MTD for VAT latest
HMRC is phasing in its landmark Making Tax Digital (MTD) regime, which will ultimately require taxpayers to move to a fully digital tax system.
Under the rules, businesses with a taxable turnover above the VAT threshold (currently £85,000) must keep digital records for VAT purposes and provide their VAT return information to HMRC using compatible software. The rules were effective from 1 April 2019 where a taxpayer has a ‘prescribed accounting period’ which begins on that date, or otherwise from the first day of a taxpayer’s first prescribed accounting period beginning after 1 April 2019.
However for some VAT-registered businesses with more complex requirements the rules do not take effect until 1 October 2019. Included in the deferred start date category are VAT divisions, VAT groups and businesses using the annual accounting scheme.
Businesses in the deferral group should have received a letter inviting them to join the MTD for VAT scheme. The scheme will be mandatory for the first VAT return period starting on or after 1 October 2019. The letter encourages businesses to join early in order to be prepared for 1 October 2019. However, it does highlight that once a business has joined MTD for VAT, the old system of filing VAT returns can no longer be used.
HMRC has announced that those entities that use the GIANT service for VAT will have their deferral period for MTD further extended. A mandation date has not yet been confirmed. GIANT is the ‘Government information and NHS Trust’ service, a special online system that is used by the public sector bodies, such as the NHS trusts and government departments, to file additional information with their VAT returns.
Those affected should have received a letter in June from HMRC informing them of the extension to their deferral period. HMRC will write again later in the summer with details of the revised timetable. Further details can be found at the GOV.UK MTD website.
If you would like to discuss any issues relating to MTD for VAT please feel free to contact us by calling 01823 218550 or email to firstname.lastname@example.org