Grant Thornton Cardiff is making Welsh companies aware that very few businesses will be exempt from the requirements of Making Tax Digital (“MTD”) and it is important that businesses make the changes required to enable them to file VAT returns digitally from 1 April 2019. In addition, because HMRC may have greater visibility of the data being submitted, particularly where spreadsheets are used, the integrity of the underlying data would need to be reviewed to reduce the possibility of errors.
Following the Government’s announcement that all VAT registered taxpayers with income over the VAT Registration threshold, currently £85,000, will be required to submit their VAT returns digitally from 1 April 2019, this means businesses will need to file their returns directly from accounting software via Application Program Interface (“API”). Whilst 95% of VAT registered businesses currently submit the VAT return figures electronically by typing the figures onto their HMRC VAT portal, only 12% submit their VAT return figures digitally via their accounting software. Those businesses that keep their accounting records on spreadsheets will need to be able to link to HMRC’s system via API links.
Grant Thornton have put together a “MTD” readiness service, which includes: testing of the integrity of data, understanding the VAT adjustments made by the business, a system review and helping clients to make the necessary changes in order to submit the VAT returns to HMRC via API.
Kaye Morris, Senior Manager Tax in Grant Thornton Cardiff told us;
‘There has been very little coverage of the Government’s “MTD” strategy in the press, but it is going ahead for VAT accounting in 2019. Whilst this may seem some way off, there are requirements that will change the way that businesses will submit their VAT returns, including the ability to file the return straight from accounting software or spreadsheets. Whilst many businesses submit their VAT return by completing the template on the HMRC filing portal this facility will be removed for the majority of taxpayers. We are aware that the implications of this may not being fully understood by many of the businesses affected.’
Grant Thornton have produced a brief sheet for those businesses wishing to find out more and a copy can be obtained here.