Yes and No, in the UK, we already have to logon to the HMRC website and input the VAT return details there. There is no manual paper return if you mean people posting the VAT Return to HMRC. It’s already digital in that every company has to login to the website and put their VAT details in.
However Making Tax Digital is also about getting rid of Paper Bookkeeping yes in that we are required to have all our records digital i.e. on the computer. Manager already does this.
The concern is now about this requirement to have software that connects directly to the HMRC website to do the VAT return, Corporation Tax Return etc. While a lot of things are not clear, it is very clear that you have (or your agent has to have) some software that is able to connect to the HMRC and upload and pull the data from the VAT Return form and the Corporation Tax Figures etc. It does not need to have access to the individual transactions however. In addition, the software needs to support the HMRC nudge system as in receive data from the HMRC website.
Here are the requirements that Manager would need to fulfull.
Commercial software must be able to:
• Keep records in a digital form.- Manager supports this
• Preserve digital records in a digital form. - Manager supports this
• Create a VAT return from the digital records. - Manager supports this
• Provide HMRC with VAT data on a voluntary basis. - Manager does not support this
• Receive information from HMRC via the API (application programme interfaces) platform. This will allow HMRC to send ‘nudges’ to the business/agent. - Manager does not support this
What is not clear is whether you can use a separate program to upload and receive from the HMRC and keep Manager separate from the HMRC as I don’t want the HMRC to have too much access to my accounting program on the basis of hacking, malware etc!