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HMRC Regulated

Company Number 11679134

Business Support

© 2017 Attilio Accounting

VAT Digital

January 11, 2019


From 1st April 2019 the way in which many businesses file VAT, and in some cases record their accounts, will change.

Adminsoft Accounts will support MTD compliant VAT returns.

Those businesses under the VAT threshold, currently £85,000 per year will not be required to use MTD. If VAT registered, they can continue to file their VAT returns as now. Including using the HMRC on-line portal. This portal is not closing down. These businesses will see no change in their accounting procedures. Although Adminsoft Accounts will support MTD compliant VAT returns, the current (old) way of submitting VAT returns directly to HMRC will remain. However, change is on the way, though HMRC do not anticipate extending MTD to all businesses until April 2020 at the earliest.

For those businesses whose turnover is in excess of the VAT threshold, estimated at 1.1m businesses, things may change, and the rest of this document is about those changes. There are some exceptions, in that around 3.5% of businesses will not be required to use MTD even though their turnover exceeds the VAT threshold. You will need to check with HMRC if you think you have a good reason not to be included for MTD. For most businesses, from 1st April 2019 you will no longer be able to use HMRC's on-line portal to file your VAT returns. You will have to use 3rd party software, such as Adminsoft Accounts. That software will need to support MTD, because the current way of submitting a VAT return directly to HMRC is not MTD compliant. So your software needs to be up to date.

What is the difference between the way I file VAT directly with HMRC now and what I'll be doing from April 2019?

If you are using software rather than HMRC's on-line portal, the current way of directly submitting a VAT return to HMRC requires the data to be in XML format ('XML' is a way of presenting the data being sent). MTD requires data to be in JSON format. It also has a different way of handling security. If you use Adminsoft Accounts to file your VAT return directly with HMRC, you won't see much difference. Though one thing you will notice, is that to use MTD the software will take you to HMRC's web site to login in and authorise Adminsoft Accounts for submitting your VAT returns. This extra security will only appear once every 18 months, you won't have the hassle of going through the authorisation process every time. Also, Adminsoft Accounts will be able to download some of your VAT information that's held on HMRC's server.

What if I'm below the VAT threshold now, but then exceed it?

If your turnover exceeds the VAT threshold in any 12 month period, you will have to start filing MTD compliant VAT returns. Once you start with MTD, if your turnover falls below the VAT threshold, you can not go back to the old way of filing VAT returns. Once you start filing MTD compliant VAT returns, there's no going back.

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