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Making Tax Digital for VAT (MTDfV) is now law and digital VAT returns will be required in the UK from 1 April 2019.
MTDfV is the first phase of the HM Revenue & Customs (HMRC) landmark Making Tax Digital (MTD) regime, which will ultimately require taxpayers to move to a fully digital tax system. HMRC hope that keeping records digitally will result in more timely and accurate recordkeeping, helping to prevent errors associated with manual processes.
Under the new rules, businesses with revenue above the VAT threshold (currently £85k) must keep digital records for VAT purposes and provide their VAT return information to HMRC using compatible software. Software providers are currently working with HMRC to ensure their software meets the MTD filing requirements.
The new rules have effect from 1 April 2019, where a taxpayer has a ‘prescribed accounting period’ which begins on or after that date.
HMRC is piloting MTDfV during 2018, ahead of its introduction in April 2019. Keeping digital records and making quarterly updates will not be mandatory for taxes other than VAT before April 2020, although businesses below the VAT threshold which have voluntarily registered for VAT can opt in.
For more information, contact:
+44 (0)20 7430 5966