Making Tax Digital for VAT

What is Making Tax Digital for VAT?

HMRC is changing the way you submit your VAT Returns. Most 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 first VAT return period starting on or after 1st April 2019.

If your business has a turnover below the VAT threshold you may still voluntarily sign up for MTD, in fact HMRC is encouraging this.

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

What is the Deferral Group?

HMRC have announced a deferral date for businesses who meet certain criteria which you can check here. If you meet the criteria this will mean you must be MTD compliant from your first VAT return period starting on or after 1st October 2019.

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

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). Please ensure you are up to date with your VAT returns before signing up to MTD.

I am a KashFlow User

  1. Sign up to MTD for VAT. Please note, once you complete the sign up process you must wait for confirmation via email from HMRC before completing the next step, which may take up to 72 hours. Failure to do so may result in set up issues.
  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 must wait for confirmation via email from HMRC before completing the next step, which may take up to 72 hours. Failure to do so may result in set up issues.
  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.   You will need to enable the client to submit via MTD by going to Settings> VAT Settings and set the option for “I have signed-up for MTD” as “Yes”.

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.

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