Making Tax Digital

From 1st April 2019, the HMRC Making Tax Digital VAT scheme goes live. Promar’s Farm Business Accounts service will be fully compliant with the legislation.

 

Unsure about the what the Making Tax Digital (MTD) changes mean for you? Read our Q&A below for answers to some commonly asked questions.

If you would like to learn more, please contact us via: GB-Promar-TaxDigital@genusplc.com or phone our head office on: 01270 616 800

 

Q: What is the Making Tax Digital (MTD) scheme?

A: It is a fundamental change in the way VAT records must be kept and the way VAT returns are submitted to HMRC. Following Making Tax Digital (MTD) all records required for the completion of each VAT return must be kept digitally on what is described as ‘functional compatible software’. You will no longer be able to maintain a manual cash analysis book and use this to prepare your VAT return. Your return must be submitted through compatible software, for example Promar’s Farm Business Accounts.

 

Q: Who is affected?

A: All VAT registered businesses with a turnover above the £85,000 threshold will have to comply.

 

Q: When do the changes take place?

A: The scheme is scheduled to go live on 1st April 2019 so businesses need to make sure they are compliant by the end of March 2019.

The MTD VAT rules apply to the first VAT period starting on or after 1st April 2019.

For Monthly VAT returns, April 2019 VAT return figures will be the first to be submitted digitally.

For Quarterly VAT, depending on your frequency:

FIRST MANDATORY MTD FOR QUARTELY VAT RETURN PERIOD  

RECORDS MUST BE KEPT DIGITALLY FROM:  

1 April 2019 - 30 June 2019

1 April 2019

1 May 2019 – 31 July 2019

1 May 2019

1 June 2019 – 31 August 2019 

1 June 2019

 

Q: How do farmers set this up with HMRC?

A: Every compliant business needs to subscribe to MTD to submit their returns via their compliant software. You can either complete this through your HMRC log-in, or if you decide to use Promar Services to complete your accounts, then we can subscribe for you.

 

Q: How will the changes affect how our farm office operates?

A: You will need to change to a functional compatible software, such as Promar’s Farm Business Accounts, which links automatically with the HMRC VAT system and updates the VAT return with no manual intervention.

Our software can keep all required records in a digital format, create a VAT return from those records and provide HMRC with that information digitally. It is also able to receive information from HMRC about the business’s compliance records, which is another requirement for the compliant software

You aren’t being asked to record anything different or additional, only the way you record it is changing.

 

Q: I already have a financial software package.  Can’t I just use this?

A: Many older, existing computer systems will not be compliant and will need upgrading or replacing. It is important to check your current method of calculating and recording VAT is MTD compliant. We at Promar have an MTD-compliant software, so if you join us, we can maintain compliant accounts on your behalf, taking the problem off your hands. However, there is other compliant software which are listed online here: https://www.gov.uk/guidance/software-for-sending-income-tax-updates.

 

Q: MTD relies on broadband.  In many rural areas broadband is slow and unreliable. What is the solution in these cases?

A: A solution to unreliable or poor broadband services would be to use one of our Farm Business Analysts to submit VAT returns for you.

 

Q: Where do I get MTD compliant software and what does it cost?

A: We at Promar offer MTD complaint software with prices varying depending on you and your business requirements.

Our software is agriculture-specific, meaning the output provided is tailored to your farm business needs. We can regularly analyse cashflows, creditors and debtors, gross margins; as well as produce a Management Accounts pack at the end of the year, something that few other services can offer. This provides added value for your business, meaning you can make decisions based on facts and figures.

To find a package tailored to your needs, please contact us as below.

 

For more information or pricing, please contact us via:

GB-Promar-TaxDigital@genusplc.com

Or phone our head office on: 01270 616 800

 


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