|, MTD, Compliance, Digitalisation, Tax|MTD for VAT: What you need to know with less than 4 months to go

MTD for VAT: What you need to know with less than 4 months to go

The market is flooded with information and news around Making Tax Digital (MTD). That will only continue as we head closer to the deadline. Staying on top of the developments from HMRC as we head closer to the deadline is paramount. HMRC continues to announce new information around the move.

By the end of the first quarter of 2019, we will not only be preparing to transition to Making Tax Digital (MTD) but will understand what Brexit will look like and its impact. While the debate around Brexit continues, HMRC has confirmed that Brexit will not impact their initiative and delivery of MTD for VAT is continuing as planned.

That said, HMRC did add that delivery of the MTD for Income Tax project will be slowed down to accommodate Brexit projects.

At the same time as they officially launched the pilot for MTD for VAT in October last year, HMRC also announced that they would be giving a small group of customers with more complex requirements a further six months to prepare.

You can read the full announcement on the HMRC website, but this is essentially what you need to know:

  • For a small minority of businesses that have more complex requirements, HMRC has deferred mandating by six months to allow them sufficient time for testing the service in the pilot before they are mandated to join.
  • These organisations will, therefore, have until 1 October 2019 to start keeping records digitally and to start using MTD-compatible software to send their VAT returns to HMRC.
  • For all other VAT registered businesses with a turnover of more than £85,000, the mandating date for MTD for VAT remains 1 April 2019.
  • The deferment applies to an organisation falling into one of the following categories:
    • Trusts
    • Any not for profit organisation that is not set up as a company
    • VAT divisions
    • VAT groups
    • Public sector entities that are required to provide additional information on their VAT return (such as government departments and NHS trusts)
    • Local authorities
    • Public corporations
    • Traders based overseas
    • Those required to make payments on account
    • Annual accounting scheme users

HMRC estimates that deferral will apply to around 3.5% of mandated customers, which means that most of your VAT registered clients will still need to be ready for MTD for VAT from April as originally planned.

For the more information about what is changing and what is fact vs fiction click here.

CCH OneClick is fully compatible with HMRC’s requirements for MTD for VAT and a number of our customers are already making submissions in the pilot. If you would like to find out more about our end-to-end MTD solution, click here.

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2019-02-07T13:13:50+00:0018 January 2019|Categories: Practices, MTD, Compliance, Digitalisation, Tax|Tags: , , , , , , |