First VAT return filed under MTD?

We are the first business to register our own VAT affairs for the MTD pilot

First VAT return filed under MTD?

May 2018

At Tax Automation, we are committed to providing a robust yet flexible solution to MTD for VAT. As part of this commitment, we are the first business to register our own VAT affairs for the MTD pilot along with registering our VAT Controller software as the first compliant software application. We were hoping to announce that we were the first to submit a live VAT return using the MTD API. Sadly this was not possible due to issues with the interaction between the Government Gateway and the HMRC MTD system, leaving us having to file our return by sending our figures to HMRC on email and hoping that we won't be penalised. Until we have seen VAT returns filed successfully under MTD, we cannot recommend that any of our clients join the pilot. Once HMRC are further into their development and reach a point of having a solution that appears to work, we will review this recommendation.

Having said this, our approach to creating digital links between data, working files and the MTD system for filing has been proven in theory and will now be refined over the next few months. Please contact us if you would like to talk to us about how we can help you manage the transition to MTD for VAT.

The VAT Account

As promised in our last update, one of the key aspects of "functionally compatible software" is maintaining the "VAT Account" that shows the breakdown of the VAT return numbers. Things you need to be thinking about for the VAT Account are:

Details of all outputs broken down by VAT rate including:

  • Sales broken down by VAT code
  • Fuel Scale charges
  • Reverse charge for services
  • Prior period adjustments
  • TOMS annual adjustment
  • Credit notes

Details of all inputs broken down by VAT rate including:

  • Purchases broken down by VAT code
  • Bad debt relief
  • Capital goods scheme annual adjustments
  • Credit notes
  • C79 VAT
  • Partial exemption adjustments

As part of our MTD solution, we provide a template VAT Account that maps to the 9 boxes of the VAT return and, once stored in the VAT Controller system, provides HMRC with the links and process audit trail required.