Latest on making VAT digital
Making Tax Digital (MTD) for VAT looks set to go ahead, despite repeated calls for postponement. The only concession will be a six-month deferral for businesses with more complicated VAT affairs.
A House of Lords committee strongly recommended putting off the introduction of MTD for at least a year, but so far without any effect.
MTD will be required for most VAT-registered businesses from 1 April 2019, but those who prepare their VAT returns on an annual basis can defer entry until 1 October 2019. The later start date also applies to:
- Businesses registered in divisions or as part of a VAT group.
- Overseas based traders.
- Larger businesses that are required to make payments on account.
HMRC has now opened up its MTD for VAT pilot to most businesses to help them prepare for the introduction of the scheme. Eligibility is being extended, although partnerships and those trading with the EU will have to wait a bit longer. The pilot will be available to deferred-entry businesses from spring 2019.
With the start date for MTD now just a few months away for most businesses, it is essential for you to check with your software provider that their products will be ready in time. HMRC regularly updates their list of software suppliers, and helpfully splits the list between those with products available now and those whose products are still in development.