Making Tax Digital: FAQs
If your business is VAT registered, with a turnover above £85k, you have to submit your VAT returns via the HMRC's gateway using compatible business software. If you don't have a solution, you need to act now.
I’m sure you have questions about MTD and our prof.ITplus software, so check out the answers to our frequently asked questions below.
Is prof.ITplus compatible software for VAT returns and MTD ready?
prof.ITplus is Making Tax Digital compatible.The software is recognised by HMRC and supports the HMRC's Making Tax Digital API, which allows users to submit VAT returns, as well as view previous VAT returns and view VAT obligations, liabilities and payments.
Will I need to update the prof.ITplus software I’m using?
Yes. You'll need to ensure you're on the latest update which was released in March.
What's the first thing I need to do for Making tax Digital?
You need to sign up to MTD via HMRC once you're satisfied that your software is MTD ready. The signing up process could take up to 3 days, so be sure to leave yourself enough time.
For more information on signing up to MTD with HMRC, check out there help and support page - HMRC Help & Support for MTD
How do I connect prof.ITplus to HMRC and submit my VAT returns?
A full user guide on how to connect and submit your VAT returns via MTD in prof.ITplus can be found in the Customer Centre.
How do I know if my software is MTD compliant?
prof.ITplus is a HMRC recognised MTD software supplier.
If you’re unsure as to whether an alternative software is MTD compliant, you can view the list of suppliers on HMRC who are MTD ready now and those who are in development.
If you need any further information on prof.ITplus or how to switch your current software to prof.ITplus, drop us an email and we’ll be in touch.
What is a digital record?
A digital record is simply storing your financial details digitally. You’ll need to keep your records digitally in order to comply with the MTD processes, therefore you’ll need to store a digital copy of the transactions which make up the 9 box VAT return. This information needs to be kept in MTD compatible software so that you can send the data to HMRC through the API.
What are the benefits of keeping my records digitally?
Any business, regardless of size or industry, can benefit from keeping their records digitally. Ultimately, it removes the need for manual processes and data collection that could lead to errors, missed information or incorrect data.
Keeping digital records means that your data is updated in real time. It removes the need for manually collecting receipts and creating calculations. Real-time results can reduce the risk of errors and create a streamlined process with minimal effort.
Millions of people are already banking online, paying bills online, and managing personal tax and finances online, so it’s only logical for businesses to become as responsive to ensure the management of their finances are straightforward and efficient.
Keeping your records digitally will mean that it’s a smooth, seamless process for viewing your data throughout the company and communicating your figures to MTD software.
What if I currently use spreadsheets?
The business records you keep must be able to be submitted to HMRC digitally. If you’re using spreadsheets, this is most likely to be done using bridging software. However, the spreadsheets need to preserve any digital records therefore you must ensure that the data is not accidentally over-typed or deleted. MTD compatible software will make this process much easier.
What if I currently make multiple adjustments and calculations in a spreadsheet before submitting values from prof.ITplus?
We advise you to consult with your accountant about the best way to handle these amendments going forwards. It may be that you need to utilise the prof.ITplus Accounts and Invoicing module more, so if that’s the case, get in touch with us and we can provide you with training so you can get the most out of the software.
Will there be free software I can use?
HMRC has stated that they will not be providing their own free software. They are working with multiple software providers, including OGL, to be sure there is software out there that is MTD ready and suitable for every business size, type and industry. The updates to prof.ITplus will be rolled out to all current prof.ITplus customers, with a current software support contract, free of charge.
Do I need internet access to submit my tax records via prof.ITplus?
Yes, the HMRC API requires internet access and you’ll be directed to the HMRC website to login and grant permission for prof.ITplus to update the VAT return. There are exemptions to the MTD process, see below for details.
Are there any exemptions for submitting VAT returns digitally?
HMRC recognises that not everyone will be able to comply with the MTD process. Those that are exempt include businesses that are run entirely by practising members of a religious society whose beliefs are incompatible with the requirements of the regulations (for example, those religious beliefs prevent them from using computers) they may be exempted.
Additionally, if it is not reasonably practicable for you to use digital tools to keep your business records or submit your returns, for reasons of age, disability, remoteness of location or for any other reason, you may be exempted. You should contact the VAT helpline if you think this applies to you. HMRC also provides digital assistance if an exemption is not appropriate.
What figures are submitted via MTD in prof.ITplus?
The MTD program uses the same calculation as the current VAT return report.
Can I submit VAT returns using the Cash Accounting Scheme?
The MTD routine uses the exact same logic as the VAT report therefore, if you currently submit the numbers from the prof.ITplus VAT report to HMRC then it should continue to work the same. You'll need to check the HMRC guidelines to find out if cash accounting companies are included in the current phase of MTD.
Can I amend any figures before I submit?
There is an option to enter an amendment against each of the nine boxes in the VAT return. You’ll need to enter the amendment and a reason/description for the change. It is a requirement from the HMRC that you cannot simply edit the calculated value.
Can I correct a posting after it has been made?
This can only be done through the HMRC website/VAT portal. HMRC does not provide an API for amendments.
What shall I do if I have a problem or query regarding MTD?
HMRC has issued the following:
Will you be developing all your software products (Finisher & Prof.IT)?
OGL is only developing our prof.ITplus software to assist MTD. We’re committed to investing our time developing our larger, most recent and most widely used prof.ITplus software to ensure the current version has all the best up-to-date features. Any customer operating older, tailored versions of our software, will be without this functionality. You will need to contact us to inform us whether your accountant will be submitting the records on your behalf or whether you require development to your specific software.