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COVID-19: As a firm, we are heeding the Government’s advice, and the majority of our staff are now working from home.

Our offices are open to clients and visitors if you need to drop off or pick up records. Please telephone ahead to arrange a date and time so we can let our receptionists know.

It is business as usual at Lang Bennetts, so please let us know if you require our assistance. We are picking up e-mails and all our staff can be contacted via the usual office numbers.

What is MTD?

MTD or Making Tax Digital is part of HMRC's efforts to modernise the UK’s tax system by using digital record keeping.

Businesses will be required to use software to keep their accounting records and submit their returns to HMRC using that software.

Please click on the questions below to reveal the answers:

Most businesses that are VAT registered and whose taxable turnover exceeds the VAT registration threshold - currently £85,000, will be mandated for MTD.

There is a six month deferral period for the following businesses, and so the deadline for MTD for VAT for these businesses will be 1 October 2019:

  • VAT groups and VAT divisions trading in the UK
  • Trusts
  • 'Not for profit' organisations that aren't set up as a company
  • Local authorities
  • Public sector entities required to provide additional information on their VAT returns
  • Traders based overseas
  • Annual accounting users
  • Those required to make payments on account

MTD will apply to businesses using the cash basis and those using flat rate, retail and second hand schemes. Businesses subject to partial exemption will also be expected to comply. Any adjustments will need to be made either in your accounting software or in a linked spreadsheet before filing the VAT return.

In time MTD is expected to impact all VAT registered business but again we are still waiting for further clarification from HMRC.

Yes, for now. From April 2020 it is expected that MTD will apply to income and corporation tax, however this is yet to be confirmed by HMRC and we wait for further details to be released.

No. It will be necessary to sign up to a new MTD account with HMRC.

There must be a ‘digital link’ between the transactions that are recorded in your software and the totals in each of the 9 VAT return boxes, but it is only these totals that are transmitted to HMRC.

It is expected that more information will be required to be filed with HMRC in future.

For VAT return periods beginning on or after 1 April 2019. For many businesses the first return due under the new system will be the VAT quarter ending on 30 June 2019.

VAT Quarters First MTD VAT quarter end
Mar/Jun/Sep/Dec June 2019
Jan/Apr/Jul/Oct July 2019
Feb/May/Aug/Nov August 2019

We understand it will be possible to apply for an exemption if you or your business do not use computers for religious reasons, or are unable to comply because of age, disability, location or other reasons. You will need to contact the HMRC VAT helpline to start the application process.

Alternatively you might consider asking us to deal with your VAT returns for you.

Not necessarily. HMRC have accepted that many businesses use spreadsheets to record their transactions and in some cases use them to calculate their VAT return figures.

To remain compliant, those spreadsheets will have to be connected to another piece of software (known as bridging software) to file VAT returns with HMRC in order to maintain a digital link.

We have acquired our own VAT filer software which will digitally link to spreadsheet data and will allow us to file MTD compliant VAT returns on your behalf.

We expect certain software providers to develop similar products that you will be able to purchase directly before MTD starts in April.

It is thought spreadsheets and bridging software are not considered a long-term solution.

Not necessarily.

Many of the cloud packages are already MTD compatible and most should be by the time MTD starts.

Sage 50 Desktop products are not MTD compatible even if you have taken out support and enjoy regular software updates.

You will still need to purchase an additional MTD module in addition to your support package (which we understand will cost £25 a month), or upgrade to a Sage 50 cloud subscription which is MTD compliant with an ongoing subscription.

QuickBooks desktop customers we understand will require a subscription, so older versions of the software will need to be upgraded, or migrated to QuickBooks online.

If you use other products, you will need to contact your software vendor to find out about their plans for MTD. If compatibility is an issue, we may be able to assist with our own VAT filer software or to help with a software upgrade or change.

At Lang Bennetts we are a forward thinking modern firm and we have the skills to support you with your choice of accounting software, no matter what you use, from initial installation and training, providing ongoing support, to a full book keeping service – taking all the worries of MTD away from you.

We support cloud packages from all the main providers including QuickBooks, FreeAgent, Kashflow and Sage.

We have a long history of working with desktop software from Sage and QuickBooks and can support you with the continued use of those packages and in transitioning seamlessly to cloud based software in order to remain MTD compliant.

Our VAT filer software should also mean that we can make MTD compatible VAT submissions on your behalf no matter what software you use, as long as data can be extracted directly into spreadsheet or csv format.

If you have any questions about how we can support you please speak to your usual point of contact or use the form below to get in touch.

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Other resources

MTD Factsheet

MTD Blog

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MTD and Software Accreditations

Making Tax Digital ProAdvisor - Quickbooks Quickbooks - Platinum ProAdvisor Quickbooks - Certified ProAdvisor Xero - Making Tax Digital Xero - Silver Partner Xero Advisor