Making Tax Digital Update
There are less than 5 months to go now before the start of Making tax Digital (MTD) for VAT. From April 2019, businesses that are VAT registered and have a taxable turnover above the VAT registration threshold (currently £85,000) will be required to keep digital VAT records and submit VAT returns using MTD compatible software. Businesses below the VAT threshold can sign up for MTD voluntarily.
MTD deadline deferred for some 'complex' businesses
HMRC has recently announced that the start date has been deferred until October 2019 for a small minority of VAT-registered businesses with "more complex requirements". These include trusts, "not for profit" organisations that are not set up as a company, VAT divisions, VAT groups, public sector entities that report additional information such as government departments and NHS Trusts, local authorities, public corporations, traders based overseas, businesses required to make payments on account and annual accounting scheme users.
There were no further updates in the Autumn Budget in respect of MTD.
What information will digital VAT forms require?
The digital records required for MTD should include, for each supply, the time of supply (tax point), the value of the supply (net excluding VAT), and the rate of VAT charged. The digital records should also include the business name and principle business address, VAT registration number and details of any VAT accounting schemes used.
Businesses currently using accounting software should check with their provider to ensure that the software will be MTD compatible. And for those not currently using accounting software, it's definitely time to start investigating MTD compatible software.
Spreadsheets can be used to record and calculate the relevant information to be submitted to HMRC. However, bridging software will be required to submit the required information digitally to HMRC.
We will shortly be contacting all our clients in respect of MTD, but if you are not a client and wish to find out more please contact your local Perrys branch.