Our MTD committee have the following advice in respect of MTD Bridging Software and how to deal with Complex VAT cases:
• Where bridging software is used to deal with the MTD submissions, as far as we are aware this will be an MTD compliant solution as long as the underlying records are maintained electronically
• Please note that bridging software is only available if the main data is kept electronically (it is not possible to use a manual cashbook and then just pick up totals within the bridging software)
• If bridging software is to be used as part of the MTD submission process there should be digital links between the electronic records being maintained in software/spreadsheets when data is being transferred
• There is however a ‘soft landing’ period covering the first 12 months whereby the data can be transferred manually
• Our understanding of the current legislation is that if there is no digital link then the use of bridging software will only be MTD compliant until 1 April 2020 (or 1 October 2020 in the case of complex cases) however the definition of digital link is quite wide and the availability of CSV export may extend the period of compliance past 2020 (see section 3.2.1 of HMRC VAT Notice 700/22 for more information about digital links)
• Our advice is to convert to a full MTD compliant software package if possible.
• We understand however that there will be situations where bridging software is necessary, for example where
- Bespoke software is in use but has not yet been upgraded to include the MTD requirements
- Your VAT affairs are complex and suitable software is not available
- The cost or timing prohibit an immediate change and a temporary solution is necessary
If Bridging Software is required then we suggest you speak with your Thomas Westcott advisor or call your local office to discuss your options.
There is a 6 month deferral (to commencement from 1 October 2019) for the following:
• 'Not for profit’ organisations that are not companies (this includes some charities)
• VAT divisions
• VAT groups (the deferral applies to the group registration only and not to any group companies that are not covered by the group registration)
• Public sector entities that are required to provide additional information alongside their VAT return (such as Government departments and NHS Trusts)
• Local authorities and public corporations
• Traders based overseas
• Those required to make payments on account
• Annual accounting scheme users
HMRC will issue a notice of deferral to taxpayers it feels are eligible as above. These will be issued by the middle of March 2019. If you fit the criteria but do not receive a notice then you will not be able to apply the exemption.
We advise that HMRC should be contacted in these circumstances and a request for a deferral certificate be made in advance of 1 April 2019.