Making Tax Digital for VAT
- 21st June 2018
- Posted by: Hamill / McIlwaine
- Category: VAT
New regulations to bring into force Making Tax Digital (MTD) are now law, and digital VAT returns will be required from 1 April 2019. Full MTD is not scheduled to be required until April 2020 at the earliest.
MTD for VAT is the first phase of HMRC’s MTD regime, which will ultimately require taxpayers to move to a fully digital tax system.
Under the new rules, businesses with a turnover above the VAT threshold (currently £85,000) must keep digital records for VAT purposes and provide their VAT return information to HMRC using MTD functional compatible software. The HMRC will remove the ability to file VAT returns using the HMRC Gateway as part of this change.
The new rules have effect from 1 April 2019.
Keeping digital records will mean it is likely that third party commercial software will be required. HMRC have confirmed they will not be providing any software. The use of spreadsheets will be allowed, but they will have to be combined with add-on software to meet HMRC’s requirements. Some of the options available are shown on our Acc Software page.