Making Tax Digital – What you need to know

HMRC are changing the mechanism by which you file your VAT Return and, for your first Return after 1 April (i.e. for those filing quarterly the VAT period ending 30 June onward), you must file under Making Tax Digital (MTD).

The ruling only applies to those VAT registered organisations over the VAT threshold (currently £85,000) although those under the threshold may also elect to also file under MTD.

Currently this only applies for the filing of the VAT100 and not the ECSL (VAT101).

Whilst still described by HMRC as a ‘pilot’ you can register now and start filing under MTD but, before doing so, there are two actions required:

1. Register on the HMRC website for Making Tax Digital (MTD);
2. Authorise Liberty Accounts to file your Return.

Below we outline the actions required.

Registering for MTD with HMRC

If you’re not yet registered on the HMRC website for MTD filing then please watch the following video from HMRC detailing the action required.

Authorising Liberty Accounts software

Having completed the first step you can now authorise Liberty Accounts software. Note that you should allow a few days for HMRC to update your details and they have sent you a confirmation email before completing this step.

Note that the authorisation, as defined by HMRC, is for a period of 18 months and will have to be renewed in the future – this is only for the authorisation of the accounting software and not the HMRC registration.

Still unsure if this applies to your organisation?

For further information on which organisations it will affect and how it will affect you please watch the following MTD video from HMRC.

For Liberty Accounts users, once registered and authorised, there will be no visible change on submission – it’s simply what’s happening ‘under the covers’ that is different.

Currently the data filed under MTD is the same as under the current mechanism i.e. only the summary data detailed on the VAT100 submission page.

Liberty Accounts are continuing to support the current mechanism for filing for VAT registered businesses under the threshold if they elect not to file under MTD.

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