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Read Now: Making Tax Digital for VAT checklist: How to get up to speed with MTD for VAT – 101 Latest News



Making Tax Digital for VAT checklist: How to get up to speed with MTD for VAT

#Making #Tax #Digital #VAT #checklist #speed #MTD #VAT

The digital tax revolution is here.

If you have a VAT-registered business, you must use Making Tax Digital (MTD) for your VAT accounting.

You need to submit VAT Returns using “functional compatible software” and digitally store your VAT accounting records.

This Making Tax Digital checklist will help you get up to speed with MTD for VAT.

And that’s really important because HMRC is contacting businesses that should be following Making Tax Digital ahead of them filing their first VAT Return using MTD for VAT.

If your next VAT Return submission is on the horizon, you’ll want to take note.

The critical thing to know is that it’s no longer be possible to submit VAT Returns manually via HMRC’s website. You must do it with software.

This is a significant change from before, and you need to know how to make a Making Tax Digital VAT Return submission.

This Making Tax Digital checklist covers the following:

Figure out if your business is impacted by MTD for VAT

If your business is VAT-registered, you need to use Making Tax Digital for VAT.

Making Tax Digital is about more than merely filing your VAT Return digitally. You’re also legally required to digitally store some of your VAT information (known as digital record keeping).

And if you use more than one piece of software to store your VAT information and do your VAT return, they must be “digitally linked”.

The transition might have been relatively straightforward if you were already using accounting software.

It could involve little more than signing up for MTD for VAT, then activating the feature in your software.

Alternatively, your accountant might have done this for you.

However, this might not have been the case if you had used older software. You need functional compatible software.

If you’re using spreadsheets or other manual records to prepare your VAT Return, you should have replaced this with a software-driven approach for recording VAT details and filing VAT Returns.

Exemptions and deferrals from MTD for VAT

Some businesses can claim exemption from MTD for VAT because HMRC accepts they’re considered digitally exempt.

This includes people whose religious beliefs are incompatible with the requirements or those whose age, disability or remoteness mean it’s not reasonably practical for them to use digital tools.

Insolvency procedures also affect MTD for VAT.

Get in touch with HMRC via its VAT helpline for more information and arrange alternative measures.

Work out which business processes to adapt for MTD for VAT

You should look at all your processes around generating your VAT Return. While this might be time-consuming, the investment might be necessary to avoid penalties.

Here are some examples:

  • How do you raise sales invoices?
  • How do you capture expenses?
  • Do you use a cash accounting scheme, or are you invoice-based?
  • What other areas of your VAT accounting are still paper-based or exist outside of your accounting software?

For example, while Making Tax Digital for VAT doesn’t mean you can no longer create paper-based notes or invoices.

It means some of the invoice-level data has to be transferred into your MTD-compatible software.

You can no longer update your accounting software with the monthly total of all invoices.

If you have access to an accountant, you might find it beneficial to speak to them about these issues and potentially use their experience to review your existing processes efficiently.

If your business uses an alternative VAT scheme such as the Flat Rate, Retail or Margin Scheme (including the Tour Operators Margin Scheme)—or group VAT—your requirements and processes will be different.

Ensure you have functional compatible software for MTD for VAT

Use software compatible with HMRC’s Making Tax Digital for VAT programme.

In addition to keeping digital records relating to your VAT, the software should be able to communicate with HMRC’s computers so you can file your VAT Returns.

In technical language, this is sometimes referred to as “connecting to HMRC’s APIs”.

If you’re using desktop accounting software (installed on your computer and data is stored there—which can make data sharing harder), you might need to update it for MTD if you haven’t updated it recently.

Speak to your software vendor immediately about this.

Older software might not have been updated for MTD, so you may have to transfer your VAT accounting (at least) to more modern software to file returns.

If you’re using a cloud accounting software package (where data is saved in the cloud and accessible in real time on any device—computer, mobile phone, tablet), it should update automatically for MTD.

Although again, you may wish to speak to your software vendor for details on how to access the functionality.

If you keep your VAT records using a spreadsheet, it might be possible to use MTD-compatible bridging software to file returns.

But the process will not be as inherently robust or intuitive as using accounting software.

It’s so easy to delete data in a spreadsheet or break a formula accidentally—and it could mean you’re no longer legally compliant with MTD for VAT.

