Making Tax Digital
Making Tax Digital (MTD)
The government has confirmed new VAT regulations for Making Tax Digital (MTD).
MTD has now become mandatory for VAT. Businesses with a turnover above the VAT threshold (currently £85,000) are required to keep their records digitally.
If your turnover is below the VAT threshold you are no longer exempt from MTD.
You may have heard software sellers telling you that your business software needs to be MTD compliant. What does this mean? Is this a threat to your business as an MYOB or Accountedge user?
The legislation does not prevent Accountedge users from keeping their records in the software they like.. We have examined the options for our continuing MYOB and Acclivity users. There are three potential routes.
- Users can approach their existing accountant to make filings on their behalf.
- Ledger One (previously Mamut) offers a Mac solution. Ledger One will not offer a PC version. This would then be the comprehensive solution that we hope for. Simple Accounting will support Mac clients wishing to transfer to Ledger One.
- The final option is that Simple Accounting uses the current method that supports its own clients through our Dropbox file sharing. We would either enter a copy of your database or get you to send a VAT report in every quarter (or every year if you are on VAT Annual Accounting). The totals on the report would be uploaded into a VAT return submission software. We then file on your behalf.
It is complex to submit an accurate VAT return direct from bookkeeping software. Complications include flat rate scheme, bad debt relief, partial exemption, reverse charge, method or rate change, back claims, unusual VAT rates, mixed supply, capital goods scheme, agency vat, error correction, VAT on stock imports and duty, etc. Usually these make it impossible to fully underpin a VAT return from bookkeeping software without manual amendment. And this assumes your bookkeeping is perfect. Which it never is.