The first 20,000 HMRC letters have been sent out, informing people that as from April next year it will be mandatory for all UK taxpayers registered for VAT, with turnover over £85,000, to comply with the new Making Tax Digital (MTD) rules for VAT. This is the precursor to the full rollout of MTD for income and corporation tax expected in 2020.
The new rules will mean that all VAT registered taxpayers will have to retain and submit all VAT information and returns in a digital format. This is not necessarily the same as what you may be doing at present where the VAT return information is manually entered via your online VAT account with HMRC.
Particular issues you may need to address are:
- You may need to contact your software supplier and seek confirmation that the software you use will be MTD compliant.
- If in addition to your accounting software you use a spreadsheet, you will need to check with your software supplier that this can be accommodated with their upgrade.
- If you use a combination of different software systems or spreadsheets, you may need to acquire a product that will allow a VAT return to be filed via HMRC’s Application Programme Interface.
HMRC has produced a dedicated webpage that contains a full list of software that is compliant with the new regulations: https://www.gov.uk/government/publications/software-suppliers-supporting-making-tax-digital-for-vat/software-suppliers-supporting-making-tax-digital-for-vat
- On November 19, 2018