Making Tax Digital for VAT: What does it mean for you?
Financials; FinancialsLIVE; Education FinancialsLIVE; Resource 32000; Prescient+ and Legal
Making Tax Digital for Business (MTDfB) is HMRC’s plan to require organisations to complete VAT and Corporation Tax Returns using automated internet submissions – this is different to filling in an online form from HMRC.
- See HMRC - Making Tax Digital Policy Paper
- Digital submission of VAT Returns began in April 2019, although for some organisations this is deferred until October 2019. If your organisation is subject to the deferral, you should have received notification from HMRC.
What does this mean for you?
MTDfB requires most VAT registered businesses with a turnover above £85,000 to maintain digital records in appropriate software. The software must be able to:
- Link or hold relevant VAT transaction data from an accounting system in digital form
- Create a VAT Return from the digital records
- Connect to HMRC and transmit the VAT Returns rather than using HMRC’s online portal
Adjustments, such as partial exemption calculations, can be calculated separately outside of the digital records and then transferred digitally or manually for the VAT Return.
How will Civica facilitate this?
The following solutions will have modules that will allow you to meet the requirements:
- Education FinancialsLIVE
- Resource 32000
There are two elements to the module:
- VAT Return Submission Facility - A mechanism for transmitting the 9 figures that constitute the VAT return to HMRC. This also validates that the submission has been accepted and records the details.
- Integrated Audit Trail - A comprehensive database of transactional data providing a full audit trail that validates the calculation of each figure required for the VAT return.