Making Tax Digital

Updated 16 April 2019

The Making tax Digital for VAT (MTD) took effect on 1 April 2019. Businesses will need to implement the changes from the first VAT Return ending after 1 April 2019.  

First Mandatory MTD VAT Period MTD Start Date Deadline for filing first Mandatory MTD VAT Return
    Electronic Payment Other Payment
1 April to 30 June 2019 1 April 2019 7 August 2019 31 July 2019
1 May to 31 July 2019 1 May 2019 7 September 2019 31 August 2019
1 June to 31 August 2019 1 June 2019 7 October 2019 30 September 2019

Who will this affect?

All businesses who are VAT registered and have a turnover over the VAT threshold (currently £85,000) will have to comply with Making Tax Digital for VAT purposes. There are some exception and deferments but you would have been informed if they apply.

VAT registered businesses with turnover under the VAT threshold do not have to comply with the Making Tax Digital legislation, although may do voluntarily if they so wish.

How do you sign up for MTD? 

Although MTD will be mandatory for those meeting the requirements, the process of “signing up” to MTD is not automatic.  You will need to inform HMRC if you are required to comply with MTD for VAT.  This process is done using your existing Government Gateway.

The information and link to sign up for MTD can be found here. From this page click on the “Sign up your Business” link. You will need to know if your software is compatible, your Government Gateway login and password and also your Unique Tax Reference.

If we act on your behalf as agent for VAT we are happy to complete the sign up with HMRC on your behalf.

Businesses that pay VAT by Direct Debit cannot sign up in the 15 working days leading up to, or the 5 working days after sending a VAT Return.

Once you are registered with HMRC for MTD you will also need to ensure your software settings are updated to reflect the change to MTD.  Where this option is saved varies between each software provider.

Digital record keeping requirements

The following records must be kept in a MTD complaint manner:

Designatory Data:

  • Business or organisation name
  • Address of the principle place of business
  • VAT Registration Number
  • Details of any VAT accounting schemes used
  • For each supply you make:
  • The time of supply (tax point)
  • The value of the supply (net of VAT)
  • The rate of VAT charged
  • For each supply you receive:
  • The time of supply
  • The value of the supply
  • The amount of input tax you will claim

Summary Data, including:

  • The output tax due on sales
  • The output tax due on acquisitions from EU member states
  • Tax payable under reverse charge procedure
  • Tax needed to be paid following a correction or error adjustment
  • The Input tax claimable from purchases
  • The Input tax allowable on acquisitions from EU member states
  • The tax reclaimable following a correction or error adjustment
  • Any other necessary adjustment required by VAT rules.

Software Options

A list of software for Making Tax Digital for VAT can be found here.

If you are using a desktop software you must ensure it has been updated to the most recent version to maintain the API link or if using a bespoke system that your provider is making the necessary upgrades to be compatible.

At Grafton Jones we support the vision of a digital tax system and as such are dedicated to helping our clients with their digital requirements.  With the additional time given by HMRC this is now the perfect opportunity to get ahead of the game and get the software which is right for you.

We will support any digital software you are currently using or wish to use. 

Please contact us if you wish to discuss your software options or require further information on products available.

Based on details available to us at time of writing