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From 1 April 2019 businesses in MTD for VAT were required to:

• Maintain their accounting records digitally in a software product eg Xero, Quickfile or a spreadsheet, and
• Submit their VAT returns to HMRC using functional compatible software.

HMRC are sending awareness letters to businesses to make you aware of this.

Who is within the scope of MTD for VAT?

Business is not VAT registered	MTD for VAT is not applicable
Business is VAT registered AND turnover is above £85,000	MTD for VAT applies
Business is VAT registered BUT turnover is below £85,000	Continue to use Government Gateway for VAT Can elect into MTD Monitor turnover as once >£85,000 MTD will apply

When did it start?

VAT quarters	Keep digital accounting records from	First MTD for VAT quarter	Deadline for first MTD for VAT return
Mar/Jun/Sep/Dec	12 months ended 31 March 2019	Apr/May/Jun 2019	7 August 2019
Apr/Jul/Oct/Jan	1 May 2019	May/Jun/Jul 2019	7 September 2019
May/Aug/Nov/Feb	1 June 2019	June/Jul/Aug 2019	7 October 2019

How do I sign up for MTD for VAT?

This is done via Government Gateway Business Tax Account.  You must opt in to the scheme.

The timing is critical

• Do after all non-MTD VAT returns are filed, but
• Before first MTD VAT return
• If business pays by direct debit can’t sign up
  • Within 15 working days before a submission deadline or
  • Within 5 working days after a submission deadline

For example:

If your last quarter end under non-MTD is 31 March 2019 and you pay by direct debit.

• Last non-MTD return submission deadline is 7 May 2019
• First possible date to sign up is 15 May 2019
• Last possible date to sign up is 16 July 2019

Digital records

From 1 April 2020 businesses using MTD for VAT are required to ensure that once the transactions are recorded they should only link through digitally and there should be no re-keying.

This means that if you currently journal in your sales from a business software into your accounting software you will need to either:

• replace this by a digital link e.g. by doing a CSV export/import.

• or enter the daily takings instead of say the weekly or monthly as this will then act as your digital records.

If you would like support and guidance through this process, or would like us to submit your VAT returns under MTD for VAT on your behalf, please get in touch.

JLA Accounting Limited takes every care in preparing material to ensure that the content is accurate and up to date. However, no responsibility for loss for anyone acting from or refraining from acting as a result of this information can be accepted by JLA Accounting Limited.