Many have called for a deferral on Making Tax Digital (MTD) for VAT, but with the due date impending, the chances are becoming increasingly improbable. A high volume of businesses are still not prepared, causing panic.
It’s likely you’ve had an influx of calls from clients requesting your expert help. You can secure the long-term success of your business by guaranteeing that they are organised and compliant.
GoSimpleTax’s Technical Director, Mike Parkes, advises on the best ways to prepare your clients in time.
Recognise your clients’ needs
Depending on the nature of your services, you might be providing accounting help to a wide range of clients. Perhaps not all of these will be required to submit their VAT digitally, and so may seek your guidance on this. If you incorrectly advise that they do or don’t need to do so, this may not only lead to client dissatisfaction, but to non-compliance too.
Therefore, make sure you understand the exact criteria. The threshold for registering for VAT (and so needing to file digital records) is £85,000 for the 2019/20 tax year. Some taxpayers are exempt if they have a reason classed as legitimate by HMRC, such as being unable to use computers.
Be aware of how the digital path works
For those clients who are required to file VAT digitally, HMRC have stressed that this should be a completely digital path. It’s likely some will have already asked you if they can use spreadsheets.
HMRC have confirmed that these are accepted, providing digital links are in place. ‘Bridging software’ will be necessary to maintain the digital path. These are tools that can take information from a spreadsheet (or any in-house record-keeping system you may have in place) and send it digitally to HMRC in the format it requires for MTD.
Your clients may already use existing tools, and have a preference to continue doing so. Whichever software is chosen, guarantee that it’s MTD-compatible. You can quickly scan HMRC’s approved list of suppliers for verification.
Make sure software suits your clients
Compliance isn’t the only factor to consider when determining the best MTD for VAT software. You can ensure that you secure and retain clients by selecting tools that meet all their needs.
You’ll know that those seeking help with their accounts not only require advice, but less stress, time and money associated with the process. Therefore, guarantee there are functionalities like instant tax calculations and smartphone usability. This will allow them to update their finances as they go, and also know the amount of tax they owe at any time of the year.
Register with HMRC
Whilst you and your client will probably already have Government Gateway credentials for submitting VAT returns to HMRC, you will still need to follow these steps:
1. Create your new agent services account
This will involve creating a new Gateway account for your practice. The HMRC video gives a good overview of the process.
Once created, you will be able to access HMRC’s digital services.
2. Link clients to your agent services account
Login to your agent services account. HMRC will not provide you with a list of clients (they say this will be available in your MTD software), however you can link existing clients by following the steps here.
For existing clients, make sure you have their VAT number and date they registered for VAT. For new clients, you will also need their National Insurance number and postcode.
You will be provided with a link that you must then email to your clients. They must click the link to authorise you to manage their MTD for VAT services. This must be done within 14 days.
3. Sign up clients for MTD
Compliance is key as the accounting world moves into the digital age. GoSimpleTax have launched their new bridging software - GoSimpleVAT so that you can ensure every client is compliant with MTD for VAT.