Making Tax Digital delayed until 2021
9th January 2021
Due to the Coronavirus pandemic, Making Tax Digital has seen further delays, at-present, only VAT registered businesses with a taxable turnover above the VAT threshold (£85,000) must comply with MTD reform. However, all VAT registered businesses will be expected to file their tax returns digitally from April 2022.
From the 1st April 2019, all VAT registered businesses with a turnover of over £85,000 and above were required by law to submit VAT returns using MTD compliant software. If you use an Accountant please contact them to ensure that they are MTD compliant. If you normally submit your own VAT returns we hope we can explain in this article and can provide some information and guidance to help you become MTD compliant.
What is Making Tax Digital?
At present, most businesses submit their VAT returns through manually re-keying data into HMRC’s online portal. This will no longer be permitted once MTD comes into force and instead, VAT return submissions must be submitted digitally via HMRC’s Making Tax Digital API. Businesses will be required to keep a digital audit trail of the VAT return detail and submit through compliant software.
Making Tax Digital has the force of the law and is, therefore, a compulsory requirement.
Impact on Sellerdeck Desktop customers:
Sellerdeck Desktop is not an accountancy platform and does not hold the full data set required to successfully submit VAT returns to HMRC therefore, our software itself is not a solution.
If you use an Accountant to manage your VAT returns:
Please contact them and ask if they are using an MTD compliant package (almost certainly they are). In this situation, it is unlikely to require any work for this initiative unless instructed by your Accountant.
If you submit VAT returns yourself:
You will need to be using MTD compliant software. In this situation, you will need to contact your provider to ask if the version of the software you are using makes you MTD compliant.
There may be additional costs to upgrading to MTD compliant versions, so ensure you weigh up the costs and benefits of upgrading as you may find it cost-effective to use ‘Bridging Software’ (which we will get to in a bit).
Sage Line 50
A significant number of our customers benefit from the Sage Link and use Sage to manage their accounts, including gathering information for their VAT return submission.
- The latest version (v25) of Sage Line 50 (Desktop version) is MTD complaint.
- Older versions of Sage Line 50 (Desktop version) are not MTD compliant. If you are not using v25 you can either upgrade, paying the subscription fee or if you are happy with your current version and do not want to take on the additional ongoing cost of upgrading to v25 you can use a ‘Bridging Platform’ to become compliant.
Excel Spreadsheets
If you are using a spreadsheet then you are able to continue to do this but you will have to use a ‘Bridging Platform’.
What is a Bridging Platform?
Bridging platforms are a way for you to digitally communicate with HMRC’s systems for Making Tax Digital purposes. As the process between the non-MTD compliant format (i.e spreadsheet) to the bridging software, to the Government Gateway is all digital, therefore you will become compliant.
A full list of compliant MTD platforms and Bridging software can be found on the HMRC’s website.
[button link=”https://www.gov.uk/guidance/software-for-sending-income-tax-updates” type=”big” newwindow=”yes”] Full list from HMRC[/button]
A suggestion for Sellerdeck customers using older versions of Sage Line 50 & non-compliant formats (i.e. excel)
We have taken some time to meet with BTCSoftware. They have a very similar ethos to Sellerdeck where they understand and appreciate the simplicity and low-cost requirements for busy businesses.
BTCSoftware has created BTCHub and MTD Digital Filing Solutions which will allow you to bridge with an Excel spreadsheet or your current accountancy platform. Their offering can be purchased as an annual licence starting from just £50+VAT.
BTCSoftware has expressed that they want to provide a solution and support for Sellerdeck customers and have arranged for Sellerdeck customers’ to have exclusive access to a webinar on MTD, if you were unable to attend the webinar please click on the button below to view the video.
[button link=”https://www.youtube.com/watch?v=YGBF8HbZxTM” newwindow=”yes”] BTCSoftware MTD webinar[/button]
If you decide to purchase BTCSoftware, either the BTCHub or MTD Digital Filing Solutions, please ensure that you select ‘Sellerdeck’ in the referral as this will ensure you have the appropriate support from BTCSoftware as they will know immediately which eCommerce platform you are using.
What is Sellerdeck’s role in this?
We want to be helpful and offer some direction to our customers which is why we have suggested looking at BTCSoftware as a helpful resource.
Our direct involvement is minimal, as this falls outside our remit and expertise. We are not an accountancy agency and cannot offer advice or recommendations as we do not feel we have enough knowledge to give quality answers.
Although we have taken time to educate ourselves on MTD we would advise you to also research the topic, the BTCSoftware webinar would be a great place for you to get a better understanding as they have been working closely with HMRC over the last 3 years on MTD.