February 19, 2019
Making Tax Digital, or just MTD, is a UK government initiative for businesses and individuals to keep digital records and make tax returns and payments online. In less than two months, on April 1st 2019, VAT registered businesses with a turnover in excess of £85,000 will have to keep their VAT records digitally. They will also need to submit their VAT returns online via HMRC-approved MTD-compatible software.
Currently, 71 percent of businesses type their VAT figures onto HMRC’s website. Businesses need to be aware that HMRC will not be offering their own in-house software for this, thus businesses will have to rely on software solutions that are currently on the market.
Organisations with more complex requirements such as non-profits will not have to be MTD compliant until October 1st 2019. Here is a list of businesses to whom the October 1st deadline will apply:
According to Certax Accounting, HMRC has confirmed that a ‘No Deal Brexit’ will not affect the April 1st roll out of MTD for VAT. Experts had previously suggested that HMRC would have to delay the introduction of MTD for VAT if the UK was to leave the EU without a Brexit deal.
However, Jim Harra, Deputy Chief Executive of HMRC, recently wrote: 'Our system is already live and by the end of February we'll have written to every affected business, encouraging them to join the thousands of others who have registered.' HMRC aims to become one of the most advanced tax authorities in the world by improving the customer experience whilst closing the tax gap.
HMRC has published its guidelines for UK companies, which will either sell to EU registered firms and/or buy from EU registered firms, after March 29th 2019 following a ‘No Deal Brexit’ scenario. In a ‘No Deal Brexit’ scenario the UK will be considered a third country and free movement of goods between EU Member States and the UK will no longer apply. After March 29th, 2019, UK companies will be liable to pay VAT and customs duties on all imports and exports of goods with the remaining EU Member States.
With multi-currency functionality, HansaWorld’s Standard ERP solution is able to handle the majority of VAT scenarios that may arise after March 29th 2019 for small, medium and large companies. Standard ERP and Standard Accounts are both fully MTD-compliant, HMRC-approved and ready to be linked to your government gateway account for digital tax returns.
Our software will not only help businesses with online tax returns and saving time but will also help to manage finances and cashflow. With Standard ERP businesses can issue invoices in seconds and record the related contact history with its integrated CRM module.
For smaller business owners and start-ups Standard Accounts also supports HMRC online tax returns and many more benefits such as easy invoice management, reporting and flexibility in working on the go.
For further information on how HansaWorld can help your business with your VAT and MTD requirements or choosing the correct ERP and accounting software please read our white paper user guide Making Tax Digital with Standard ERP. Alternatively, contact one of our local partners today.