As part of their Making Tax Digital (MTD) plans to modernise the tax system, the Government is changing the way VAT registered businesses create and submit VAT Returns. You may have already noticed that you can no longer use Sage 50 to submit your VAT return if you are in an older version of the software (Version 23 (2017) or below).
As of April 2019, businesses above the VAT threshold of £85,000 are required to file their VAT returns electronically using accounting software, and are obligated to keep digital records of their transactions.
Manual submission through the HMRC gateway for VAT will no longer be accepted for most businesses. So those of you currently logging into the HMRC and filling out the VAT return by hand will no longer be able to access this system from April 2019.
What does it mean for businesses?
If your businesses is affected, the new VAT rules apply from 1 April 2019, and you must:
- Ensure you have MTD for VAT compliant software.
- Start maintaining digital business records for the purposes of VAT.
- Sign up with HMRC for MTD for VAT.
- Start submitting your VAT Return through your compliant software
What do I need to do?
If you already have a Sage subscription for Sage 50cloud (50c) Accounts then you already have access to the latest software. Just make sure you have installed all the updates and you are running the latest version (at the time of writing (August 2018) this is Version 18.104.22.168 but this will change). You can see your version number on the Help > About page of your software.
If you are still using Sage 50 Accounts or Instant Accounts and have not updated to subscriptions as of yet then give Alison Mead a call on 01604 420057 and we can support you in switching to the latest version. There have been some fantastic updates in the software recently, such as in multi user systems not having to kick everyone out for error corrections, so this is a great opportunity to upgrade.
To find out more about the HMRC rule changes then look at VAT Notice 700/22: Making Tax Digital for VAT