A Bridge Over Troubled VAT-er
The Making Tax Digital (MTD) for VAT pilot started back in October 2018, with the new rules being mandated in April 2019. MTD requires businesses above the VAT threshold (excluding exemptions) to keep digital records and submit their 9 box VAT return via new API’s, either through bookkeeping software or bridging products.
From April 2020 or September 2020 for deferred businesses, HMRC will expect data entered into the VAT return submission to maintain a digital link with the underlying transactional data.
A full list of what constitutes a digital link can be found on the VAT notice 700/22. Two examples of how you could use a Digital Link are as follows;
- Example 1: Transactions stored in spreadsheet, sum cells, link to VAT return 9 boxes, import spreadsheet to bridging product to submit.
- Example 2: Download summary VAT data from bookkeeping software, make adjustments in spreadsheets, link cells to VAT 9 boxes and submit.
Contrary to some developer material that has suggested bridging products will be unsupported after 2020 HMRC have no plans to stop supporting bridging solutions.
HMRC in recent correspondence to developers: “We would appreciate you ensuring that your messaging around bridging products is clear and accurate”
The complex nature of some business models makes bridging solutions the most practical option in some scenarios, and My Digital Bridge is here to support all businesses with VAT submission.
Sign up here or get in touch to speak to one of our experts – 0161 925 6162