In my view… Making Tax Digital for VAT: Updated Guidance
Published 00:00 on 15 Jul 2019
Making Tax Digital for VAT requires VAT registered businesses with taxable turnover above the VAT registration threshold to keep records in digital form and file their VAT Returns using software.
Who must comply with MTD?
If your business is currently registered for VAT and its turnover is over the registration threshold of £85,000 then from 1April 2019 you are required to maintain electronic accounting records and file VAT returns using compliant software. This means that you will no longer be able to file your returns via HMRC's website, instead you must use MTD compliant software such as Xero, Quickbooks, Sage (certain versions) or bridging software.
The first VAT return that will be required to be filed by MTD software will be for periods beginning 1 April 2019 so if you are on a calendar quarter basis your first MTD return will be for the quarter ending 30 June 2019. Every business over the VAT threshold will need to have completed their first return by early October 2019 when the quarter June 2019 to August 2019 will be filed.
The 6-month deferral applies to customers who fall into one of the following categories: trusts, 'not for profit' organisations that are not set up as a company, VAT divisions, VAT groups, those public sector entities required to provide additional information on their VAT return (Government departments, NHS Trusts), local authorities, public corporations, traders based overseas, those required to make payments on account and annual accounting scheme users.
Sign Up for MTD
Most businesses will need to sign up for Making Tax Digital (MTD). This applies even if you have already been filing your VAT returns electronically.
01 April 2019
All VATperiodscstarting oncor after thiscdate mustcbe filed viacthe MTDcroute, focrbusinessescwho mustccomplyc(perabove).
30 June 2019
The first MTD VAT quarter ends on this date (unless you file monthly returns).
07 August 2019
This is the deadline for filing the first MTD VAT return for most businesses.
01 October 2019
MTD starts for more complex 'deferred' businesses (as outlined above).
Rizwan Khan, Audit Compliance Director, Lewis Brownlee, Director of Chichester Chamber of Commerce & Industry
Last updated 09:14 on 3 March 2021