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News added on 20.07.2018

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MTD for VAT rules published

HMRC has published VAT Notice 700/22 to explain the Making Tax Digital rules in further detail. What do you need to know?

Which business do the rules apply to? From 1 April 2019, all business with a taxable turnover that exceeds the VAT registration threshold (currently £85,000) are required to store their VAT records digitally and submit VAT returns via an interface with HMRC software. If the turnover subsequently falls below the threshold the business will still be required to comply with the rules unless you deregister. The rules apply from the first VAT period starting on or after 1 April 2019.

Which records need to be recorded digitally?

  • the business name
  • the address of the principal place of business
  • the VAT registration number
  • any VAT accounting schemes that the business uses

For each supply the business makes you must record the:

  • time of supply (tax point)
  • value of the supply (net value excluding VAT)
  • rate of VAT charged

For each supply the business receives you must record the:

•     time of supply (tax point)

•     value of the supply

•     amount of input tax that will be claimed

How will the VAT return be submitted? Agents will need to sign up to a new agent services account to use Making Tax Digital services on behalf of their clients. The agent must have software of their own or have access to the software that holds their client’s digital records. Specific software will be able to collate and prepare the VAT return based on the digital records. It will then ask you to confirm that you want to submit the return to HMRC on behalf of your client. Tip. If you are already authorised to act on behalf of your clients for VAT purposes there is no need to obtain fresh authorisation for the Making Tax Digital for VAT service.

The full notice can be found here https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat#check-if-you-have-to-follow-the-making-tax-digital-rules .

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