Making tax digital for UK companies

[georgio]

For Uk Ltd.s, since April 2022, it's obligatory to provide VAT tax declarations digitally (an excel that contains all transactions in a specific format, or connect the software directly to your bank).
What does this mean? More control for transactions (nature of revenues and expenses)?
Curious to know why they did it, and how it's used..

 

[Candoit]

This totalitarian government is making it out as if they're doing you a favor, it's just the beginning of the end game.

..HMRC’s VAT change is just the first step in the move towards the full digitisation of tax in the UK. The government plans to widen the legislation to all other business taxes such as income tax and National Insurance.... from HMRC’s new digital VAT rules – 6 steps for submitting tax returns correctly - Small Business UK

 

[CoinMaster]

UK is doing what most Scandinavian countries have done for several years already!

 

[fshore]

For Uk Ltd.s, since April 2022, it's obligatory to provide VAT tax declarations digitally (an excel that contains all transactions in a specific format, or connect the software directly to your bank).
What does this mean? More control for transactions (nature of revenues and expenses)?
Curious to know why they did it, and how it's used..

It means that you can't make the excel manually. It has to be exported digitally from your sales platform (website etc), or directly linked from website or stripe etc to an accounting software, and then vat returns are filed from the accounting software.

Easiest is if your accounting software can connect to your website to import sales. Or you might be able to use zapier to link the two.

 

[georgio]

Actually, you can prepare the excel manually. Then you can use an MTD bridge software, to submit the excel.
I wonder, if they have direct access to the bank account info, or is just the information provided in the excel
(which by the way, has to be in a specific format, prepared by an accountant)

 

[fshore]

Actually, you can prepare the excel manually. Then you can use an MTD bridge software, to submit the excel.
I wonder, if they have direct access to the bank account info, or is just the information provided in the excel
(which by the way, has to be in a specific format, prepared by an accountant)

You can not prepare the excel manually if the sales are from your website etc. If you receive cash etc then you can put the numbers in manually to create your digital records.
The point is that you can not transfer the values manually. If you download a csv with your amazon sales then this is your digital records, and you can't transfer these manually to another excel. You'd have to find a way to transfer it electronically.

The is not related to a bank account. They can get access to bank accounts if they need. But I'd assume they'd start by auditing you before asking banks for information directly.