With the April 2019 deadline fast approaching, Making Tax Digital for VAT (MTDfV) was the topic of discussion for our Peer to Peer Learning Network session for Finance Directors, facilitated by our Premier Plus Member Smith & Williamson.
The session held on 5 March, proved an interactive and insightful morning with businesses in the banking, publishing and hospitality sectors sharing their experiences of MTDfV so far and their expectations. The discussions revealed that, regardless of the industry, spreadsheets are very much the norm when it comes to preparing the nine boxes of a VAT return to be submitted to HMRC. However, what does this mean for MTDfV?
MTDfV can be broken down into two key requirements:
- To use MTDfV-compatible software to report the VAT return data on a period basis and receive information from HMRC, using an Application Programming Interface (API)
- To maintain digital records to provide a complete digital audit trail to support UK VAT returns
HMRC’s main aim is to remove all instances of manual intervention in the VAT return preparation process. Therefore, by the VAT period starting on or after the 1 April 2020 or 1 October 2020 (whichever is applicable to your business), links between software packages in the VAT preparation process must be digital and all spreadsheets used should be formula driven. Head to HMRC’s website to find out more on the topic.
The Peer to Peer Learning Network session certainly proved that every business is different and will each have different systems and processes in place. A key takeaway from the discussion is that businesses affected by MTDfV should review their processes and plan ahead to allow sufficient time to choose the right system for their specific business and implement it.
LCCI members, if your interested in joining our Peer to Peer Learning Network group contact Jay Abai, Membership Account Manager.