Multiple software programs permitted for MTD for business

Businesses with taxable turnover above the VAT registration threshold will be required to keep and preserve digital records and provide VAT returns using compatible software.

This has been confirmed in draft regulations published by HMRC together with a draft explanatory memorandum and draft notice to make changes to the VAT regime from 1 April 2019.

In an addendum to notice HMRC states that the complete set of digital records to meet Making Tax Digital for business requirements do not all have to be in one piece of software. If there is a digital link between the pieces of software records can be kept in a range of compatible digital formats.

Functional compatible software is a program or set of compatible programs that must be able to:

• record and preserve electronic records in an electronic form;
• provide to HMRC information...