United States

What U.S. companies need to know about Making Tax Digital


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Designed to ensure a more timely and accurate recording and submission of value-added tax (VAT) accounting data, Making Tax Digital aims to reduce the errors associated with manual processes. The transition to Making Tax Digital (MTD) represents one of the most fundamental changes to the United Kingdom (UK) tax system in a generation.

The MTD initiative is part of a wider objective designed to make it easier for multiple jurisdictions to work more closely together in exchanging information. MTD for VAT will mean significant changes to the way a business records and communicates VAT information to Her Majesty’s Revenue and Customs (HMRC). These changes will inevitably mean new processes, procedures and possibly new software in order to be compliant. U.S. companies with UK VAT registration will be required to augment and revise their VAT filing processes.

For all VAT returns starting on or after April 1 or Oct. 1, 2019, VAT registered businesses trading over the VAT registration threshold will be required to keep records in digital form and submit their VAT returns using MTD compatible software. Companies should understand what records must be recorded in the electronic account and the functional compatible software necessary to support each VAT return. If your company is currently filing VAT in the UK, it is likely that these changes will mean new processes, procedures and new software implementation to be compliant.

If your company is currently filing VAT in the UK, it is likely that these changes will mean new processes, procedures and new software implementation to be compliant.

Read our whitepaper to find:  

  • An overview of Making Tax Digital
  • Approaches to functional compatible software
  • Digital records requirements


How RSM can help

RSM is able to support its clients in their MTD journey in a number of ways.

  • RSM offers an MTD Readiness Review, which involves an initial assessment of your current compliance status, a report of our findings and an action plan for implementing your compliance solution. During the review, we will examine:
    • The quality and appropriateness of your VAT data and processes
    • Gaps in your data, including where data needs to be moved into a digital format or application
    • Your options for compliance, including the pros and cons of each option and our recommendation for a path forward
  • RSM offers a global VAT compliance outsourcing service (known as Global VAT Compliance & Reporting–GVCR), which leverages leading software to automate the compilation and submission of its clients’ VAT returns and associated reports. For clients using this service, the submission of returns through the new MTD portal will be done as part of the existing service and typically without additional charge.

RSM is also able to offer a stand-alone delivery service. In this model, clients provide us with some initial company data (names, addresses and other basic information) and, once that is set up in our software, they simply send us their completed VAT return information on a periodic basis. RSM will then submit the filing information through its MTD-compliant application. There is a fee for this service based on the number of submissions made on a client’s behalf.

If you have any questions about MTD and your company’s readiness for this major change, please reach out to your RSM specialist or to chris.walsh@rsmus.com.


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