MTD for VAT: Is my software compatible?
With MTD for VAT arriving for most VAT registered businesses in April 2019, we have been asked many times what software is compatible.
The compliance for MTD is twofold;
- Digital record keeping
- Submission of the VAT return from compatible software
All accounting software is compliant in terms of record keeping, but its not necessarily going to be compliant in terms of submitting the VAT return to HMRC.
Quickbooks Online, Xero, Sage Business Cloud, Free Agent, Kashflow who are the best known cloud accounting solutions, are all MTD compliant. Therefore, if you are using these then you are fine. It is expected (but not certain) that most cloud accounting software will be compliant by April 2019.
The latest version of Sage 50c and Quickbooks Desktop will be compliant but older versions will not. If you use an industry specific software, or another software not named in this article it is important to check if your software will be MTD compliant.
How to check if the software is compliant:
You can review the software listed on HMRC’s dedicated page or you can contact your provider direct. Many software companies are charging an expensive upgrade fee to meet the requirements and some are not intending on complying at all.
What if my software will not be compliant:
Bridging software is a solution for those who can’t submit their VAT returns through their software. The process is that the VAT summary generated within your software would need to be downloaded to excel and then digitally linked to bridging software. The bridging software then submits the return to HMRC.
MHA Chiks will be able to license bridging software to their clients. We will be sharing details on how this works together confirmation of the cost of the licenses in the new year. Please email Judith Dugdale, Head of Digital Solutions for more details.
Can I use Excel?
Yes you can use excel, but you will need to purchase bridging software as noted above, to submit your return.
I am still using manual records!
Its is really important to get advice as soon as possible to ensure that you have migrated to a digital system by 1 April 2019. Please get in touch with Judith Dugdale, Head of Digital Solutions, if you require assistance in implementing a new accounting system.