Making Tax Digital – MTD – Soft Landing Period

The extended 12 month soft landing period for Making Tax Digital (MTD) has ended for VAT accounting periods starting on or after the 1st April 2020.

Those who had VAT periods beginning 1st October 2019 were eligible for the deferred start date for Making Tax Digital.

They can continue to benefit from the soft landing period until their first VAT period beginning after 1st October 2020.

During the soft landing period, businesses to whom MTD is applicable should have been storing their accounting records digitally.

Digital Records:

The digital records need to include:

  • The business name, address, VAT registration number and details of any VAT scheme used
  • For sales made: the time of making and value, the VAT rate applicable, and a split of the values per VAT rate
  • For purchases, the time of purchase, and a split of the VAT charged
  • Also, any data to support the return, such as output VAT, reverse charge VAT, any adjustments required and so forth.

This means you need to submit your data using one of the approved sources.

A non-exhaustive list of examples, provided by HMRC, includes:

  • Emailing a spreadsheet containing digital records to import the information into another software product
  • API transfer
  • Download and upload of files (XML, CSV etc)

The digital link is unlikely to be a problem for any businesses who already use accounting software. This is especially true if their VAT returns are fairly straightforward. Most accounting software packages have already adapted to include Making Tax Digital modules for their customers.

HMRC allows some adjustments and calculations outside the digital requirements, but you need to ensure that you only treat allowable adjustments this way.

If you want to find out more about Making Tax Digital, and ensure that your businesses is ready for the end of the soft landing period, contact us today.

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