The purpose of Making Tax Digital is so HMRC can improve its efficiency and reduce the amount of errors made by businesses.
What this will mean is that businesses with a turnover of sales past the VAT registration threshold of £85,000 in the UK, will have to digitally record all their transactions and store them in the same way. They would also need to generate their VAT returns from the digital records using HMRC compatible third-party software. A list of approved software providers can be found on the HMRC website.
Currently, the manual input of data can lead to lots of human errors which is why HMRC are Making Tax Digital. Going forward, data extracted from approved software will need to be imported into a Vfile ensuring UK VAT reporting will be more secure and less error prone.
The Vfile is not only aimed at making businesses tax compliant but it also will help the businesses manage their VAT compliance better too. This should help businesses be able to focus on other aspects of their business as it will make the task easier.
Vfile reporting will also have a dedicated team of technology and VAT compliance experts to ensure the best support is given.
In addition, Vfile format reporting isn’t just UK based. Through this, businesses will be able to prepare and submit their returns in over 35 countries accompanied by supporting documents and intrastats where applicable.
In case your wondering what an Intrastat return is:
Intrastat returns are for every VAT registered business trading goods with other EU member states in which it is an obligation for them to declare particular information. The information required relates to the value of your business’s arrivals and dispatches. If the value exceeds the annual intrastat exemption thresholds which are; £1.5 million for arrivals and £250,000 for dispatches, businesses must submit a supplementary declaration with more detailed info.
Now all this could all be quite time consuming and hard to keep on top of, but Cross Border VAT software helps manage all of that for you. CBV provides all the information required to complete an Intrastat return at the touch of a button. A UNIQUE feature of CBV, which no other software can do. It will keep you notified of when your VAT threshold in any of the 28 EU member states is due to be surpassed. You will receive an email, so you can REGISTER in the right time to ensure your VAT compliance and can stay abreast of all your VAT obligations.