The deadline for the final roll-out of Making Tax Digital (MTD) for VAT is fast approaching. From 1 April all VAT-registered businesses, regardless of turnover, must comply with the MTD rules. As such, this feels like a good time to take stock and review how MTD is working and what else mid-sized and growing companies might need to consider.
Last year, research from Ipsos* (commissioned by HMRC) provided some interesting insights into the motivations and experiences of businesses that voluntarily signed up to MTD for VAT. The main conclusions were:
- Signing up to MTD for VAT was straightforward for those businesses already using accounting and finance software.
- Most businesses surveyed did not experience any impact – positive or negative – from moving to MTD.
- Those who fully understood and engaged with the principles of MTD benefited in three key ways:
- Real-time monitoring of their finances
- Automation drove operational efficiencies
- Confidence: reassured they were getting their VAT returns correct first time.
*Source: Ipsos: Exploring voluntary sign-up to Making Tax Digital for VAT.
The benefits of MTD-compliant cloud accounting software
These research findings chime with the experience of many of our customers. AccountsIQ is registered with HMRC as an MTD-compliant software vendor and thousands of companies are already using our platform to submit their MTD VAT returns digitally to HMRC. Many of those customers have reported additional benefits from compliance with MTD. These include:
An efficient and effective audit trail
Our customers have found that maintaining all their accounting records in the Cloud drives internal efficiencies. It also builds confidence with external stakeholders, such as investors and auditors which can be particularly helpful for start-ups and scale-ups pitching for funding. In addition to this pre-built tax audit trail, we supply VAT100 (UK) and VAT3 (IE) summaries to customers.
Our software supports HMRC’s ‘digital links’ requirements. Digital links ensure that information is not transferred manually (such as by copy and pasting data from spreadsheets or other systems) as this process is error prone.
Easy Group VAT submissions
If you’re a group company (or you’re planning to add entities to your growing business in the future) you may want to realise the benefits of Group VAT registration. This is straightforward and efficient with AccountsIQ. Group companies can submit their Group VAT return on our consolidated and HMRC approved platform and track their Group VAT liability through our consolidated management reporting dashboards.
Reassurance and confidence
As one of the first accounting software providers to be fully MTD compliant, AccountsIQ enabled all our customers to adopt the new MTD submission regimes as soon as they came online. You can also trust us to be ready to deal with any future changes or roll outs introduced by HMRC. For example, we anticipate Corporation Tax quarterly submissions to be piloted from 2024 and mandated no earlier than 2026.
Learn more about Making Tax Digital (MTD)
Find out more about AccountIQ’s Making Tax Digital Software.
Follow this simple 2-step guide to Submitting Digital VAT Returns.
If you’re a growing company looking to add entities in the future
Find out about Group VAT Registration and download our free guide: From start-up to scale-up: how to find the right finance system for growth.