UK: 
USA:
Businesses registered for VAT in the UK have been reminded that in under two weeks they will no longer be able to use their VAT online account to submit VAT returns and will instead have to utilise Making Tax Digital (MTD).
All companies must now register for MTD if they have not already done so and, from 1st November, use MTD-compliant software to maintain accurate VAT records and file returns.
In excess of 1.8 million businesses are already using MTD, with more than 19 million VAT returns so far submitted via compatible software.
MTD is designed to benefit organisations by enabling them to get tax right at the first time of asking by reducing errors. It will increase visibility of tax data and allow any issues to be highlighted and rectified faster than under traditional methods.
Any business that does not file their VAT returns through MTD-compatible software from 1st November could be hit with a penalty from HMRC. Even companies that already adhere to some of the key policies of MTD – such as keeping digital records – must check their software is compliant or risk breaking the rules.
Firms that have yet to sign up to MTD can do so by following these steps:
1) Select MTD-compliant software from the government’s approved list.
2) Check the permissions in the software. Once a user syncs it with MTD they will be able to easily file VAT returns.
3) Keep digital records for current and future VAT returns.
4) Register for MTD and file all future VAT returns in the correct way.
The only exceptions to the MTD deadline include a small number of businesses that have received an exemption from HMRC, as well as all those that are already exempt from filing VAT returns online and any company currently subject to an insolvency procedure.
At Innovate Tax, we have vast experience when it comes to helping clients make the switch to MTD. Read more about how we worked with global telecommunications giant Lumen to ensure its compliance with MTD.
