Is your tax software compatible with MTD?

HM Revenue & Customs (HMRC) has released new information on its all-new tax system, Making Tax Digital (MTD).
It said the new details will help businesses and agents understand what they need to do before the April 2019 deadline.
Under the new programme, businesses registered for VAT with a taxable turnover above the VAT registration threshold (currently £85,000) will be asked to keep VAT records digitally and file their VAT returns using MTD compatible software.
Businesses earning below the VAT registration threshold do not have to use MTD, but they can do so voluntarily if they want to.
The latest round of information includes a new HMRC VAT Notice, a communications pack to provide stakeholders with further details about the scheme, and a list of compatible software providers.
The tax office says more than 130 software suppliers have told it that they’re interested in providing software for Making Tax Digital, but just 35 have previewed their products in HMRC’s test environment. These include Clear Books, Intuit, IRIS, Sage and Xero.
Although the changes to VAT filing do not go into effect until April 2019, HMRC has recommended that businesses start to prepare now by ensuring they are keeping records digitally and in accordance with the rules set out in the latest VAT Notice.
The notice contains essential must-read elements, such as how to provide data to HMRC, whether you have to file VAT online, potential penalties for non-compliance and how compatible software will interact with HMRC’s own digital system.
For help and advice preparing for Making Tax Digital, please get in touch.

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