VAT has gone digital as part of MTD
If you’re managing UK companies as a vehicle for offshore wealth then for Making Tax Digital you need to make sure that your systems are capable of filing digital VAT returns.
From 1st April 2019, all VAT registered entities, based in the UK and overseas, with an annual taxable turnover that exceeds £85, 000 will be required to file digital VAT returns and keep digital records.
The digital VAT return has to be filed using software which can connect to HMRC’s API (Application Programming Interface) and the software must also provide a digital journey of VAT records as part of the digital records. HMRC require a digital link between the submitted returns and source data without manual intervention; a digital link is an electronic transfer or exchange of data between software programs.
Don’t leave it too late
There is a small amount of breathing space for businesses with more complex VAT affairs. These businesses include trusts and unincorporated “not-for-profit” organisations and overseas-based businesses. In this instance, the HMRC has allowed a short deferral of digital VAT reporting until VAT return periods commencing 1 October 2019. Even if you have been informed by the HMRC that you are included in the deferred group you still need to be making arrangements now to make sure you will be compliant with the requirements.
There is also a one-year soft landing period for those businesses that use spreadsheets but during this period you will still need bridging software to create a digital link between your spreadsheet and the HMRC’s API.
Although there are many software providers on the HMRC’s recognised supplier list, you will find that vast majority of the software providers are tax systems or bridging systems. A traditional tax system cannot offer the specific functionality required for managing offshore wealth vehicles and a bridging system is only a temporary solution. You need a longer-term solution, and you want a solution that doesn’t just provide one compulsory function but will add value to your business services.
Ready for the long haul
Luckily this is where WealthWorks+ comes in. Our software is currently unique in its offering as a trust and company administration system that also meets Making Tax Digital obligations for offshore VAT registered entities. WealthWorks+ has already gone through the appropriate testing and HMRC approval process and is currently being used in the market by a large global corporate services provider with offices in Jersey.
You can also rest assured that because of the strong relationship we have with our clients that we will continue to ensure that our software provides the leading solution on the market for managing the administration, compliance and accounting for offshore entities whatever regulatory requirements may come along in the future.