News Making Tax Digital

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 businesses do the rules apply to? From 1 April 2019, all businesses 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 your business will still be required to comply with the rules unless you deregister. The rules apply from your first VAT period starting on or after 1 April 2019. A ‘VAT period’ is the inclusive dates covered by your VAT Return.

Which records need to be recorded digitally?

  • your business name
  • the address of your principal place of business
  • your VAT registration number
  • any VAT accounting schemes that you use

For each supply you make you must record the:

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

For each supply you receive you must record the:

•     time of supply (tax point)

•     value of the supply

•    amount of input tax that you will claim

How will the VAT return be submitted? Specific software will be able to collate and prepare the VAT return using your digital records. It will then show the return to you and ask you to confirm that you want to submit it to HMRC. Alternatively you can use an agent to keep and maintain your digital records and submit the return on your behalf.

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