VAT Soft Landing Period Ends 1st April 2021
Making Tax Digital and the requirement to keep digital records commenced on 1st April 2019. From this date until 31st March 2021 the VAT office allowed a period for businesses to have in place digital links between all parts of their functional compatible software.
Have you now got this in place? If not, you do need to take action before the 31st March to have a suitable system that the VAT office will accept.
The new rule has the force of law:
A digital link is an electronic or digital transfer, or exchange of data, between software programs, products, or applications.
The use of ‘cut and paste’ or ‘copy and paste’ does not constitute a digital link – except during the soft-landing period as set out in paragraph 3 of the next ‘force of law’.
For VAT periods starting on or after 1 April 2021 your systems must use digital links for any transfer or exchange of data between software programs, products or applications used as functional compatible software, as stipulated in legislation.
This means that any VAT quarters from 30th June onwards must have a digital means of transfer.
What does this mean for me.
If you currently use an excel spreadsheet for submission this is still an acceptable method of submission. But if you give your accountant figures only to be filed then this is no longer acceptable.
You will need to either start using an excel spreadsheet to record the data or better still implement a full digital bookkeeping system that records all your transactions.
This latter option will give your business more flexibility and will also mean that when the next stage of MTD is implemented which will be accounts data submission you are ready to go.
How we can help
We can offer clients reduced price licences on digital software like QuickBooks, Xero and Sage online and help you set up the system and if required provide training or even complete the book-keeping for us. Let us know what you prefer, and we will provide a quote.
If you are not ready yet to go to full digital records, then you will need to look at maintaining an excel spreadsheet which we can supply to you. This spreadsheet will link to our online system for submission of the return data. If you would like a copy of the spreadsheet please drop us an email.
The full details on the legislation can be found https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat
For more details please contact us on 01942322767 or email info@mcgintydemack.co.uk