Making tax digital: answering your questions
What is Making Tax Digital?
Making Tax Digital (MTD) is an initiative from HMRC. The aim of MTD is to digitally integrate the financial records of all VAT registered businesses, with an annual turnover above the VAT registration threshold (£85,000), with the HMRC tax collection system via MTD compliant software. The overall goal is to reduce user errors in manually entering figures and ultimately make the UK tax system more effective, efficient and easier for taxpayers.
When is this happening?
From 1 April 2019, VAT registered businesses with turnover above the £85K threshold must use MTD compliant software to submit all figures required to complete a VAT return. The information used to obtain these figures must be held electronically, however this can be in separate systems.
What does this mean for my Practice Management System?
Your Practice Management System (PMS) holds information relating to sales processed through the PMS only. Figures for all sales processed through your PMS can already be extracted via various reports and therefore there is no requirement to make changes to support MTD for Phase 1 in April 2019.
How do I print or export reports?
Period end summary report.
This report should be available the day after the Accounting Closed Date has been set.
- All reports > Financial > Period End Summary > Run
- Print or export
We recommend you run the Transaction Type Analysis report. To run this report please follow the steps below.
- Reports > Select B.Accounts, Debtors & Tax > 5.Tax > Transaction Type Analysis > Run
- Print or export
What do I need to do before April 2019?
Prior to 1 April 2019, you must ensure that you are able to submit your VAT returns using MTD-compliant software. It will no longer be possible to submit VAT returns using HMRC’s own VAT online services on the HMRC website. For more information or advice we would urge you to speak to your accountant or financial adviser.