Making Tax Digital for VAT
Making Tax Digital (MTD) is the government’s programme to improve record keeping by making all records digital - ie on computer (though the individual invoices and receipts themselves can still be paper). After a couple of false starts, which caused a lot of confusion, the first Tax to which MTD is to be applied is VAT. We are advised that other taxes are to follow in the coming years.
Under Making Tax Digital you can no longer type your VAT Return figures into the HMRC portal. From now on, your VAT return must be submitted to HMRC digitally - ie by computer. That means, if you keep your accounts on spreadsheet, you will need to submit your VAT Return via Bridging Software.
Sounds complex, but it isn’t. Just plug The Tax Kit Bridging Tool into your accounts spreadsheet, link the relevant cells and submit your VAT return in compliance with MTD. It’s as simple as that. All that is required is a little work to register for MTD for VAT with HMRC and register with our application - and you’re good to go.
But what if you have to make calculations or adjustments?
- If you need to make an adjustment
- If you need to make an entry into Box 2 of the VAT Return for the calculation of UK VAT on EC Purchases
- If you’re registered on the Flat Rate scheme
If you have to calculate a value for entry into your VAT Return, you must do that calculation in your spreadsheet and link the resulting figure into the relevant box in the VAT Return Bridging Tool that you have integrated into your accounts spreadsheet. Under MTD you cannot type any numbers into the VAT Return or Bridging Tool, but you can type into your underlying spreadsheet that feeds through to the VAT Return.
Flat Rate Scheme
So, if you’re registered on the Flat Rate Scheme, your calculation and any adjustments required must be made on your spreadsheet and then linked to the relevant boxes in the VAT Return Bridging Tool.
Are you VAT Registered? Here's some important information relating to the new VAT regulations – please watch HMRC's simple video on how to register:
7th August 2019 is the first quarterly MTD (Making Tax Digital) VAT filing deadline (This is for June quarter VAT returns).
Further guidance relating to registering for MTD for VAT can be found following this link:
You can register for MTD VAT here:
You need to ensure that your Making Tax Digital registration is made at least a week before your next VAT filing deadline, and not before any direct debit has been taken out of the bank account for an old style non-Making Tax Digital VAT Return.
If you trade through a company or partnership, insert the UTR of the company or partnership, do not your personal UTR.
Your making tax digital registration is only complete if you have received an e-mail from HM Revenue & Customs letting you know the registration is complete. You should receive this e-mail approximately 3 days after making the application. If you do not receive it, please contact HMRC.
We’ve provided some simple guidance and useful links as an introduction to help you. However, this guidance and links are not comprehensive and the VAT regulations are complex. For a full understanding of the rules, please refer to HMRC guidance on their website or discuss with your accountant how the rules apply to your specific circumstances. Please bear in mind that responsibility for the accuracy of your tax affairs remains with you, the taxable person.
Last updated on: 12-Mar-2020