As of 1st April 2019, HMRC will require you to submit VAT returns using accounting software. This means you’ll no longer be able to submit manually through the HMRC gateway.
Making Tax Digital is an initiative being implemented by HMRC to digitise the UK's tax system. The aim is to make it easier for businesses to keep track of what they owe and pay the right amount of tax each time they submit a return online. Each year the government loses out on £9bn in unpaid taxes resulting from errors, while the overall tax gap is £34bn, which explains why it’s keen to introduce a new system that will make this a thing of the past.
Although MTD will eventually cover all tax, it’s being rolled out in phases. The first phase affects those above the VAT threshold of £85,000.
Luckily, Sage 200 software is MTD ready and can enable you to begin submitting your VAT returns to HMRC through your software ahead of the deadline of April 2019. You’ll also benefit from using software designed to make VAT quick and easy.
What could happen if you are not ready
- If you're not using software to submit your VAT return by April 2019, you will be unable to submit a return manually via the HMRC gateway,
- If you don’t submit returns on time then they could incur a penalty – for MTD the penalty system is not fully defined but you can find more information here,
- You can incur surcharges for late submissions or payments and also penalties for inaccurate returns.
If you would like to know more about Making Tax Digital, please fill out the form below and a member of our team will be in contact:
Alternatively, contact us here.