Making Tax Digital for VAT

What is Making Tax Digital for VAT?

HMRC is changing the way you submit your VAT Returns. From April 2019, VAT registered businesses with an annual turnover above the VAT threshold (currently £85,000) must keep their VAT records digitally and use Making Tax Digital (“MTD”) compatible software to submit their VAT returns.

If your business has a turnover below the VAT threshold you can still voluntarily sign up for MTD. HMRC is encouraging all businesses to sign up so they can benefit from MTD.

KashFlow is listed on the HMRC website as MTD for VAT compatible software which is available now.

What is the HMRC Pilot?

HMRC are currently running a pilot to give participants the opportunity to familiarise themselves with the system ahead of mandation in April 2019. Click here to find out if your business qualifies for the pilot.

Please note, once you sign up to MTD for VAT, you will no longer be able to submit your VAT returns through online filing or the HMRC portal (mark as submitted).

How do I submit MTD-compliant VAT returns through KashFlow?

I am a KashFlow User

  1. Sign up to MTD for VAT. Please note, once you complete the sign up process you should wait for confirmation via email from HMRC, which may take up to 72 hours.
  2. Connect your KashFlow account to HMRC using your government gateway user ID and password. To do this log in to your KashFlow account, navigate to Taxes > VAT > Connect to HMRC and follow the on screen instructions.
  3. Manage and submit your VAT returns by navigating to Taxes > VAT

I am a KashFlow Partner

  1. Create an Agent Services Account if you do not have one already
  2. Link your clients to your Agent Services Account
  3. Sign up each of your clients to MTD for VAT. Please note, once you complete the sign up process you should wait for confirmation via email from HMRC, which may take up to 72 hours.
  4. Connect your KashFlow Connect account to HMRC using the government gateway user ID and password issued when you created your Agent Services Account. To do this log in to your KashFlow Connect account, navigate to Settings > Connect to HMRC and follow the on screen instructions.
  5. Log in to your clients KashFlow account to manage and submit their VAT returns by navigating to Taxes > VAT

Our MTD Setup Guide for Agents will help guide you through steps 1 to 3 which must be completed on the HMRC website. You may also wish to refer to this HMRC step by step guide.

Videos are also available on the HMRC help and support page.

See how KashFlow works with your business and your books