Are you ready for VAT filing changes April 2019?Source: HM Revenue & Customs | | 12/12/2018
The introduction of Making Tax Digital (MTD) for VAT is fast approaching.
From April 2019, some 1 million businesses with a turnover above the VAT threshold (currently £85,000) will have to keep their records digitally (for VAT purposes only), and provide their VAT return information to HMRC through MTD compatible software. The deadlines for sending VAT returns and making payments are not changing.
Businesses with a taxable turnover below the VAT threshold can also opt to use MTD for VAT if they so wish. Businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until 'at least' 2020.
HMRC launched a private beta pilot of MTD for VAT in April 2018 and the pilot is now open to most VAT registered businesses and their agents. It is important that businesses are aware of these upcoming changes, and are preparing for the fast approaching deadline and considering whether it would be beneficial to join the MTD pilot.
HMRC has also deferred the introduction of MTD for VAT for a small minority (circa 3.5%) of businesses that have more complex requirements until 1 October 2019. This includes trusts, ‘not for profit’ organisations that are not set up as a company, VAT divisions, VAT groups and those required to make payments on account and annual accounting scheme users.
HMRC has also agreed to give businesses until 31 March 2020 to make sure there are digital links between software products. This means that during the first year of MTD for VAT, businesses who use more than one software programme to keep their VAT records and prepare and file returns, will not be required to have digital links between those software programmes. From March 2020, bridging or MTD-compatible software will be required so that this information can be digitally sent to HMRC with no manual intervention.