Individual sales and purchases need to be recorded and maintained on a digital platform. Simply totalling sales and purchases from manual records and recording these summaries digitally is not MTD compliant.
However, businesses do not have to scan and keep electronic versions of all sales and purchase invoices
There needs to be a digital link between relevant spreadsheet tabs, software packages etc. Copy and paste is not a digital link. There needs to be a digital thread from the initial entries of individual sales and purchases through to the final submitted figures to HMRC.
Whilst spreadsheets are MTD compliant, you will also need “bridging software”. This is a piece of software that takes the nine figures for the VAT return and automatically transfers them to HMRC’s MTD portal (not the current portal used for VAT submissions).
Previously MTD was only compulsory for VAT registered entities with a taxable turnover over the VAT registration threshold of £85,000. For VAT returns starting on or after 1 April 2022 (almost), all VAT registered entities will need to use MTD compliant methods to record and submit their VAT figures
You can apply to HMRC for an exemption from MTD. This must be on grounds of age, health (for example having sight issues), location (somewhere with no internet) or religious grounds (but not setting up your own religion - it’s been tried and it failed).
Rickard Luckin can help
We can help in setting you up with a software provider that is MTD compliant (we even get discounts for clients depending on the software). We also have bridging software to help with that last step between your records and HMRC’s portal, an advice for all points in between. We have also successfully applied to HMRC for an exception to MTD for a client, so if you think you should be an exception rather than a rule please contact us.
This article is from the latest edition of our Agricultural Briefing. To receive future copies of any of our newsletters directly to your inbox, please visit our preference centre to register your interest.
If you have any questions about the above, or would like more information specific to your circumstances, please enter your email address below and we will get in touch: