UK VAT Compliance - MTD Reminder
Just reviewing actions and the email below from Xero from last November popped up.
It presages changes from 1 April 2021 and a further change in 2022 to Making Tax Digital in the UK (MTD). This is how you are required to submit your UK VAT returns.
It warns of a problem from 1 April 2021 which should have become apparent - digital submissions from non-MTD compliant software will no longer be accepted from 1 April 2021. If you're having problems, we can help with either a short term solution (effectively a patch to keep you going through our own accounting software) or else a longer term solution using our standard MTD software. Just to be clear, we are not a software house, but have accessed tools to use with our work, including some simple software prepared by a user friendly (he speaks in plain English) developer.
The article below doesn't mention that from the same date, information has to be uploaded digitally into your MTD compliant software. Our MTD software provider has an excel template to help us with this, which we've incorporated into our standard data collection form. And, there is also a way of uploading Postponed Import VAT Accounting reports.
From Xero
"It’s been almost two years since HMRC introduced the first phase of Making Tax Digital (MTD) for VAT businesses. We've been working hard to ensure we have the right solutions for you and your clients.
"Filing non-MTD VAT returns from Xero
"HMRC recently announced that non-MTD VAT submissions via software providers will not be supported from April 2021. This means that quarterly VAT periods ending in December 2020, January 2021 or February 2021 will be the last VAT returns you can submit using the old VAT return in Xero.
"How to prepare for this change
"To prepare for this change, you have two options:
- Get your clients registered for MTD VAT with HMRC and get them using MTD VAT in Xero before they are mandated to from April 2022.
- For clients who are not yet ready for MTD, such as those under the threshold or part of a VAT Group, you can generate the VAT amounts using the new non-MTD VAT return in Xero. Please note that you will be required to submit the return manually using HMRC online services or by using MTD bridging software.
"The new non-MTD VAT return in Xero will be available from 23 November 2020 and is ideal if your clients aren't ready to make the move to MTD. It will also be the only non-MTD VAT return option in Xero for new trials and subscriptions moving forward."
I was recently described as a "forward thinking" professional. My response was that I am long enough in the tooth to see where we are going and to identify the fights that don't need to be fought. MTD is one of those fights not to be fought, but instead to do your research and look for solutions that work for you. As with any big changes this required a time investment, as well as a cash one which continues to be reflected as an ongoing compliance cost. HMRC originally tried to say MTD would save businesses money. It does not. Having withdrawn that claim, I see that it has again slipped into their publications - and that is a battle I am happy to take up.
And the VAT Truck - it too should have amendments with added bling in the coming weeks; if it will stop raining!
Steve Botham
www.UKVATAgent.co.uk
3 May 2021