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Intuit
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Making Tax Digital (MTD) - FAQ

What is Making Tax Digital  for VAT?

As part of their Making Tax Digital (MTD) plans to modernise the tax system, the Government is changing the way VAT registered businesses create and submit VAT Returns.

 

What’s changing?

As of April 2019, businesses with a taxable turnover above the VAT threshold of £85,000 are required to file their VAT returns electronically using accounting software, and are obligated to keep digital records of their transactions.

Manual submissions through the HMRC online services for VAT will no longer be accepted for most businesses.

 

What does it mean for businesses?

The new VAT rules apply to most affected businesses from 1 April 2019, and you must:

  • Ensure you have MTD for VAT compliant software.
  • Start maintaining digital business records for the purposes of VAT.
  • Sign up with HMRC for MTD for VAT.
  • Start submitting your VAT Returns through your compliant software.

 

Am I or will I be  impacted by MTD?

If you run a VAT-registered business with a taxable turnover above the VAT registration threshold (currently £85,000) you are required to keep digital VAT business records and send returns using Making Tax Digital (MTD)-compatible software for VAT periods starting on or after 1 April 2019.

Businesses with a taxable turnover below the VAT threshold can also sign up for MTD for VAT voluntarily. This also applies to other VAT entities, such as charities, government bodies and limited companies.

Here is a link with details from HMRC.

 

Will QuickBooks be MTD compliant?

Making Tax Digital (MTD) for VAT becomes mandatory in April 2019. A key change is that from April 2019 HMRC will no longer provide online tools for digital submission of VAT returns. Instead, submissions must be done through commercial software for the following -

VAT-registered business with a taxable turnover above the VATregistration threshold (currently £85,000) you are required to keep digital VAT business records and send returns using Making Tax Digital (MTD)-compatible software for VAT periods starting on or after 1 April 2019.

Businesses with a taxable turnover below the VAT threshold can also sign up for MTD for VAT voluntarily. This also applies to other VAT entities, such as charities, government bodies and limited companies.

You don’t need to worry. QuickBooks Online will be fully MTD ready come 1 April 2019.

 

What is a digital record?

Keeping your records digitally for Making Tax Digital (MTD) purposes means that you must store a digital copy of the transactions which make up the figures on your VAT return. QuickBooks online automatically does this for you.

Here is video from HMRC that helps understand this.

 

What if I go over the VAT threshold temporarily?

Once you’ve reached the VAT registration threshold you must comply with the requirements of Making Tax Digital (MTD). This is still the case even if your taxable turnover subsequently falls below the threshold, unless you meet one of the other exemptions detailed in the HMRC VAT Notice 700/22: Making Tax Digital for VAT .

 

I am a Flat Rate VAT business can I use QuickBooks?

Yes, you can submit a flat rate return through QuickBooks for MTD. Remember, before you can make a submission, you must enable MTD in QuickBooks and authorise QuickBooks to interact with HMRC.

 

*QuickBooks MTD software currently supports Standard, Cash and Flat Rate schemes. QuickBooks Bridging Software supports Standard and Cash schemes. Annual submissions are not currently supported but will be coming soon. Businesses whose home currency is not GBP are currently not supported for MTD.

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