Although there were rumours that there might be a delay, Making Tax Digital as regards VAT is going ahead from 1st April 2019. There is still no decision on when other taxes will become digital.
Who does MTD on VAT affect? Essentially it will apply to all VAT registered businesses and registered landlords above the VAT threshold of £85,000 sales per year. Businesses below the threshold can join the scheme if they wish but, having done so, it will be virtually impossible to withdraw unless the business is ceasing.
What will it mean? Businesses will have to maintain their accounting records digitally in a software product or spreadsheet. Existing spreadsheets will need to have a bridging interface before they can become usable. Paper records can no longer be used for VAT. They will also submit their VAT returns using a suitable commercial software product which can access HMRC. The existing HMRC website will no longer be available to businesses inside the MTD regime.
What will stay the same? All the VAT rules remain unchanged. The information submitted to HMRC will not be altered. There will still be the same nine boxes as now. There will be no change in the current deadlines for filing or payment.
So, now is the time to check that your software is compliant. MTD will apply to the first VAT Return which begins on or after 1st April 2019. If you need help, call us.