Introduction
Making Tax Digital (MTD) is UK governments plan to streamline and modernise their tax system to make it more efficient and easier for customers to comply with their tax obligations. MTD requires businesses to record business transactions digitally and send a summary of those records to HM Revenue & Customs (HMRC) using API/bridging software either monthly, quarterly or on an annual basis. It is mandatory for business with tax turnovers above the VAT registration threshold from 1st of April 2019. Under MTD scheme, customers can interact digitally with HMRC to submit & retreive information via API/bridging software.
MTD requirements
- record business transactions in a digital form
- create a VAT return from those records
- submit all this information to HMRC digitally
- receive information from HMRC about your compliance
VAT return data
The following data is required to be submitted to HMRC under the MTD.
| Data | Description |
|
VAT due in this period on sales and other outputs |
|
VAT due on goods in this period on acquisitions from other EC member states |
|
Total VAT due (sum of boxes 1 & 2) |
|
VAT reclaimed in this period on purchases and other inputs (including acquisitions from EC) |
|
Net VAT to be paid to Customs or reclaimed by you (Difference between boxes 3 and 4) |
|
Total value of sales and all other outputs excluding any Tax. Incl Box 8 |
|
Total value of purchases and all other inputs excluding any VAT. Incl Box 9 |
|
Total value of all supplies of goods and related services, excluding VAT to EC |
|
Total value of all acquisitions of goods and related services, excluding VAT from other EC |
IP1 – MTD ready
IP1 is incorporating the following processes within the system to have it MTD ready.
- calculate MTD required data
- update excel spreadsheet with above information
- upload excel to bridging software to submit to HMRC
IP1 – MTD Process
