The new rules for Making Tax Digital (MTD) came into effect on 01 April 2021, but what does this mean in terms of your VAT return processes?
Now is the time to review the VAT return processes and test them to ensure that you will be Phase 2 MTD compliant. Previously, VAT returns did not need digital links between the accounting software and VAT workings to be MTD compliant. However, for periods starting on or after 1 April 2021, digital links are required between all elements of the VAT return. Once the source document (invoices, expenses, import statements etc) are entered into the accounts system the digital link to the VAT submission must be maintained. There are a few exceptions that allow some manual process but these are limited. HMRC are clear that manual typing of figures or totals and cut and paste of information is not acceptable under the digital records rules and therefore, where possible formulas/pivot tables should be used.
We have included a table on the next page which outlines the VAT return by which you must be fully compliant, depending on when your VAT returns are normally due. It also shows the current VAT return which can be used as trial run for checking Phase 2 MTD compliance.
Our webinar provides an update on the latest position, incorporating all of the new information that has been issued by HMRC. We focus on practical issues and practical actions that Housing Associations are facing now MTD is in full effect.
View our latest MTD webinar in which we
covered all the important information to make
sure housing organisations are prepared for
the MTD phase 2 'hard landing' period.