With the World Cup, Wimbledon and Parliamentary turmoil over Brexit grabbing most people’s attention lately, you could be excused for missing the odd announcement on other things, here and there.
Kind people that we are, we’re keen to ensure this one doesn’t escape your attention.
It’s all about HMRC and important new details that officials have just released about Making Tax Digital.
They’ve given you plenty to read, that’s for sure. A news release on Friday 13th – unlucky for some – set out three long documents.
The longest, and arguably most significant, was a new HMRC VAT Notice.
HMRC also released a list of software developers it’s working with during the MTD VAT pilot – including Keytime’s parent company IRIS.
Third was a communications pack for accountants to use when educating clients about MTD.
One of the sections that may interest readers of this blog most was the introduction of ‘digital links’. Not familiar with this phrase? It could be one you need to get used to. Officials had this paragraph to explain what they meant:
“A ‘digital link’ is one where a transfer or exchange of data is made, or can be made, electronically between software programs, products or applications. That is without the involvement or need for manual intervention such as the copying over of information by hand or the manual transposition of data between 2 or more pieces of software.”
The document further explained: “Once data has been entered into software used to keep and maintain digital records, any further transfer, recapture or modification of that data must be done using digital links. Each piece of software must be digitally linked to other pieces of software to create the digital journey.”
What counts as a ‘digital link’? According to HMRC, it can NOT be:
It can include:
The document stressed that the list is “not exhaustive”.
Another part of the document that you may want to check out, is the part on digital records.
HMRC has listed records that must be kept digitally when MTD kicks in next April. You must have a digital record of:
The papers also said: “You will need to keep additional records, such as invoices. You do not have to keep these digitally but you may choose to do so.”
It also outlined that for each supply you make you must record the:
The document stated: “This only includes supplies recorded as part of your VAT Return. Supplies that do not go on the VAT Return do not need to be recorded in functional compatible software. For example, intra-group supplies for a VAT group are not covered by these rules.”
All in all, there’s a lot to digest across the documents, which can be found here LINK: https://www.gov.uk/government/news/hmrc-publishes-more-information-on-making-tax-digital
Want to know more? Let the Keytime team give you a call to discuss how our software can help you be fully prepared for implementation in April 2019.