Making Tax Digital for VAT requires VAT registered businesses with taxable turnover above the VAT registration threshold to keep records in digital form and file their VAT Returns using software. HMRC’s Making Tax Digital deadline is 1st April 2019.
With just over six weeks to go time is ticking away and some people are still feeling rushed and overwhelmed by what is expected of them for the April HMRC ‘Making Tax Digital’ deadline. Select Legal Systems Limited has been working closely with HMRC and its clients on ‘Making Tax Digital’ for some time to ensure that LAWFUSION – its legal practice management software for law firms – was made ‘Making Tax Digital’ ready well ahead of time. The company passed all HMRC checks in December to become a HMRC Recognised Making Tax Digital VAT Software Supplier and Team LAWFUSION has been helping law firms submit VAT returns direct to the HMRC pilot successfully on a daily basis ever since.
Mike Craven, Director and co-owner of Select Legal Systems said, “Our software has been MTD ready since September, but we had to join an HMRC queue of suppliers to have our prototype checked in order to become a recognised HMRC VAT software supplier before we could release it. Since passing, we have been helping law firms on a daily basis, as they set up with the HMRC pilot and start to calculate their VAT returns using the new LAWFUSION functionality. Our users are now successfully submitting their VAT Returns digitally directly from LAWFUSION to HMRC. This kind of enhancement is made available to LAWFUSION users free of charge as part of the maintenance contract fee. Of course this kind of software development arrangement is not the norm for some other legal software suppliers.”
Michael Penny, Solicitor, Ormrods Solicitors & Advocates Ltd (LAWFUSION user since 2013) said,“We were the first law firm to submit our VAT return for Making Tax Digital directly from LAWFUSION to HMRC and it all went very smoothly. The LAWFUSION Support Team were very good, as always , guiding us through the process. Firstly they organised our software upgrade, they talked us through the HMRC pilot sign up and then with a couple of clicks in LAWFUSION our VAT Return was generated, it popped up in front of us and all we had to do was check it, confirm we were happy with the figures and click submit. It couldn’t have been easier. With the new VAT Journals functionality in LAWFUSION too, managing VAT has never been more straightforward.”
The members of Team LAWFUSION responsible for the new VAT software functionality have put together this checklist of what they feel law firms need to know to get moving, as we quickly approach the April deadline:
What Do Law Firms Need To Know About ‘Making Tax Digital’
The best scenario for law firms is to have quality legal practice management software in place that will process and calculate VAT accurately and enable the firm to submit their VAT Returns direct to HMRC digitally.
There is a HMRC web page here that explains very clearly all the rules, stipulations and exemptions for Making Tax Digital – regarding VAT. It explains about the functional compatible software required and the necessary digital links too and also about their soft landing period. It is well worth a read.
– SIGN UP
The first step for law firms that wish to start submitting VAT returns digitally now, once they have relevant software in place, is to sign up to the HMRC pilot here:
Timing for firms signing up will very much depend on when their next VAT Return is due.
– HMRC PILOT
‘Making Tax Digital’ is still at pilot stage with HMRC, and signing up doesn’t guarantee firms will be accepted.
– Law firms that do EU work are not able to use ‘Making Tax Digital’ at this time.
– Law firms that submit yearly VAT returns are not able to use ‘Making Tax Digital’ at this time.
– A VALID EMAIL ADDRESS
When you sign up for ‘Making Tax Digital’ HMRC ask firms to provide a valid email address – this means HMRC will no longer send you ‘hard-copy’ postal correspondence about your VAT returns – all communication from then on will be sent to the firm via the email address used to sign up – so firms must ensure the email address used is a valid email address and that it is checked by a human being on a daily basis.
– 72 HOURS
From sign up it can take up to 72 hours before your firm is notified it has been accepted to take part in the HMRC ‘Making Tax Digital’ pilot, so please factor this into your Making Tax Digital plans.
– NO GOING BACK
There is no going back once a firm has signed up for the HMRC beta testing pilot – so be sure your firm is ready in terms of its own internal processes, the staff responsible for managing the firms VAT and of course that you have the relevant software in place, from a HMRC recognised software supplier.
– INFORMATION FOR SIGN UP
When firms sign up via the HMRC website they will need to have the following information at hand:
1. VAT Registration Number (9 digit number received when registering for VAT)
2. Company Type (Sole Trader / Limited Company / other)
3. Unique Tax Reference Number (UTRN)
4. Email Address
5. Company Registration Number (Companies House)
– CHECK YOUR FIGURES
Law firms need to check their VAT return thoroughly from a tax perspective before submitting as the firm is liable for ticking a HMRC box confirming their VAT figures are correct.
– VAT JOURNALS
The LAWFUSION software also provides VAT Journals to make the management of VAT easier for law firms.
If you are looking for new, fully integrated legal practice management software for 2019 from a HMRC recognised Making Tax Digital VAT software supplier – with a 25-year track record and lots of credible law firm case studies please look no further. Please contact Team LAWFUSION now to book a demonstration and talk about data conversion timescales – you can reach Team LAWFUSION by telephone during office hours on 01482 567601 or via their online ‘book a demo’ form here.