We are almost there: MTD for VAT starts on April 1, 2019 and if your business turns over in excess of £85,000 per annum, you need to be hitting the ground running on that very day.
MTD for VAT will affect businesses mainly in the accounts department. However, it will also impact on the legal, administrative, HR and management sections of the business.
What If Our Business and Its Accounting Period Does Not Match the Dates of the Tax Year?
If your financial year is out of sync with the financial year of business (which runs from the beginning of April to the end of March) you will need to make the switch to compliant software before the cut-off date of April 1, 2019. In other words, you really need to do this now – if it has not been done already.
MTD for VAT affects the way businesses submit its VAT returns. The old ways of accounting through spreadsheets, Quick Books, Xero, Free Agent or Reckon One will not be obsolete, per se – they will simply convert to another form: MTD for VAT compliant formula.
Should My Business Stop Doing the VAT Returns on Spreadsheets Right Away?
Absolutely not. Many businesses have elected to run the old methods in parallel with the new software systems. Besides, MTD for VAT-compliant software can easily convert the old ways of doing tax returns on its existing platform.
The one major change happens when you press that key which sends the data directly to HMRC. It will come from the new software after you have migrated the data from your spreadsheets or whichever platform you were using.
All businesses need to prepare for the start date of April 1, 2019. Some businesses will have subsidiary firms working as a standalone franchise or a separate company. However, it may ultimately affect your business, if the smaller companies under the umbrella are not complying with its VAT returns by using MTD for VAT.
Once the start date has elapsed HMRC will fully expect all businesses affected to send its next VAT returns in an MTD-compatible fashion. The end of the first quarter is on June 30, 2019.
In most businesses, there are key pointers to subscribing to MTD. You should know vital information like the company’s VAT Registration Number, Company Registration Number and the NI number.