HMRC’s Making Tax Digital: A Debitoor Q&A
The start of Making Tax Digital for businesses over the taxable turnover threshold of £85,000 is just around the corner. With April 1st coming up quickly, VAT-registered businesses in the UK are looking for answers and solutions for managing VAT returns under the requirements laid out by this new regulation.
Here at Debitoor, we’ve also been hard at work preparing for the April 1st deadline, to ensure that the software offers the options necessary for our users to continue their invoicing and accounting needs and meet the requirements of Making Tax Digital software.
In this article we have a short set of questions and answers about MTD in general, plus specific information about Making Tax Digital and Debitoor.
Q: Will Debitoor offer a Making Tax Digital solution for businesses who are looking to submit VAT returns digitally?
A: Yes. Debitoor has now released the MTD feature to all UK users.
Q: Will the Debitoor Making Tax Digital solution be available on all plans?
A: No. The option to preview and submit VAT returns to HMRC will be available only on the Debitoor plans that offer the VAT report option. This includes the M and L plans.
Q: Is there an extra cost for the Debitoor MTD solution?
A: No. The possibility to submit VAT returns directly to HMRC from Debitoor will be included in the current price of the M and L subscriptions.
Q: Can I choose to start using the MTD solution at a different date?
A: Yes, if you are on the M or L plan, you can begin using the MTD solution when your business passes the threshold, or when you register for VAT and are above the minimum threshold for annual taxable turnover.
Q: Will the Debitoor MTD solution allow me to submit returns based on my VAT return periods?
A: Yes. Your VAT return period will be based on what you have in your HMRC account. When you connect your Debitoor account to HMRC, this information will automatically be matched but can be edited.
Q: Does the Debitoor MTD solution provide proof of submission?
A: Yes. After successfully submitting a VAT return through the Debitoor x Making Tax Digital solution in your account, you will receive an email that includes a PDF receipt with details of the VAT return submitted.
Q: Do I have to use the MTD solution if I am on the M or L plan?
A: No. If your business does not fall within HMRC’s April 1st requirements for businesses to use approved software to submit VAT returns online, you do not have to use the feature.
Q: Can I pay any VAT amount due through my Debitoor account?
A: No. Debitoor does not handle any money in user accounts, so you will need to make any payments to HMRC through the HMRC website.
Q: Can I see previous VAT returns?
A: Yes. Only if those returns were submitted through the Debitoor x Making Tax Digital solution. Debitoor will not import previous VAT returns submitted by other means. However, you can manually mark these periods as ‘Reported’ within your account.
Q: What if I am using a VAT scheme? Can I still use the Debitoor x MTD solution?
A: If you’re currently using the Cash Accounting scheme or the standard Accrual Accounting scheme you can use the Debitoor x MTD solution to submit VAT returns online.
Q: Do I have to submit my VAT returns now for the previous period?
A: HMRC has stated that MTD comes into effect on April 1st, so any reporting periods after this date must use Making Tax Digital software to submit VAT returns. For example, if you submit quarterly and are currently in the period from March 1st to May 31st, you will need to use MTD software for the period starting June 1st.