Get ready for Making Tax Digital
As of April 2019, VAT-registered businesses with a turnover of more than £85,000 are required to use the Making Tax Digital (MTD) service to keep records digitally and use accounting software to submit their VAT returns. This will enable businesses to be MTD compliant with the HMRC.
Hereby VAT is taking the digital turn in the UK, meaning that many British businesses must change their way of preparing and filing VAT returns. From April 1st 2019 VAT returns must be submitted to HMRC through MTD-compliant softwares and businesses must digitally record their VAT transactions using MTD-compliant softwares. Submitting VAT returns using HMRC's own VAT online services will no longer be possible.
Per April 2020 (date to be confirmed by the British government), sole traders, partnerships, landlords and trading companies will also be affected.
Read more on what is changing with Making Tax digital here
Do you have to be MTD compliant?
Not all companies fall under the scope of MTD. You are exempt if your company is already free from filing a VAT return online.
You can also be partly exempt. For instance, you can't reclaim VAT you pay on goods ands services that aren't for business purposes, but if you buy them for both business and personal use, then you will be to use partial exemption method. Read more about partial exemption methods
Read more: Does my business have to be MTD compliant?
What is the timeline for Making Tax Digital for VAT?
- October 2018, open to sole traders and companies.
- Early 2019, testing open to partnerships and those customers that trade with the EU
- Spring 2019, pilot open for MTD customers that have been deferred
- April 2019, MTD mandated for all customers (except those that have been deferred)
- October 2019, MTD mandated for businesses that have been deferred.
Read more about the timeline for Making Tax Digital
Is Bokio HMRC compliant?
Bokio will very soon be a MTD-compliant software and will help you all the way through. Our team of developers is currently working hard on having Bokio ready for MTD. We estimate to be ready in the coming days, before April 1st. Thus you will soon find us in this governmental list of MTD-compliant softwares.
Curious to see how Bokio works?
If you have any further question on MTD compliance please email us at firstname.lastname@example.org