What are the requirements of Making Tax Digital?
Making Tax Digital for VAT requires VAT registered businesses with taxable turnover above the VAT registration threshold to keep records in digital form and file their VAT Returns using the software.
Can Spreadsheets be used at all?
Only API enabled spreadsheets could be used to make VAT filing.
What software could be used?
Software compliant with HMRC API could be used to keep digital records.
Are there any exemptions?
You will not have to follow the Making Tax Digital rules where HMRC is satisfied that:
- your business is run entirely by practicing members of a religious society whose beliefs are incompatible with the requirements of the regulations (for example, those religious beliefs prevent them from using computers)
- it is not reasonably practicable for you to use digital tools to keep your business records or submit your returns, for reasons of age, disability, remoteness of location or for any other reason
- you are subject to an insolvency procedure
These may apply even if you are not currently exempt from online filing for VAT.
If you think any of these apply to you then contact the VAT Helpline to discuss alternative arrangements. If HMRC considers that an exemption is not appropriate, digital assistance may be available to help you get online support.
What are the timelines for Making Tax Digital rules?
The Making Tax Digital rules apply from your first VAT period starting on or after 1 April 2019. A ‘VAT period’ is the inclusive dates covered by your VAT Return.
Example 1 – Existing business with taxable turnover above the VAT registration threshold on 1 April 2019
A business submits a quarterly return covering the period 1 March to 31 May 2019. The business taxable turnover exceeds the VAT registration threshold and therefore the business will need to comply with Making Tax Digital rules for the period starting 1 June 2019.
Example 2 – Business with a taxable turnover above the Making Tax Digital threshold at the point they need to register for VAT
A business that is not registered for VAT is required to register from September 2019 because the taxable turnover over the previous 12 months has exceeded the VAT registration threshold. The business must follow the rules in this notice for all VAT Returns they are subsequently required to make as their taxable turnover was above the VAT threshold when they were required to register.
Example 3 – VAT registered business with taxable turnover below Making Tax Digital threshold until November 2019
A business is registered for VAT but its taxable turnover is below the VAT registration threshold until November 2019. The business must follow the rules in this notice for any VAT period that starts on or after 1 December 2019 as its taxable turnover now exceeds the VAT registration threshold.
Is there a list of approved software providers?
HMRC has recently published following list of software suppliers but they are still updating the list. Please see the following link for the updated list.
- Absolute Accounting Software Ltd
- Accentra Primo Umbrella
- Access Group
- Accounting Office Software Ltd
- Acorah Software Products Ltd (TaxCalc)
- Advanced Computer Software Group Limited
- Anagram Systems
- Arkk Solutions
- Bridge Squared
- Capium Limited
- Cirrostratus – Exedra
- Clear Books plc
- Croft Computer Systems
- DC Software
- Deloitte LLP
- DTracks Limited
- Easy Books
- Essentia Global Services
- Exel Computer Systems plc
- FinanSys Solutions Ltd
- Forbes Computer Systems
- GoSimple Software
- Grant Thornton UK LLP
- Hartigan Software
- Ibcos Computers Limited
- Integrity Software
- Intuit – QuickBooks
- KAI Consulting
- Landmark Systems Ltd
- Liquid Accounts
- MAM Software Limited
- Motor Trade Technologies Limited
- My Digital Accounts
- Neilson James Technology
- Quickfile Accounting Software
- Rialtas Business Solutions
- Road Tech Computer Systems Ltd
- Ryan Tax Services UK Limited
- Sage (UK) Limited
- SDA Logic Limited
- Simplifi-HQ Limited
- Tax Automation Limited
- Tax Optimiser
- Tax Systems plc – AlphaVAT
- Thomson Reuters – ONESOURCE
- Thomson Reuters – Onvio
- Tyresoft Ltd
- Vertex Global Tax Solutions
- Vital Code Ltd
- Wolters Kluwer
- Zoho Books