Supporting you through the latest MTD changes
From 1st April 2021, HMRC are fully implementing the digital links requirements of MTD, which had previously been postponed due to Covid-19.
Here, we walk you through the rules that are now being implemented and what that means for you.
Does this affect me?
Yes, if your taxable turnover is £85,000 or above. You can read the rules by clicking the button below.
From 1st April 2021, HMRC have legal authority to impose penalties on any business that does not comply with MTD regulations.
What can I do?
You should now be using MTD compatible software like Farmplan Business Cloud. Contact us today to learn more.
What are the rules?
If your taxable turnover is £85,000 or above, these rules apply to you.
UK VAT registered businesses with turnover above the £85,000 threshold must keep and maintain VAT records digitally in “a compatible software package that allows you to keep digital records and submit VAT Returns” or use “bridging software to connect non-compatible software (like spreadsheets) to HMRC systems”.
This digital record keeping requirement is compulsory for all VAT periods beginning on or after 1st April 2021.
Bridging software will now only be allowed where there has been no manual manipulation of the data recorded.
Under MTD a business is required to keep digital records of all the transactions which make up the figures reported in the VAT return. Where more than one system is used to record these transactions, the systems need to be linked digitally, so that data is not manually moved or combined before submission.
HMRC have specified that Digital links can include:
- Using formulas to link cells in spreadsheets
- Emailing records
- Putting records on a portable device to give to a stakeholder
- Importing and exporting XML and CSV files
- Downloading and uploading files
Digital should NOT involve:
- ‘Cut and paste’ methods of moving data
- Any manual modifications of data
From 1st April 2021, failure to adhere to these regulations will put your business at risk of penalties.
The penalties will apply to the first completed VAT return on or after this date. It is therefore important that you understand your obligations and ensure you are fully compliant.
What can I do?
Speak with our team today. We were proud to support our customers through the initial stages of MTD, and we are here to support you through these latest obligations.
By using compatible accountancy software, such as Farmplan’s Business Cloud, you have a secure connection with HMRC systems allowing you to submit the relevant figures to calculate your VAT payments at a click of a button.
Furthermore, our software has been specifically designed and approved by HMRC to enable you to combine data digitally from more than one dataset, making it easy to meet the latest requirements.
It’s then a simple 3 step process:
- Update your software to the latest version which includes the MTD functionality (no extra cost for existing customers) and follow the MTD set-up wizard.
- Sign up to MTD on the HMRC website
- Once HMRC confirms you’re signed up, go back into your accounts software and finish the set-up.
Our team are here to help. Get in touch today
Farmplan is an agent of Plaid Financial Ltd., an authorised payment institution regulated by the Financial Conduct Authority under the Payment Services Regulations 2017 (Firm Reference Number: 804718). Plaid provides you with regulated account information services through Farmplan as its agent.