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VAT and Making Tax Digital for QuickBooks Desktop

If you use QuickBooks Desktop, this article will explain what Making Tax Digital (MTD) means for you and your business.

What's changing?

Since April 2019, UK VAT-registered businesses earning above the VAT threshold of £85,000 per year are required to keep their records digitally and submit VAT returns to HMRC through MTD-compliant software–just like QuickBooks.

The government plans to roll out this digital transformation across the entire tax system, and come April 2022 all VAT-registered businesses must sign up to MTD, whatever they earn. These are the deadlines so far:

April 2021 The option to submit returns the old way (via XML) is no longer available.
April 2022MTD for VAT applies to all VAT-registered businesses.
April 2023MTD for Income Tax applies to self-employed businesses and landlords with annual business or property income above £10,000.
April 2026MTD for Corporation Tax may come into effect for incorporated businesses and other organisations within the charge to Corporation Tax

What does this mean for me?

  1. Customers who need a MTD compliant version will need an active subscription to be on the latest supported version (currently QuickBooks 2020) and install all new updates and upgrades as they become available.
  2. If you are on QuickBooks for desktop 2018 or 2019, you can continue to submit VAT returns as usual. All supported versions have been updated to enable customers to submit VAT in the usual way ahead of May 2019. If you wish to file via MTD, please ensure you are on QuickBooks 2020.
  3. If you are on an unsupported version (QuickBooks 2017 and below) you can no longer e-file VAT and you should upgrade to the latest version in order to continue to e-file VAT with HMRC.

How do I comply?

To comply with MTD for VAT, businesses have to keep digital records. This must be done using what HMRC calls 'compatible software’. In other words, it must be able to connect directly to HMRC and send your details to them using digital links.

What can I do next?

Please call us on 0808 168 9535 (support) or 0808 168 9533 (Sales) for upgrade pricing and to discuss your options. Please also see our 'move to QuickBooks Online' pages or 'upgrade desktop' page that also includes system requirements for QuickBooks 2020.

For more information on Making Tax Digital, see HMRC's Overview of Making Tax Digital. You can also find information on the Making Tax Digital timetable.

If you would like to receive MTD updates specifically for QuickBooks Desktop, sign up here.

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