This morning HMRC opened up their ‘Making Tax Digital‘ VAT pilot to public beta testing as businesses prepare for the April 2019 deadline. This means law firms and other types of organisation can now sign up for early testing of the digital filing of their VAT returns straight to HMRC via their practice management systems, before they are mandated to use it next year. However, it is important you pause for thought before you sign up so you can check that your legal practice management software supplier is ready for this.
Once you have signed up to the service you will be unable to go back to submitting a VAT Return via the paper form or via the website without the necessary software integration to do this for you, which may lead to firms incurring late submission penalties. So law firms must check with their software partners to find out if they have done the integration work, have passed the pilot phase and are ready for pilot beta testing.
Select Legal Systems have been working with HMRC on this for some time and are in the final stages of passing the pilot phase, which means LAWFUSION users should be able sign up for VAT submission beta testing from the next LAWFUSION release.
Steve Dixon, Co-owner and Development Director for Select Legal said, “HMRC have provided a test environment where software suppliers like ourselves can test our MTD software integration. We have completed this testing in September. For our next step we must demonstrate our prototype to HMRC to achieve sign off. We are ahead of the game on this, ready and waiting for HMRC to view our work. They have completed this for circa 70 software suppliers so far and we simply have to wait our turn. We expect to be able to make an announcement shortly, but until then LAWFUSION users should NOT sign up for the beta testing.”
The VAT public beta testing is now open some half a million businesses – i.e. to sole traders and companies (except those which are part of a VAT group or VAT Division) provided they are up to date with their VAT and have not incurred a default surcharge in the last 24 months. Those who trade with the EU, are based overseas, submit annually, make payments on account, use the VAT Flat Rate Scheme, and those newly registered for VAT that have not previously submitted a VAT return, are unable to join at this point. This move enables HMRC to pilot the service with larger numbers so they can be confident it is all working well before April.
HMRC have published a series of guidance pages and videos to help businesses who are ready to sign up. Select Legal Systems Limited will share these links with LAWFUSION users once HMRC have signed off their prototype.
Please note that Making Tax Digital will apply to businesses with a turnover above the VAT threshold of £85,000 – smaller law firms will not be required to use the system, although they can choose to do so voluntarily.
For more information about how LAWFUSION will handle online VAT submissions for ‘Making Tax Digital’ or any other aspect of LAWFUSION – please call 01482 567601 during normal office hours. Outside of that our online enquiry form is available here 24/7.