The complete set of records to meet MTD requirements does not have to be held in one place or one program. Digital records can be kept in a range of compatible digital formats. Taken together these form the digital records for the VAR registered entity.
If a set of software programs are used, there must be a digital link between these pieces of software. This rule will apply for VAT periods starting on or after 1 April 2020. From 1 April 2019 to 31 March 2020 there will be a “soft-landing” which will allow the manual transfer of data between software programs.
Not all businesses will be able to use their main software package to be able to generate the information required to complete the nine boxes for the VAT return. An example of this will be where the business is using a special VAT scheme such as partial exemption. Many will overcome this problem by transferring data from their main software package to a spreadsheet to carry out the final calculations. The spreadsheet will need to be API enables to that the VAT returns can be submitted digitally to HM Revenue and Customs.
It is the transfer of data between the main software package and the spreadsheet, which will ultimately need to be transferred by way of a digital link. During the “soft-landing” period, the transaction totals can be transferred manually, but from 1 April 2020 this transfer of data must take place electronically between software programs, without the involvement or need for manual transcription (i.e. copying over the information by hand). As copy and paste involves manual implementation this will not be an acceptable method of data transfer, once the “soft-landing” period has ended.
For further information on MTD or cloud accounting, please do not hesitate to contact me.
You can also watch our MTD update videos via our Youtube Channel.
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