THE TIME IS NOW.. GET IN FRONT OF THE PACK AND LEVERAGE THE OPPORTUNITY

Getting digital ready - Making Tax Digital (MTD) and beyond

April 2019 is not far away when we consider the magnitude of change that is afoot when working with HRMC, and this will be just the beginning when it comes to digital transformation. 

Current practices that have clients over the £85K VAT threshold need an automated mechanism to submit VAT information per client to HRMC, via a new VAT API interface. Existing book-keeping technologies need to be explored for their applicability to do this or, specialised bridging software needs to be applied to existing Excel Client Book-Keeping. Whichever approach is taken, existing processes will need to change and accountants supporting VAT submissions will need new ‘data skills’, or a new ’functional compatible software’. This is to support the proposed bridging approach, to be able to issue VAT updates quarterly to HMRC in an auditable manner.

The new digital VAT return procedure will still have nine boxes for completion, but these figures will be provided with supplementary information providing a summary to HMRC of the cost-types incurred during the current period.

The current requirements

The use of spreadsheets in April 2019 will be permitted, although this will need to be integrated with HMRC MTD APIs with proven automated flow of submissions between accountant and HMRC systems.

HMRC’s requirement to keep digital records does not mean invoices and receipts need to be stored digitally at this stage. The current data that needs to kept digitally as a minimum requirement is:

  • Business Name, Business Address, VAT Registration Number, VAT Accounting Scheme (Flat Rate etc)

For each transaction involving VAT:

  • The time of the supply, value of the supply, rate of VAT charged

In total for the VAT Account

  • The output tax you owe on sales, owe of acquisitions, tax required to be paid, corrections, adjustments required by VAT Rules
  • The input tax you are entitled to claim from business purchase, claim on acquisitions, tax to be claimed, corrections and adjustments.

The opportunity

There are a multitude of gains to be made and the firms who are seeing this as opportunity rather than threat are open to making a real impact on their bottom line, customer satisfaction, and back office efficiency.

Don't wait to be forced to act, take charge of your practice and competitive edge.

How to get there 

HMRC’s Making Tax Digital requirement will mean existing processes need to change and, all accountants supporting VAT submissions will need new ‘data skills’ or new ’functional compatible software.’ 

We can help you with your preparations by conducting a readiness assessment in the following stages:

  1. Analyse the current client book-keeping approaches
  2. Consider how to combine the data from each approach into a single database 
  3. Provide the roadmap to submit VAT returns via the same process into HMRC
  4. Produce a means to audit that what was sent was received successfully.
Livechat