Latest Industry News
18 Oct 2018
HMRC has launched a second pilot scheme for Making Tax Digital for VAT (MTD for VAT).
The Revenue has invited more than half a million UK businesses to test the system, ahead of the introduction of MTD for VAT on 1 April 2019.
From this time, firms with a taxable turnover above the VAT registration threshold (currently £85,000) will be required to keep digital records and provide quarterly updates to HMRC for VAT purposes, using functional compatible software.
The pilot is now open for businesses with ‘up-to-date and straightforward’ financial affairs. HMRC intends to extend the pilot to ‘most other business types’ over the coming months.
HMRC also announced that a small group of taxpayers with ‘more complex’ requirements will be given an additional six months to prepare for MTD for VAT, and will therefore not be mandated to use the system until 1 October 2019.
The six-month deferral applies to not-for-profit organisations that are not set up as a company; trusts; VAT divisions; VAT groups; local authorities; public corporations; and traders based overseas. Public sector entities required to provide additional information on their VAT return, those who must make payments on account and annual accounting scheme users are also covered by the deferral.
Commenting on MTD for VAT, Mel Stride, Financial Secretary to the Treasury, said: ‘HMRC is transforming the tax administration so that it’s more effective, more efficient and easier for taxpayers.
‘More and more businesses use digital tools every day to help them operate – tax shouldn’t be different. This is a major step towards bringing VAT into the 21st century.’
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