Making Tax Digital: An Update
There is even some good news ...
POSTED BY ROGER EDDOWES ON 17/06/2019 @ 8:00AM
Now, that many businesses have filed their last VAT return under the old VAT filing regime, we are in the throws of registering businesses for Making Tax Digital ...
There is some good news for businesses wishing to use bridging software for Making Tax Digital!
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Such registration couldn't be done until we were past the VAT payment dates, specifically the direct debit collection date. As part of the Making Tax Digital (MTD) signing up process, all direct debit mandates are being automatically transferred, but there has been a subtle and very important change.
"Previously a business would file its VAT return and the return amount would subsequently be collected by direct debit!"
From now on, HM Revenue & Customs (HMRC) will be collecting the balance on the VAT account rather than the return amount. So, if you have underpaid in the past, HMRC will be bringing matters up-to-date.
There is a positive to be had for businesses who, for some remote reason, are unable to file a VAT return, they can make interim payments to mitigate surcharges which will be held in their VAT account. When the Return is finally submitted, HMRC won't collect the payment again.
Many of my regular readers may have read that HMRC will only permit the use of spreadsheets and bridging software for filing VAT returns in the first year. This is not the case now as HMRC have confirmed that spreadsheets and bridging software will be allowed for the foreseeable future.
This is good news for some very small businesses as spreadsheets with limited transactions are still the best option. For businesses who have to operate a partial exemption or margin schemes, spreadsheets are still the best solution owing to the complex calculations that some software can't cope with.
"Would you like to know more?"
If you'd like to find out more about Making Tax Digital, VAT returns or bridging software then do give me a call on 01908 774320 or click here to ping me an email and let's see how I can help you.
Until next time ...
More about Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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