Question 1

What is MTD for VAT?

Accepted Answer

VAT registered businesses with a taxable turnover of more than £85,000 must follow the rules for 'Making Tax Digital for VAT' by keeping some records digitally. From 1 April 2022, all VAT registered businesses must sign up, whatever they earn.

Whether you are looking for help with making tax digital for business vat or an agent, 123 Sheets offers the best software for making tax digital for vat.

Question 2

What records must you keep digitally?

Accepted Answer

According to the UK Government website, you need to keep the following records digitally:

your business name, address and VAT registration number
any VAT accounting schemes you use
the VAT on goods and services you supply, for example, everything you sell, lease, transfer or hire out (supplies made) the VAT on goods and services you receive, for example, everything you buy, lease, rent or hire (supplies received)
any adjustments you make to a return
the 'time of supply' and 'value of supply' (value excluding VAT) for everything you buy and sell
the rate of VAT charged on goods and services you supply
reverse charge transactions - where you record the VAT on both the sale price and the purchase price of goods and services you buy
your total daily gross takings if you use a retail scheme
items you can reclaim VAT on if you use the Flat Rate Scheme
your total sales, and the VAT on those sales, if you trade in gold and use the Gold Accounting Scheme

You also need to keep digital copies of documents that cover multiple transactions made on behalf of your business by:  volunteers for charity fundraising a third-party business employees for expenses in petty cash  You must add all your transactions to your digital records, but you do not need to scan paper records like invoices or receipts.

Question 3

What is ‘Making Tax Digital’?

Accepted Answer

There are two basic elements to this:

1. You must keep your bookkeeping, through to the VAT filing, on computerised systems. You cannot do it in ledger books/paper anymore;
2. The business government gateway website is gradually being taken down. If your bookkeeping software doesn’t have a facility for you to file your VAT Return, you will need bridging software. This is what we provide.

Question 4

What Data do you Send to HMRC?

Accepted Answer

We extract out of your spreadsheet the nine-box VAT Return figures and send those to HMRC.
HMRC do not get your spreadsheet. We do not keep anything you upload to us.

Question 5

How Do I Insert The 123Sheets Worksheet Into My Spreadsheet?

Accepted Answer

Watch this video:
https://www.youtube.com/watch?v=BVH8e7gi9Z8

‍or follow these steps:

1. Ensure you have both spreadsheets open on Excel: our worksheet and your bookkeeping spreadsheet;
2. Then, click on "View" then "View Side-by-Side". You should now see both spreadsheets at the same time: one above, one below on the same page;
3. Now pick up by the tab and drop either our worksheet into your spreadsheet, or vice versa to finish.

Failing that, you do not need to merge our worksheet into yours. You can keep the two spreadsheets separate, and use a formula to move your VAT Return nine-box figures to our spreadsheet and just upload that.

Question 6

Don’t I need to Put My Business Details in The Spreadsheet?

Accepted Answer

No. In order to file a return, you will set up an account with us and enter there those details there. When filing a return to HMRC, we send those details and your VAT Return figures to HMRC, so we do not need to ask you for them each time you submit a VAT Return.

Question 7

Do you Work with Sage, Quickbooks and Other Bookkeeping Software?

Accepted Answer

Yes, we have a section above for Sage and Quickbooks. As long as your software allows you to export the Return into Excel or a .csv file, you can use our software. If it will only export a PDF, you can use a free PDF converter on the internet to convert your file into an Excel file. We are looking to increase the number of automatic imports for different software. If your software isn’t listed, get in touch, and we may be able to provide an automatic import facility for you within a week or so.

Question 8

Do you Work with Different VAT Schemes?

Accepted Answer

Yes, we work with all VAT Schemes.

FRS, Groups, Partial Exemption, Capital Goods, Margin Schemes, Cash Accounting, Annual Scheme, Retail Schemes, Payments on Account etc can all use our software.Just ensure the figures on your return are calculated correctly according to your scheme rules and are put in the correct boxes as per the rules for your VAT scheme. (Eg: on the FRS, Box 6 is the Gross Sales (inc. VAT), and Box 1 is your FRS % multiplied by your box 6 figure – other boxes are normally zero).

Question 9

What Kind of Businesses do you Work With?

Accepted Answer

We work with all sizes of businesses, organisations and individuals.

Question 10

How do I Purchase Your Software?

Accepted Answer

Create an account with us. Do that by clicking on “Create Account” near the top of this page. Then log in to your account and select the ‘Purchase’ link.

Question 11

Can I Try This Software Before Buying?

Accepted Answer

Yes, you can use our Demo Version.

There is a ‘Try Before you Buy’ button below the video at the bottom of the ‘How does it work’ section above.

Question 12

Do you keep my Data Secure?

Accepted Answer

Yes, we have a section above dedicated to that, entitled “We Take Your Data Security Seriously”. Please read that.

Question 13

How Much Does it Cost?

Accepted Answer

Find below our pricing section. Please note that the multiple business options are only for HM Revenue & Customs registered tax agents, as only they can file VAT Returns for multiple businesses with one set of government gateway credentials.

Question 14

How Do I File My EC Sales List?

Accepted Answer

EC Sales Lists are not yet part of Making Tax Digital, so file those however you were filing them previously.

Making Tax Digital
for VAT