MTD - what exactly needs to be done to be compliant?

UsernamesAllGone

Hi. I've been reading some old posts about 'My Tax Digital' (formerly Portico) with interest. The inference here and indeed on the My Tax Digital website itself seems to be that you need only 'bridge' VAT figures using their software to be Making Tax Digital compliant......and to do that, you need only upload a simple spreadsheet with your 9 VAT return figures onto their software. An HMRC rep I spoke with, however, said that this wasn't the case and pointed me to VAT notice 700/22 that says 'records' should be kept digitally (with a software provider in order to be compliant)....ie you can't keep paper records and just do the bridging bit digitally. I didn't quite trust though that the HMRC rep knew the score. Does anyone know if the 'records' that this notice refers to means 'all your accounts'; or if it can be as simple as your 9 final figures??

Jeremy535897

The records have to be kept in a spreadsheet that summarises them into the VAT figures required. Bridging software does the rest. You cannot just have a spreadsheet with the 9 figures manually inputted. See for an example:
https://easymtdvat.com/mtd-software-for-excel

UsernamesAllGone

Thanks Jeremy - sorry didn't see this earlier to thank you

NannaH

MTD has now been put back by two years. 

Weave

We used to use https://www.taxoptimiser.co.uk/Pricing before we switched to a cloud based accounting system that is MTD compliant. They are free for the first year then £30 per year.

Pennywise

It's also important to note that simply manually entering accounting data into software or a spreadsheet still isn't enough to satisfy HMRC requirements.  They expect/require any data already held in digital format to be transferred automatically into the MTD software.  So, if you have an electronic till, they don't want you manually entering the daily Z readings into, say, Quickbooks - they want you to do a digital link, so creating a csv file from the till and importing it electronically into QB is what they want.  They've also said they don't want you to do a "copy and paste" from one system to another.  Their guidance around this is regularly changing, but from my understanding, that's their current requirement.  Basically they don't want you manually entering data that can be entered by an electronic bridge.  No idea how strict they're going to be or when/whether they'll starting checking.

Grumpy_chap

NannaH said:

MTD has now been put back by two years. 

To which part of MTD do you refer?
MTD for VAT has been live for a while now.

Jeremy535897

MTD for ITSA has been delayed until April 2026, and will be introduced in stages.

I don't think HMRC require everything to be digital. You can use your own spreadsheet, for example, and import bridging software into the workbook as a separate page. You then link the relevant figures in your accounting record spreadsheet page to the bridging page. For small sets of accounts, that might just be the total turnover figure quarterly and the total expenses figure quarterly.