and not using a system you will have to get one if you fulfil the criteria as HMRC do want digital records although they are not prescriptive about the format this takes. So it could simply be spreadsheets.