Effective 1 April 2019, HMRC intends to digitise VAT accounting and consequently, from that date, all businesses that make taxable supplies above the VAT registration threshold of £85,000 will be required to submit their VAT return information to HMRC through Making Tax Digital (MTD) compatible software.
These proposed changes will mean it is essential for all VAT registered businesses to keep accurate, up to date digital records enabling them to provide HMRC with the correct information at the correct time. The information that businesses will be required to preserve digitally in this manner include business details such as name, address and VAT registration number as well as the VAT account from which VAT return information will be directly taken and other information regarding supplies provided and received.
Testing of this new system is currently underway, initially with smaller businesses. Larger businesses with more complex VAT requirements are expected to join trials later in the year in the run up to implementation in April 2019.
The requirement for all businesses to use MTD compatible software to collate and submit VAT return represents a major change in how UK businesses account for VAT and communicate with HMRC. Therefore, if you have any queries about how these upcoming changes will affect your business and how it requires you to account for VAT, please do not hesitate to contact one of our expert consultants here at Brightwell Barns on 01473 558866 or email firstname.lastname@example.org.