New guidelines have been announced by HMRC, now giving companies longer to make the full digital transition.
Following the announcement from HMRC last week – offering companies the opportunity to delay making their VAT payments to HMRC, they have now also deferred the Making Tax Digital for VAT legislation dates for phase 2, giving businesses longer to make the change from manual submissions to going fully digital.
The soft-landing period has now been extended whereby, HMRC will continue to allow you to copy & paste data, however, it must then be entered into an MTD compatible product, such as Magic Tax.
Making the digital transition to MTD for VAT
COVID-19 is creating extremely difficult times for all, and HMRC have confirmed that they are “committed to helping in every way possible all those businesses facing unprecedented challenges”.
Therefore, HMRC are providing all MTD businesses with more time to put in place digital links between all parts of their functional compatible software. This means that all businesses now have until their first VAT return period starting on or after 1 April 2021 to put digital links in place.
This is good news for Magic Tax users, who can now continue using the bridging solution, developed by KFA Connect – to make their vat submissions for another year.
It also gives companies who have legacy systems which need upgrades or development work to make them fully compatible with MTD for VAT, longer to make these changes.
For companies who have already signed up for MTD for VAT Magic Tax will continue to be a great solution to take them through until April 2021 now.
Delaying VAT payments
If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to either defer the payment until a later date or pay the VAT due as normal.
However, it’s important to remember that you still need to continue to make your VAT submissions and if you choose to delay making vat payments to HMRC that you will need to cancel the direct debit mandate if you have one set up.
HMRC have also said that they will continue to process VAT reclaims and refunds as normal during this time.
For full details on any of the above, please visit the HMRC website.
KFA does not profit from Magic Tax at all, we simply ask businesses who find the FREE solution useful to make a voluntary donation* to our chosen charity Marie Curie, the charity which offers vital help and guidance to patients and the families of those living with a terminal illness.
*Suggested donation, £20.00 per vat submission filed.
Charities at the moment need our help more than ever, so now is a great time to use Magic Tax to help your business and help a very worthy charity in the process!