This update focuses on the important aspects and changes to Making Tax Digital for VAT (MTD) which non profits need to be compliant with for the imminent ‘hard landing’ on Thursday 1 April 2021.
Since being introduced on 1 April 2019, MTD has become a fact of life for most VAT registered organisations. However, the current rules are only the ‘soft landing’ period, where only records and VAT return submissions are required to be digital. From 1 April 2021 the much delayed ‘hard landing’ will come into effect and with it a new set of much tougher rules.
The MTD hard landing rules are deceptively simple, “From 1 April 2021 VAT registered organisations will need to have digital links between software programs”. This does mean that there will need to be a digital link from when a transaction is first recorded on a digital format all the way to the digital submission of the VAT return figures to HMRC. You will no longer be able to copy/paste values or hard code between one piece of accounting software to another.
As the new rules relate to how transactions are recorded and linked within the accounting system(s), you will need to ensure that you are compliant from the very start. For many, this leaves only two months to check that your processes will be MTD compliant and to update them if they are not.
There is some good news - there are a number of easements to the rules for charities, for example:
If you aren’t sure that your processes are MTD compliant then now is the time to check. Nine process out of ten being compliant will still mean that you are not compliant overall. Our team has experience of reviewing VAT return processes to identify any gaps and providing practical, cost-effective solutions to be fully compliant with the new rules.
Please get in touch with Rob Warne, or usual VAT contact to discuss your MTD compliance in greater detail.
Tuesday 23 February 2021 | 10:00 - 11:00 am
Our VAT specialists will be covering all the important information to make sure you're prepared for the MTD 'hard landing' period. You'll also be able to take part in a live Q&A.