Despite rumours to the contrary—and despite the fact that MTD for VAT is legally mandated (and enforced with fines for failing to comply)—HMRC has never made any free end-user software available for MTD for VAT, or offered any software by other means, such as subscription.

Businesses must acquire functional compatible software from third parties.

Work out when to switch to MTD for VAT

MTD for VAT has been up and running since April 2019, so you can make the switch now.

You need to register for MTD for VAT and then activate the feature in your accounting software.

Final thoughts on Making Tax Digital

Dealing with business admin and compliance can be a challenge.

But while adapting to Making Tax Digital for VAT rules may seem like a burden, there are definite long-term benefits to be aware of.

You can efficiently deal with your VAT Returns and stay on the right side of HMRC.

Perhaps, just as importantly, you’ll have better visibility of your business finances and will keep good records, so you know how things are functioning at any time.

MTD for VAT will be a help, not a hindrance, to you and your business.

Editor’s note: This post was originally published in October 2018 and has been updated significantly in the time since.


Read Now: How do You Turn Employees Into Problem-Solvers? Follow This 3-Step Leadership Formula. – 101 Latest News



How do You Turn Employees Into Problem-Solvers? Follow This 3-Step Leadership Formula.

#Turn #Employees #ProblemSolvers #Follow #3Step #Leadership #Formula

Opinions expressed by Entrepreneur contributors are their own.

As a growth advisor, I work with leaders looking to grow and scale their businesses.

One of the biggest issues I found preventing companies from scaling was the fact that all the problem-solving was left up to the leader. If you took the leader out of the equation, it seemed that the team members lacked the agency to solve the problems on their own. And on top of that, some of the leaders often lacked the confidence in trusting their teams to make decisions.

So, what is the million-dollar answer to fixing this problem you ask? Well, it is not simple, but it certainly is worth the effort. If you want your company to scale and grow, you need to create high-functioning teams. And in order to do that, companies need to build a culture of problem-solvers. As a leader, it is your responsibility to create a space where your team members are not afraid to speak up, feel empowered and know what is expected of them. It is only then that you can effectively scale and grow your company.

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Read Now: What Is Cloud Encryption? How It Works, Benefits and Examples – 101 Latest News



What Is Cloud Encryption? How It Works, Benefits and Examples

#Cloud #Encryption #Works #Benefits #Examples

Data security and protection are the secrets to success for many businesses, and cloud data security providers are constantly evolving to offer the most advanced features. 


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Read Now: YouTube rolls back its rules against election misinformation – 101 Latest News



YouTube rolls back its rules against election misinformation

#YouTube #rolls #rules #election #misinformation

YouTube was the slowest major platform to disallow misinformation during the 2020 U.S. election and almost three years later, the company will toss that policy out altogether.

The company announced Friday that it would reverse its rules around election denialism, allowing some previously prohibited false claims, effective immediately. Axios first reported the changes.

“In the current environment, we find that while removing this content does curb some misinformation, it could also have the unintended effect of curtailing political speech without meaningfully reducing the risk of violence or other real-world harm,” the company wrote in a blog post.

“With that in mind, and with 2024 campaigns well underway, we will stop removing content that advances false claims that widespread fraud, errors, or glitches occurred in the 2020 and other past US Presidential elections.”

YouTube still won’t allow some kids of false election-related claims, like lying about the location of polling places and other specific efforts to dissuade people from successfully casting a vote.

“All of our election misinformation policies remain in place, including those that disallow content aiming to mislead voters about the time, place, means, or eligibility requirements for voting; false claims that could materially discourage voting, including those disputing the validity of voting by mail; and content that encourages others to interfere with democratic processes,” the company wrote.

There’s certainly an argument that, on the whole, denying the valid results of a presidential election ultimately does more to discourage people from voting than these more targeted hypothetical scenarios. But it doesn’t appear that allowing users to sow broad mistrust in the democratic process fits into the company’s definition of “real-world harm.”

Even if enforcement was challenging, it’s a strange choice to announce that it’s open season for U.S. election denial on YouTube, particularly with the 2024 race gearing up. The company plans to offer more updates around its 2024 election strategy in the next few months, so hopefully YouTube elaborates on its thinking or other planned precautions then.

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