HMRC and software companies have been urged to reveal information about those software packages that are compliant with Making Tax Digital (MTD). Such packages will need to be available in just five months’ time.
1 April 2019 is the earliest time for MTD to go live at firms with VAT above the threshold, but according to The Association of Taxation Technicians (ATT), firms should have their software in place well ahead of schedule to avoid major headaches.
ATT said: “The first businesses to come into MTD will be those with a VAT quarter running from 1st April to 30th June 2019. [But] if they happened to have a 30th June year end, they will need to have an MTD-compliant accounts package in place by 1st July 2018, or risk changing their accounting package mid-year”.
That could cause major headaches as when those affected come to do their tax returns or accounts, the information needed would be spread over the two systems. That would make it difficult for companies to get a clear and concise in-year view of their profitability.
HMRC has said there will be an online tool which will help businesses to identify which software packages would meet their MTD needs; however, the tool is not yet available.
Yvette Nunn of ATT said: “The ideal solution would be for the MTD for VAT start date to be altered so that it applied from a business’s first accounting period (and not VAT quarter) starting on or after April 1st 2019”.