For periods starting from April 2019, if your taxable turnover is above the VAT threshold of £85,000, you need to keep your VAT business records digitally and submit your VAT Return using compatible software. You can do this yourself or ask an agent to do some or all of the actions needed under Making Tax Digital on your behalf.
So, what is Making Tax Digital compatible software? You, or your agent, need to be able to submit VAT Returns to HMRC using software that draws information from your digital records and links directly to HMRC’s systems to send and receive information.
Are you already keeping your business records digitally?
If so, that’s great. All you need to think about is how to submit your VAT return to HMRC based on these records. If not, you need to consider the options for keeping your digital records and submitting information digitally to HMRC. You may decide to use different products to keep your digital records and send your VAT returns to HMRC – this is fine as long as they link together digitally. Or if you want to keep things simple, you may decide to use a single software product that is compatible with Making Tax Digital to keep your digital records and send your VAT returns.
Can you still use your spreadsheets?
Yes you can still use spreadsheets to keep your digital records. However you must then be able to send your VAT return information to HMRC digitally without having to type information from one system to another. The most common way to do this is to use something called ‘bridging software’ which will allow you to take the relevant information from your spreadsheet digitally and send it to HMRC.
If you don’t currently keep your records digitally or want to see what MTD compatible products are available, you’ll find a list of MTD software suppliers on GOV.UK.
As found on Youtube