Making Tax Digital – Are HMRC too busy with Brexit?
February 19, 2018
While undoubtedly Brexit is posing an enormous challenge for HMRC especially in relation to VAT legislation and how this will be written into UK law HMRC recently published draft regulations regarding Making Tax Digital for VAT.
The proposed legislation makes changes to the VAT regime which would be effective from 1 April 2019. It would require businesses with taxable turnover above the VAT registration threshold (currently £85,000) to keep and preserve digital records and submit VAT returns to HMRC using functional compatible software.
It is imperative that businesses who are VAT registered commence talking to their advisers with regards to MTD as soon as possible especially those who do not currently use any software. VAT returns going forward must be filed directly from software and following April 2019 filing of returns via government gateway will no longer be possible.
Obligations for VAT under MTD will commence for the first VAT return period beginning after 1 April 2019. This may therefore be part way through a business’s financial year. All businesses submitting quarterly VAT returns should have commenced filing under MTD by October 2019 and will have been required to maintain records digitally from 1 June 2019 at the latest.
MTD will be available on a voluntary basis to other businesses, for both VAT and income tax. Once a business is required to keep digital records, this requirement remains in place even if that businesses turnover falls below the threshold if that business remains registered for VAT.
If you would like to discuss corporation tax relief in more detail, or you would like to speak with a member of our team, please contact Victoria Dadswell or call 01772 821021 to be put in contact with a member of our Tax team.