MAKING TAX DIGITAL FOR VAT GUIDANCE ISSUED
HMRC have now issued their detailed guidance on the digital record keeping and return requirements for Making Tax Digital (MTD) for VAT.
VAT Notice 700/22 clarifies that spreadsheets may still be used to keep business records provided that there is bridging software that links to the Government gateway.
There will however be a one year “grace” period during the first year of MTD when businesses will not be required to have digital links between software programs, referred to in the VAT Notice as a “soft landing”.
The VAT notice includes a number of helpful examples illustrating different accounting systems and the digital links required to comply with MTD for VAT.
The VAT notice is essential reading for all VAT registered businesses.
WHEN DOES MTD FOR VAT START?
SPREADING THE 2019 LOAN CHARGE
Last month we alerted you to the requirement to register with HMRC by 30 September 2018 in order to settle on preferential terms before the outstanding loan charge arises on 5 April 2019.
This new tax charge applies to any outstanding loans that exist as a result of a disguised remuneration tax avoidance scheme used by your employer such as those involving Employee Benefit Trusts (EBTs).
HMRC have now announced a spreading provision that will allow individual taxpayers with total income of no more than £50,000 in 2018/19 to spread the charge over 5 years.
CGT ON PROPERTY SALES DUE WITHIN 30 DAYS FROM 2020
“SOFT LANDING” FOR MTD FOR VAT FOR THE FIRST YEAR
For the first year of MTD for VAT (VAT periods commencing between 1 April 2019 and 31 March 2020) businesses will not be required to have digital links between software programs. The one exception to this is where data is transferred, following preparation of the information required for the VAT Return, to another product (for example, a bridging product) that is Application Programme Interface (API) – enabled solely for the purpose of submitting the 9 Box VAT Return data to HMRC. The transfer of data to this product must be digital.
For the first year of MTD for VAT (VAT periods commencing between 1 April 2019 and 31 March 2020), where a digital link has not been established between software programs, HMRC will accept the use of cut and paste as being a digital link for these VAT periods.
However, for VAT periods starting on or after 1 April 2020, there must be a digital link for any transfer or exchange of data between software programs, products or applications used as functional compatible software.
USE OF SPREADSHEETS IN PREPARING VAT RETURNS
WELSH INCOME TAX STARTS 6th APRIL 2019
ASK ALEXA TO CONTACT HMRC FOR HELP
HMRC has launched new and innovative technology to help more than 3 million customers renew their tax credits. HMRC has developed a customer-focused service through Amazon Alexa specifically for those seeking help with their tax credits renewals information to be transferred to HMRC via an API. It uses a spreadsheet to record all sales, purchases, and expenses in a digital format. The VAT Return is then prepared within the spreadsheet, using formulae already written into the spreadsheet.
The VAT Return information is then sent via a mandatory digital link to bridging software, which digitally submits the information directly to HMRC. Example 6 shows how a spreadsheet would be acceptable in order to consolidate VAT information prior to submit a Group VAT return.
If you haven’t already done so, please contact us to help you get ready for this significant change in VAT accounting and reporting
RULES FOR “RENT A ROOM” RELIEF TO BE TIGHTENED UP FROM 6 APRIL 2019
• check their tax credits payments schedule
• find out how much they have earned for the year
- 1/08: Corporation tax for year to 31/10/17 (unless pay quarterly)
- 19/08: PAYE & NIC deductions, and CIS return and tax, for month to 5/8/18 (due 22/08 if you pay electronically)
- 1/09: Corporation tax for year to 30/11/17 (unless pay quarterly)
19/09 PAYE & NIC deductions, and CIS return and tax, for month to 5/8/19 (due 22/08 if you pay electronically)