Making Tax Digital for VAT
27th February 2019
There’s no getting away from it: less than five weeks now remain until Making Tax Digital (MTD) comes into effect for some VAT-registered businesses.
MTD is the Government’s scheme to digitise the way all tax outside of PAYE is submitted, and businesses with taxable turnover of more than £85,000 a year are up first.
From 1 April 2019, businesses completing monthly VAT returns will be the first into the regime.
For businesses completing quarterly VAT returns, those with return quarters ending 30 June will be next into the regime. They will be followed on 1 May 2019 by businesses with VAT return quarters ending 31 July.
HMRC intends to have most VAT-registered businesses using MTD from 1 June 2019, which is when those with return quarters ending 31 August join.
The regime will apply to the last group of VAT-registered businesses, those with complex accounts, from 1 October 2019.
Making Tax Digital: record-keeping duties
Businesses will need to keep digital accounting records under MTD and use HMRC-approved software.
These records include your business’s name, its address, VAT-registration number, and details of any VAT accounting schemes used.
For any supplies your business makes, you need to record the time and value or the supply, and the VAT rate charged.
Each transaction will need to be recorded and submitted to HMRC digitally, however, you can also keep these records in paper form if you want.
Making Tax Digital: submissions and dates
Businesses completing monthly VAT returns will make their first digital accounting records submission on 7 May 2019.
Owing the phased rollout of MTD for quarterly VAT-registered businesses, the first group of quarterly VAT-registered businesses out of the blocks will also be the first to submit digital accounting records on 7 August 2019.
The second and third groups quarterly VAT-registered businesses will have until 7 September 2019 and 7 October 2019, respectively, to submit their digital records to the Revenue.
All submissions after these dates will be in line with your monthly or quarterly accounting periods.
We have been preparing businesses with VAT obligations for MTD for quite some time now and have been assisting clients in understanding the process, so we are all set for 1 April.
Drop us an email at firstname.lastname@example.org or pick up the phone and call us on 0117 305 2600 to find out more.