Making Tax Digital for VAT

Making Tax Digital (“MTD”) for VAT came into force on 1 April 2019. For the vast majority of VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000), it is mandatory to follow the MTD rules by keeping digital records and using software to submit their VAT returns.

In addition to the above digital submission requirement, certain data must be recorded digitally within ‘functional compatible software’ (FCS). The FCS can be a software program or a set of software programs (including spreadsheets provided certain conditions are met) that must be capable of:

  • Holding all the mandatory digital data as required under MTD;
  • Submitting the nine VAT return figures to HMRC for the MTD specific API;
  • Receiving information from HMRC via the API;
  • Transferring data between software programs via a ‘digital link’.

In recognition of the impact of Covid-19 on businesses, HMRC is providing all businesses obliged to be MTD compliant with more time to put in place digital links between all parts of their functional compatible software. HMRC have clarified that businesses now have until their first VAT return period starting on or after 1 April 2021 to put digital links in place. Whilst this is welcome news, we would recommend that businesses still undertake a review in order to be compliant in line with the new deadline. This is especially important if a new accounting software or changes to the existing set up are required as IT changes may require additional configuration and testing.

How Mazars can help with MTD for VAT

  • We can help support you via our free webinars to learn more about MTD for VAT
  • Check if your accounting software is MTD ready and on HMRC's "approved" list
  • Consider options to use the Mazars "bridging software" if required
  • Complete a VAT review to ensure you are MTD compliant
  • Provide in-person training to your Tax team
  • Help you get ahead of the curve - other taxes are planned to go digital in the future

Click here to download our step-by-step guide to ensuring your business is MTD compliant.

Bridging software

Mazars offers an HMRC compatible software solution for businesses who are not able to submit MTD compliant VAT returns using their existing ERP system. 

Click here for an overview of Mazars' Making Tax Digital bridging software solution.

Get in touch

If you have any questions or would like to discuss the changes, please feel free to get in touch.

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Making Tax Digital for VAT
Making Tax Digital for VAT
Making Tax Digital - Instructions
Making Tax Digital - Instructions
Making Tax Digital - Step-by-step guide
Making Tax Digital - Step-by-step guide