From April 2019, all eligible UK VAT-registered businesses will have to keep their financial records in a digital form and submit their VAT returns using approved software. Find out whether you are eligible here.
This article is for accountants who are eligible, or have clients who are eligible for Making Tax Digital (MTD) or signed up for MTD voluntarily.
If you have not signed up for MTD, go to this article.
HMRC defines functional compatible software for MTD as a program, a set of two programs, products or applications that must be able to:
- Record and preserve digital records
- Provide HMRC with information of VAT returns from data held within the program using the API platform.
- Receive information from HMRC via the API platform
HMRC understands that that some software available in the market will be able to perform all of the above actions and some may not be able to perform them by themselves. It is accepted that the complete set of digital records to meet MTD requirements does not all have to be held in one place or in one program. As long as there is an effective integration between required sources (Excel or CSV) with the ability to submit via a digital link you may use the bridging solution such as the one offered by QuickBooks.
Understanding digital links and manual intervention
A digital link is one where the transfer or exchange of data is made between the software and HMRC. This must be done without the need for manual intervention.
Without manual intervention is when you do not have to manually enter information into the software but instead upload a spreadsheet that contains your VAT data. The following rule has the force of law: The use of “cut and paste” does not constitute to a digital link except for the soft landing period. Refer to this HMRC article for further details.
How does the bridging feature for QuickBooks help with this?
Our bridging solution is simple and effective. In a few simple steps you can upload the amounts needed for boxes 1 to 9 and then submit it digitally through Quickbooks. You do not need to copy paste information needed and you can use both CSV or Excel spreadsheets through our Bridging solution.
Once submitted you will receive notification of the return being submitted for your records. You can also use the bridging solution to submit VAT returns for schemes that may not be supported by QuickBooks or other solutions.
To find out how to submit VAT return using our bridging software, refer to our article.
*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.