Group VAT Making Tax Digital Submissions Explained
14th Feb 2020
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Are you one of the types of businesses that had a deferred MTD for VAT start date of October 2019 (UK companies)? HMRC delayed the mandated start until 1 October 2019 for some businesses with more complex requirements (such as those who are required to submit a group VAT registration). There are approximately 40,000 businesses that fall into one of the relevant categories making them eligible for deferral.
Group VAT Registration
If we take VAT groups as an example, companies needing to submit group VAT returns from October 2019 will need to submit returns digitally via the MTD VAT portal – this is for VAT periods starting October 1st, so the first group MTD VAT return was required to be filed for the quarter ending December 2019 in January 2020.
Many companies need to produce and register a group VAT return. Today, that group VAT calculation can be done on a spreadsheet (copy and paste the individual VAT figures from the different bookkeeping systems, add them up) and the resulting figures manually entered into HMRC’s portal.
Since October 2019 that spreadsheet needed to be API enabled – otherwise known as bridging software, which is effectively a spreadsheet with a link to HMRC. Group returns until April can be prepared in Excel and use a bridging tool to submit the 9 figures – this is the quickest fix for groups, but is not a long term solution. There is a soft landing period for one year from the deferred start date for group VAT registration companies, so from October 2020 there will need to be a digital link between the individual databases of the group and the medium used to calculate the VAT owed.
Digital Links and VAT submission
From October 2020 records that are maintained in more than one programme or product must have a digital link between each of the software products and their spreadsheets. Information cannot be transferred manually (so no more copy and paste, adding figures together and then submitting).
How AccountsIQ will make it easier to submit Group VAT returns digitally
The AccountsIQ cloud accounting solution is used by thousands of companies who already submit their MTD VAT return digitally to HMRC. From March 2020 additional functionality will be in place which will allow a consolidated group VAT return to be submitted digitally to HMRC under MTD.
AccountsIQ’s solution will be a best practice solution for group companies needing to submit a group VAT return, as using the AccountsIQ platform the process will be efficient, reduce inaccuracies and the underlying architecture will provide the ability to produce a ‘detailed VAT return’ report. Essentially this is what HMRC ask for ahead of an enquiry, something that is not so easily achieved using multiple spreadsheets, digital links and APIs.
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