The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.
This guidance note provides an overview of digital records and submitting VAT returns using MTD-compatible software. This note should be read in conjunction with the Making Tax Digital ― VAT ― signing up for MTD guidance note.
HMRC has produced some Help and support for Making Tax Digital videos to assist businesses with signing up to MTD and using MTD.
HMRC has also provided further information which may be of use in the MTD ― HMRC developer hub.
HMRC’s view is that keeping records digitally will result in more accurate and timely record keeping that will assist with reducing the number of errors that are associated with manual record keeping. Quarterly updates that are taken directly from digital records will help to prevent errors from occurring as there will no longer be manual processes and calculations involved when information is transcribed from one format into another.
The software should contain nudges and prompts that assist with eliminating common errors that can occur and should result in businesses obtaining greater confidence that their VAT returns are correct. As a result, it should not be necessary for HMRC to undertake compliance visits in order to confirm that the business’ VAT position is correct. This should reduce the admin burden and costs involved for both HMRC and the business concerned.
The regulations state that a business that is required to use the MTD provisions must use functional, compatible software in order to ensure that they adhere to the latest requirements. Functional, compatible
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