Making Tax Digital (MTD) October 2018 Update

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We’re sure by now you’ve heard about Making Tax Digital (MTD). We wanted to give you a quick overview on what to expect and how we’ve been preparing for these changes.

As you may know HMRC are working on a number of initiatives to simplify the way businesses and individuals report their taxes. These updates, collectively referred to as “Making Tax Digital” (MTD), will be deployed in stages with the first due to be implemented in April 2019.

How will this affect me?

The April 2019 changes will focus primarily on how VAT information is filed with HMRC. If you’re VAT registered and currently using QuickFile to submit your quarterly returns, there’s little to do. You’ll just need to link your HMRC Tax Account to QuickFile before you can submit your next VAT return.

Under the new MTD system we’ll also give you a bunch of additional VAT reports to show your open and closed VAT periods, along with a real time view of your HMRC payments and liabilities. You can find out more about these reports on the link below.

MTD for VAT - What’s new?

From April 2019 VAT registered businesses with a turnover exceeding the current VAT Threshold (£85,000) will also need to keep their VAT records digitally and file their returns using MTD compatible software such as QuickFile. If you’re already doing this then there’s nothing to worry about.

The VAT Pilot Scheme

Yesterday HMRC announced that the VAT Pilot scheme is now open to the public. Over the last 6 months we have been working with HMRC and a number of QuickFile users to stress test our MTD VAT implementation. You can find out more about enrolling with HMRC on the VAT Pilot scheme here.

HMRC - MTD VAT Pilot open for business

If you choose to voluntarily join the VAT Pilot Scheme with HMRC and you meet their eligibility criteria, just let us know and we’ll enable the MTD features on your QuickFile account.

Further Guidance

We will keep you posted on all MTD developments as and when they happen. If you have any unanswered questions, we’d love to hear from you, just post your questions right here and we’ll get back to you ASAP.

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Our little company has 3 quickfile accounts for the different parts of our business, so that we can easily produce management accounts for each part. All have the same VAT reg. no., so is this going to be a problem when we can to file our returns via quickfile? Presumably HMRC won’t be happy to receive 3 VAT returns for the same reg. no.

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@lbishop99777 how are you filing your VAT returns at the moment? Are you aggregating the figures from each of your QuickFile accounts and submitting through your HMRC VAT Online account?

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Yes, that’s correct.

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From April 2019 HMRC will no longer offer a direct VAT filing option through their own website. You can file your VAT returns from one of your QuickFile accounts, although you will need to use the inline adjustments tool for each relevant box to ensure the totals are correct.

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Will that be allowed under MTD? I thought the point was that there had to be a digital link from the backing records to the final return submission, with no manual copying of figures from one place to another.

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There’s nothing stopping you from making inline adjustments, as long as you have records to back those adjustments. In fact during development we extended the inline adjustment tool so that additional narrative could be supplied.

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You say from April HMRC will no longer allow returns to be submitted directly to its site, but that the new arrangements don’t apply to businesses with turnover under £85,000. My turnover is less than this but I’m still voluntarily within the scope of VAT. What will firms in my situation do?

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I tried to volunteer today. The first question - do you have more than one business registered for VAT. No I don’t. End of application.

So much for opening it up to small businesses!

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Hi @johnsm13

From the article linked above, it does seem that only businesses both VAT registered and with a taxable turnover above £85,000. It says:

From 1 April 2019, under Making Tax Digital, around 1 million businesses registered for VAT with a taxable turnover above £85,000 will need to keep their VAT records digitally and file their returns using Making Tax Digital-compatible software.

@Healthpay - Is this on the HMRC registration page? Certainly seems a bit odd. May be worth giving them a call to establish why this was the case.

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Hmmmmmm. Life is too short to ring that lot when you don’t have to!

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This has also happened to 3 vat reg business’s that I know of. The sign up page’s first question is
" Do you have more than one VAT registered business?"
with a yes or no option,
Tick NO and it says
“You can’t use this service yet. This service is only available to some limited companies and sole traders.
You’ll be able to sign up for this service by April 2019.”
Tick YES and it asks for a vat number,
Then the same message as above
So it is still only for some businesses

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How do I do this? Already use QF to send my VAT returns so my log in details are already in the QF VAT settings section.

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Under MTD the authentication system is a little different. If you join the HMRC VAT Pilot then we would need to activate the feature on your account. Just send a private message to @QFMathew or myself and we’ll apply that switch and send some instructions.

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I’d just like to say that I’d urge everyone NOT to sign up to hmrcs mtd pilot, because once your in, you can’t get out.

And, if it ends up being a totally flop, you will be stuck in a vat system that only you and a few others have no choice but to follow.

It’s happend before, and it can happen again. Please by all means test the mtd submissions in quickfile, but I’d strongly suggest waiting till its compulsory before crossing over.

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I’ve joined the pilot scheme and submitted a VAT return but HMRC say that it was made using the old process and that I need to let my software provider know that I’m on the pilot scheme. Please help.

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@PBULL - I’ll send you a private message to get some account details from you.

Please look for a green notification in the top right

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I have joined the pilot scheme and submitted a VAT return via quickfile too, but HMRC sent an email saying that it was made using the old process and that I need to let my software provider know that I’m on the pilot scheme. This is bizarre as i had an email from quickfile saying that HMRC had accepted the submission.

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Hi @riscosman

At this stage, unless we enable the MTD VAT scheme on your account, your return will be sent using the old scheme. Although the old scheme is digital, it’s not part of the MTD scheme.

I’ll send you a PM shortly to get some account details from you.

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Hi, I would be interested in joining the pilot for the MTD HMRC service.

Thanks
Martin