If your business currently uses a software package for all VAT records, then you need to check that the software is MTD-compliant and that you are using an up-to-date version that is MTD-compatible. Assuming the package is MTD compliant, then there should be minimal changes that you need to make under MTD.
However, if the software you use is not compliant, then you will need to look at what options are available to you to comply under MTD – and we’d suggest you do this well in advance of the April 2019 deadline!
If your business does not currently use software to maintain records, the new MTD regime will mean you may need to make significant changes to your business systems and working practices to allow you to move from a manual to a digitalised process.
Businesses must use software that can connect to HMRC’s systems via an Application Programming Interface (otherwise known as an API) to comply fully with MTD and must be able to:-
• Keep and preserve digital records in accordance with MTD regulations
• Create a VAT return with digital information held by the software in order to send this information electronically to HMRC
• Provide certain VAT data albeit on a voluntary basis to HMRC
• Receive information from HMRC via the API platform with regard to an entity’s compliance with obligations under MTD regulations.