What is MTD?
- MTD stands for Making Tax Digital and represents the HMRC initiative to replace the legacy paper and online forms with an electronic submissions
- It has also been known as MTDfB being Making Tax Digital for Business
- This supports the HMRC Digital Strategy of November 2014 and is detailed in the September 2015 report HMRC third party tax software and application programming interface (API) strategy
Does this include all HMRC transactions?
- No, for April 2019 the only transaction is VAT submissions
- Other transactions are planned for April 2020
When must MTD VAT be implemented?
- HMRC require all VAT registered businesses to submit electronically from 1st April 2019
- UPDATE: House of Lords recommend that MTD is delayed in their November 2018 report
Does Brexit affect MTD?
- MTD for VAT is unlikely to be affected although related operations may be for example EC Sales lists.
Are there options to defer or delay?
- HMRC offer some exceptions for complex businesses (to October 2019) on an exceptional basis
What data will be sent to HMRC through MTD for VAT?
- The information contained inthe 9 boxes required for the current VAT return will be communicated
If I don't have a digital system, can I submit the VAT manually after April 2019?
- No - the data must be stored digitally before being submitted via MTD
Who should I talk to about MTD?
- Contct your tax agent or accountant to discuss your specific requirements and needs
Is HMRC providing software?
- No. HMRC only provides a digital interface to which 3rd party software can connect
When was this announced?
Does HMRC accept other digital transactions?
- Yes, many of the interactions with HMRC can be managed electonically - the full list is here
Who is affected by MTD?
- All VAT-registered businesses with a taxable turnover above the VAT threshold are required to use the Making Tax Digital service
Is MTD in place already?
- Yes - HMRC have operated a limited pilot since April 2018 and a public pilot from October 2018.
What about handover from previous periods?
- Set the start date to the start date of the first period, then if there are older transactions that need to be included, journal them forward in to the date range. You could do this individually or one-to-many using the journal entry form.
- For future periods, any stragglers will be left over.
Can the module be used to send separate VAT returns for a Multi Company setup?
- Yes. In a multi-company set-up, each company would hold it's own configuration parameters (VRN etc) and work independently of any other company sharing the same database for sending their own returns to HMRC
What if submitting my VAT return doesn’t go to plan?
- HMRC can make allowance for some issues and will always expect you to take "reasonable care" over your return. They can impose fines if they consider errors were careless or deliberate. For more information, see https://www.gov.uk/vat-returns/surcharges-and-penalties
How do I fix errors with my submitted return?
- Act quickly, advise HMRC what has gone wrong and work with them to correct it to minimise potential penalties. More information here: https://www.gov.uk/government/publications/vat-notice-70045-how-to-correct-vat-errors-and-make-adjustments-or-claims/vat-notice-70045-how-to-correct-vat-errors-and-make-adjustments-or-claims
Who should I contact at HMRC?
- You can use these links to locate HMRC contact information: