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Making Tax Digital affects all VAT registered businesses from 1 April 2019. But when you need to file your first Making Tax Digital VAT Return depends on your VAT quarter end dates.
When to Submit your First Making Tax Digital VAT Return
Here’s the official HMRC Making Tax Digital dates you’ll need to use to work out when file your first MTD VAT Return:
- Quarters ending January: first MTD VAT Return is due 07/19
- Quarters ending February: first MTD VAT Return is due 08/19
- Quarters ending March: first MTD VAT Return is due 06/19
- For monthly VAT Returns: first MTD VAT Return is 04/19
What You Need to Do to Submit Your First Making Tax Digital VAT Return
Digital Record Keeping means entering every sales and purchases transaction that make up the figures on your VAT return, one by one into an HMRC approved bookkeeping software.
This means if you add your VAT up either manually from your invoices or with a spreadsheet, then input the figures into a VAT return on the Government Gateway, you’ll need to make some changes.
For each sales and purchases transaction you’ll need to record:
- Date or Tax Point
- Value of Supply
- Rate of VAT used
Approved Making Tax Digital bookkeeping systems, like Quickbooks, all require you to enter this information as standard.
Your bookkeeping system will then work out your VAT figures and transmit them straight to HMRC from the system (once you approve the figures).
Making Tax Digital and Business Record Keeping
Making tax digital does not affect how you keep copies of your business sales and purchase invoices.
That part of business record keeping remains unaffected.HMRC don’t want to see all your invoices each time you submit a tax return, they just want to know that you have used one of their approved software to work out your VAT.
What Should You Do Now
If your small business is VAT registered and use a non approved or manual bookkeeping system like a spreadsheet them you may need to start considering how you are going to be affected from 1 April 2019.
Here’s what you need to think about:
- The date you need to submit your first MTD VAT Return;
- How you plan to Maintain Your Books Digitally using an approved bookkeeping software;
- Plan your transition to Digital Record Keeping.
- Read my 3 Point Checklist to Getting Your Small Business Making Tax Digital Ready.
Anita is a Chartered Accountant with over a decade of experience taking self-employed business owners from financially confused to business savvy.
She is the creator of the ‘Go Self Employed’ website, which is her corner on the internet where she makes self-employment less terrifying.