How Do I Submit My VAT Returns Digitally To Comply With Making Tax Digital?
Changes can be difficult and overwhelming. Especially when they affect a bigger area of your business. New rules under Making Tax Digital for VAT (MTD) mean changes to some business records, bookkeeping processes and how VAT returns are submitted. To make this easier, we’ve prepared this useful article about submitting VAT returns under a new regime.
First things first- software
You need either accounting software that is MTD-ready or bridging software. The software has to have an ability to link your VAT return data with your HMRC VAT account. Accounting software lets you do other accounting and bookkeeping things within your business, e.g., raising sales invoices, reconciling bank accounts etc. Bridging software is used if you use spreadsheets for your bookkeeping needs and need to submit your VAT returns digitally to HMRC. If you’d like a chat about accounting software, get in touch with our accountants from Oxford.
Registration with HMRC for Making Tax Digital for VAT
If you’re VAT registered, it doesn’t necessarily mean you’re registered for MTD. To be able to submit your VAT returns digitally to comply with the new rules, you need to be registered. Head to HMRC website and register your business for Making Tax Digital for VAT.
Software and HMRC connection
Once you’re registered for MTD for VAT, link your accounting or bridging software to your HMRC MTD VAT account. For the detailed instructions on how to do this, please refer to your software provider. This is quite a straightforward and quick process. If you use popular software like for example Xero accounting software, you will find useful videos on YouTube.
Finalise bookkeeping for the period you want to submit your VAT return. Whether it’s done in a spreadsheet or your accounting software, make sure you perform the final checks that include checking the correct VAT rates. It’s easy to sometimes apply a wrong rate to a transaction when doing bookkeeping. Checks before VAT return submissions can help spot these mistakes easily and correct them.
Submit your VAT return to HMRC
Once you’re happy with the VAT return and all the transactions, you can submit your VAT return to HMRC. If your business is bigger and it’s not only you, it’s good to have someone else in the process to review the VAT returns and authorise them for submissions. This can prevent mistakes done by accident or serious things like for example fraud. It’s never a good idea to have one person doing everything in a business when it comes to accounting. Submitting your VAT returns digitally is really easy and usually involves one or two clicks. When you do it once, you will be more confident with the subsequent VAT returns.
What if I need help with my VAT returns?
If you need help with your business’s VAT returns, you can ask for help either a bookkeeper or an accountant. You don’t have to commit to an on-going service if you’re only stuck with one thing. Our accounting practice offers one-off services if this is what you require.
Contact our accountants from Oxford today for a friendly chat about your accounting or bookkeeping needs.
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