From April 2019 the first phase of making tax digital (MTD) came into force for Vat. This means that all vat registered businesses with a turnover of more than £85,000 (the current vat threshold) will have to keep digital vat records and will have to submit Vat returns using compatible software such as Sage or Xero. You will no longer be able to submit Vat returns on the HMRC website. You will you be able to keep your bookkeeping (for vat purposes) on Excel spreadsheets but this will then require transferring onto digital software which is MTD compliant.
Businesses voluntarily registered for vat and with taxable turnover below the vat threshold will not be subject to MTD for Vat. If your taxable turnover subsequently falls below the vat threshold you will still be required to comply with MTD for vat. The requirements of this will only cease to apply if you deregister. Businesses are also exempt from MTD if in the previous 12 months their taxable turnover was below the vat threshold and in that previous 12 months they were not part of the MTD regime.
WHEN MUST YOU START KEEPING VAT RECORDS DIGITALLY?
Your first digital vat submission will need to be made for your first vat period commencing on or after 1st April 2019. So for instance if one of your vat quarters is 1st April 2019 to 30th June 2019 you will need to start entering all of your transactions into digital accounting software from 1st April 2019. Your first return under the new regime will require submitting to HMRC by 7th August 2019.
MAKING OTHER TAXES DIGITAL
Making Income Tax and Corporation Tax digital will not come into force until April 2020 at the earliest.
FIND OUT MORE
For more information, get in touch with on Sheffield 0114 345 0960 or Nottingham 0115 882 0356