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Making Tax Digital (MTD) October 2018 Update


#21

Hi @mphayesuk

If you haven’t already, you’ll need to register with HMRC for their pilot scheme, and to ensure you’re eligible.

Once you’ve done this, let us know and we’ll enable it on your account for you.


#22

We now have confirmation from HMRC that we can file VAT returns via software so could you please enable this on our account?
Many thanks


#23

I’m in the same situation as @johnsm13 - VAT registered years ago, but annual turnover less than 85K. There seems to be no information about what firms in our situation are expected to do after April 2019.


#24

Hi @sbanton

I believe that the threshold would not make a difference in this case. When MTD VAT is rolled out, any VAT registered business would likely need to submit their return through a MTD compatible software package.


#25

I don’t understand why there isn’t a definitive answer to this question - how come it’s only “likely”? Haven’t HMRC said one way or the other?

Thanks for replying - are you able to query HMRC directly about this? I’ve emailed them but have had no response.

Cheers
S.


#26

Hi @sbanton

There are still some details regarding MTD which haven’t yet been confirmed. HMRC will be able to confirm the position for your business.

At the moment for example, only certain businesses can join the MTD VAT pilot, but HMRC dictates and enables this for individual businesses.


#27

@sbanton @johnsm13

I’ve asked HMRC to clarify on this point. It’s unlikely we’ll get a response until after the New Year, but as soon as I hear anything I will update you both.


#28

@sbanton @johnsm13

We’ve received the below response from HMRC regarding your query. Hopefully this helps.

  1. MTD is only mandatory for those over the threshold, those who are voluntary or under the threshold can still use the government gateway. ”Only businesses with taxable turnover that has never exceeded the VAT registration threshold (currently £85,000) will be exempt from Making Tax Digital. You will therefore need to keep an eye on your taxable turnover, especially if you think it is close to the VAT registration threshold.”

  2. The only exceptions are those who are currently exempt. Those exemptions will still apply, otherwise, if you are over the threshold, you will need to find MTD compliant software


#29

Hi,

Wonderfully arcane response from HMRC, as usual. “Only mandatory for those over the threshold” immediately followed by “Only (those) that (have) never exceeded the threshold”).

So the edge case of those who were once over the threshold, but are no longer turning over that amount and yet are still VAT registered, remains unanswered. Perhaps we fall into the “voluntary” category, in that we could choose to de-register but have so far not done so.

It’ll be interesting to see what HMRC eventually say in response to my own email to them, asking the same question.

Cheers
S.


#30

Here’s HMRC’s response to my enquiry to them on this topic…

As you are aware with effect from 1 April 2019, if your taxable turnover is above the VAT registration threshold you must follow the rules set out in VAT Notice 700/22: Making Tax Digital for VAT. However, if you’re taxable turnover subsequently falls below the threshold you will be required to continue to follow the Making Tax Digital rules, unless you deregister from VAT or meet other exemption criteria.

Only businesses with a taxable turnover that has never exceeded the VAT registration threshold on or after the effective date will be exempt from Making Tax Digital and continue to submit VAT Returns using the existing method.

So:

  1. As of 1st April 19 if above threshold => must do MTD
  2. If subsequently falls below threshold => must continue with MTD

But

  1. If never exceeded threshold on or after 1 April 19 => can continue with existing method

…so if I’m VAT registered, but my turnover is below the threshold as of 1 April 19 and it continues to stay that way, I don’t have to use MTD?

Does that sound correct, based on reading what HMRC have said to me and to you?

Cheers
S.


#31

Yes that sounds correct.

From all I have read on MTD this is the way I understand it:

From 1st April 2019, if you exceed the vat threshold you must go on the MTD system.
Once you are on MTD you stay on it even if you fall below the threshold unless you deregister from vat


#32

I sought further clarification from HMRC, and received the following non-answer:

From April 2019 all VAT registered businesses over the VAT threshold will be required by law to file their VAT returns and keep digital records using a compatible software package.

… which doesn’t apply to me.

This will remain to be the case even if your turnover subsequently falls below the VAT threshold.

… which doesn’t apply to me, since I’m already below threshold at the April 2019 point.

On review of the guidance on VAT Notice 700/22 – Making Tax Digital for Business, Section 2.1 states “If your taxable turnover drops below the VAT registration threshold at any point after 1 April 2019 you are still required to continue to keep digital records and send HMRC your VAT Returns using compatible software.”

… again, doesn’t apply for the same reason. Then there’s this throwaway remark:

As you have dropped below the VAT threshold before 1 April 2019, I advise reading over the section as mentioned above which may assist you further.

… utterly useless, as the guidance specifically doesn’t address the question of VAT registered businesses whose turnover is below threshold at April 2019.

I get the distinct impression that HMRC don’t actually know the answer to this question, and are trying to avoid giving a clear response. Anyone else feel the same way?

S.


#33

I’m already using QuickFile to submit VAT and EU sales returns to HMRC using the Reports\Generate VAT return features. Do I need to do anything else to be MTD compliant?


#34

Hi,

I used to submit my VAT returns through the automated VAT return option in Quickfile.

Around 2 years ago I moved the Flat Rate VAT scheme. At the time I couldn’t figure out how to change this setting in the Quickfile VAT return area so I disabled the automatic submission feature and each quarter thereafter I would generate the VAT report .csv file and would then manually delate the invoices and payments that weren’t applicable to the VAT quarter to give me a VAT summary for the quarter I wanted to file my return and would then enter the relevant information into the VAT return section on the HMRC website.

With the move to making tax digital I can no longer do this. However, I still cannot seem to either a) clear out from the VAT return calculation in Quickfile all those months/years worth of invoices that aren’t applicable to my current VAT period and b) change the calculation to the flat rate.

Am a bit stumped on what to do next - has anyone else experienced similar?

Thanks
Steve


#35

@EYabsley you will still generate the returns through the same route, but you need to sign up for MTD with HMRC and then “connect” your tax account to QuickFile via “reports” -> “HMRC”. The previous online submission process is electronic but it isn’t MTD.


#36

Hi @chiltsy74

You would need to enter the missing VAT returns ensuring they match what you have submitted (otherwise your figures will differ).

If you do this without submitting anything, this should bring it up to date for you.


#37

Thanks Matthew,

So is it possible to overwrite what the automated VAT return calculator thinks is due. Obviously, being on Flat Rate I’m at a different rate than 20% (16.5%). Last time I looked I wasn’t able to overwrite what Quickfile had calculated.

Thanks
Steve


#38

If you’re on Flat Rate then you need to configure it as such in your QuickFile VAT settings, and QuickFile will then do the calculations on the flat rate basis (and not reclaim anything on purchases).


#39

Hi @chiltsy74

As @ian_roberts said, it’s better to use the QuickFile settings for this as flat rate is calculated on the gross price.

We’ve support flat rate scheme for quite some time, but let us know if you have any queries or issues.


#40

Hi, I’ve just signed up for MTD do I need to do anything else? I’ve already submitted my VAT return for Feb through quickfile