Making Tax Digital for Vat is live, so what now?
The general position is that businesses need to sign up in time to submit their first return that is due under MTD. This should be after they have submitted their final return using the old system as once they have signed up to MTD they will no longer be able to file returns using the old method. For most businesses the first return affected by MTD is the one that starts on/after 1 April 2019.
So although MTD went live in April, the first quarterly MTD for VAT filings are due from 1 July 2019.
In the first year of mandatory reporting, HMRC has confirmed that it will take a soft penalty approach and importantly companies will be able use a 'cut and paste' approach during the one-year soft landing before companies need to use digital links.
This means that for the first year of mandation businesses will not be required to have digital links between software programs when VAT reporting between subsidiaries and head office.
The one-year soft landing period will be in place until at least April 2020, depending on the classification of the business, giving organisations time to implement a system of digital links between all parts of their functional compatible software, for example where a company has a number of subsidiary companies with separate finance functions and departments.
Bearing in mind the above it is important to get the timing right for when you register. HMRC systems are notorious for managing to make a simple process complicated and this will no doubt prove to be the same come 1st July. As it takes up to 72 hours for sign up to be completed and those that pay by DD cannot sign up in the 7 working days leading up to, or 5 working days after, their filing deadline.
If you have any questions please contact us either by phone 02920 860140 or via email: firstname.lastname@example.org