What is Digital VAT Software?
Digital VAT software is an application that allows users to keep the records of their transactions and submit returns to HMRC. The Application Programming Interface (API) of the software is designed to manage and report the VAT of business entities directly to Her Majesty’s Revenue and Customs (HMRC). With these activities, digital VAT software eases the process of VAT returns for different kinds of businesses.
Generally, this programme makes it possible for businesses to keep track of their expenses and income anytime they want. Irrespective of the location of the user, the record of the VAT can be tracked and managed easily. In fact, the user can get up-to-date VAT report for any particular period without wasting time.
In the UK, digital VAT software is important for Making Tax Digital (MTD) initiative that was introduced by the government. The first deadline for implementation of MTD will be April 1, 2019. This deadline is for businesses with an annual taxable turnover of more than £85,000. By April 1, 2020, businesses with a taxable turnover of £10,000 will be required to have digital VAT software that is compatible with MTD.
As a result of the MTD initiative, there are tons of digital VAT software on the internet for users today. Since many of the systems do not function optimally, it is essential for users to select effective and affordable software that can meet their needs.
Who can use digital VAT software?
Digital VAT software is for almost everybody. Those that can use it include but not limited to:
- Self-employed individuals
- Micro-businesses
- Landlords
- Medium businesses
- Individual taxpayers
Primarily, only a few entities are exempted from using digital VAT software. These entities typically include businesses or individuals that have restrictions from using the internet. The restrictions may be due to age, remote location, religion or disability. Without these restrictions, all parties must use digital VAT software to file their tax returns and submit them.
Different types of the digital VAT software
Based on their modes of functions, these are the types of digital VAT software.
- Digital VAT software that the users can utilize for keeping digital records of their income, expenses and other transactions. They can also use it to file returns through the Application Programming Interface (API) of HMRC.
- Digital VAT software that functions like bridging software. This application uses the return information in an existing spreadsheet and submits it to HMRC through their API.
When it comes to digital VAT software, the features are very important. Different software comes with different features. Feature-packed digital VAT software is usually complex and specifically meant for specialized functions. Simple VAT software can be easy to use and affordable.
Need exceptional digital VAT software that can take care of your tax needs? If yes, MTD for VAT is your best bet. The software is fast, simple to use and HMRC compliant. Get the solutions you need for your tax returns by choosing this software.
