As we approach the end of the Making Tax Digital for VAT (MTD) soft landing period, now is a...
On the 1st of April the soft landing period for Making Tax Digital (MTD) compliance ends. Many are referring to this as ‘Phase Two’ but this is a bit of a misnomer, we are not talking about a new phase so much as actual enforcement of the first phase, the soft landing specifically referred to the lenient (and more importantly non-punitive) approach taken by HMRC since the original rollout of MTD in 2019.
Given this period of grace was due to end last year and was extended for a year as part of the governments pandemic response, you are unlikely to get a sympathetic response from HMRC if you are still not compliant in April. With this in mind, it is worth taking a moment to ask yourself a few questions:
- Are you recording your all sales and purchases digitally?
- Are they recorded only once?
- Is your software compliant? Does it record VAT correctly?
- Are your customers, products, VAT rates, templates and reports setup correctly?
- Other than signing off, can you submit your VAT return without manual intervention?
If you answered ‘Unsure’ or ‘No’ to any of these questions you will shortly be risking a penalty, our MTD solution has a proven track record of delivering compliance for our IFS customers and, as always, this success is down to the right preparation.
Compliance has been built into our software from the ground up, we took the decision to create a cloud based solution so we can rapidly deploy updates whenever the requirements change and while the there are no immediate changes this time, further requirements are inevitable as HMRC have made no secret of their ultimate ambition to create a ‘real-time’ tax system.
And software is only half the story, configuration and process matter profoundly so prior to any MTD install, our experts will take you through a full Readiness Assessment to ensure you are setup and configured correctly. If you are concerned your current MTD process is not meeting the full HMRC requirements, peace of mind is only a phone call away!