Further details about the implementation of MTD are emerging every day. In our newsletter on 8 February 2018 we outlined how a combination of spreadsheets and MTD-compatible software will meet the requirement for keeping digital records, if all the links between the various packages or spreadsheets are digital.
However, as there is very little time to get the various accounting packages talking to each other, HMRC will allow businesses to make non-digital transfers of data between software packages and spreadsheets during a “soft landing” period. HMRC expect this period to last no more than 12 months, and they will not impose penalties in that period for failing to comply with the digital records regulations.
All businesses will be expected to use commercial software, or to develop their own in-house bespoke software, in order to comply with MTD, as there will be no free software provided by HMRC. Businesses who use bespoke software need to register with HMRC as software developers in order to gain access to the APIs to write into their own software.
The live pilot testing of MTD-compliant software will start in April 2018. HMRC will invite businesses to join this pilot, drawing from the list of those who have applied. The simplest businesses will be asked to join first, and more complex businesses will be invited to join as the pilot advances. Agents will also be invited to take part in the pilot. We will be able to subscribe you into MTD and submit VAT returns on your behalf.
Written by the Tax Advice Network