In preparation for the introduction of Making Tax Digital (MTD) for VAT businesses should also be aware of the requirement for keeping and maintain records in a digital format.
This comes into force from 1 April 2019.
In a nutshell, these are the requirements for digital records:
1) For Designatory Data - business name, the address of principal place of business, VAT registration number, VAT accounting scheme used
2) Supplies Made (recorded as part of VAT return) – to be recorded on invoice by invoice basis.
Where there are several supplies with the same VAT rate this can be recorded as a single line. For each supply made, the information required is time of supply- tax point, the net value of supply and the rate of VAT charged.
If supplies are made via a third party (e.g. a letting agent) and a summary is provided, this can be recorded as on line as if it was a single invoice.
Paper invoices can still be issued but the details should be entered into functional compatible software including spreadsheets.
Scanning invoices into the software is optional.
3) Supplies Received ( recorded as part of VAT return) – to be recorded on invoice by invoice basis and for each supply made the information required is the time of supply - tax point, value of supply and the rate of VAT charged.
If purchases are made via a third party (e.g. an agent) and a summary is provided, this can be recorded as on line as if it was a single invoice.
Where VAT is claimed on employee expenses the total of the expense claim can be recorded as if it was a single invoice.
Petty cash entries have to be recorded for each petty cash purchase individually.
We are working with businesses to help ensure that they understand, and are compliant with, the new regime.
If you require assistance with MTD for VAT please contact us for assistance and advice.