There is a lot of speculation about business preparedness for Brexit – especially for small business but very little has been said about MTD. The initial phase of which is just days after the current Brexit date. As MTD is coming in for all businesses that are registered for VAT with the exception of a few on 1 April 2019 this is surprising.
Accountants that have been used to getting their smaller clients to use spreadsheets are having to rethink this strategy. Most will move their clients to the cloud as this will have benefits beyond meeting the statutory requirements of MTD. I will cover small business accounting software in a later post.
If you think that you are compliant because you currently submit your VAT return electronically then you are wrong. MTD goes well beyond the current submission gateway and is the start of an initiative to have all business financial records stored and inspectable by HMRC.
The initial phase only affects businesses that are VAT registered but the long term intention is to include all business. Initially the goals are limited to submission of VAT data through approved MTD software. It is expected that most accounting software marketed in the UK will be MTD compliant in time. A list of approved software can be found here. Most of the major vendors including Sage are ready but a lot of the minor ones are still working on approval.
If you have custom accounting software then you either have to process your submission through one of the suppliers of bridging software or seek individual approval. Submitting data individually is not particularly technically challenging but will be expensive if you have to go to a software house to do this for you.
In a series of posts, I will explain what the current understanding on the implications of MTD for business will be both in the short and long term. For the moment you should be speaking with your financial advisors to see what if anything you need to do in the coming weeks.