20 August 2018
As we approach the fundamental changes to VAT return submission coming into force next year, HMRC have issued their formal guidance on the changes. Read the full guidance here.
Making Tax Digital (‘MTD’) will change VAT return submissions with other taxes due to follow. This follows continuing trials and some concessions around the amount of information required and clarification relating to the use of the data. HMRC have confirmed there will be no free software but they are working with providers to develop suitable products.
As we discussed in our Making Tax Digital for VAT – what you need to know blog in June 2018, MTD will apply to VAT-registered organisations which exceed the VAT registration threshold of £85,000, meaning any businesses that are voluntarily VAT-registered will not be affected. The main two requirements for businesses which are required to comply with MTD are:
- To keep digital records of all transaction details, using software that is capable of linking directly to HMRC’s systems
- To report the VAT return data via that software directly to HMRC, within five weeks of the end of their VAT quarter.
HMRC estimate they lost £3.5bn in revenue through VAT return errors in the 2015 tax year alone, and these changes are intended to help reduce these losses.
More guidance on MTD will be released as we get nearer the deadline, and we will continue to post updates. At UHY Hacker Young, we are already working with clients to ensure they are compliant and can manage this change. If you would like to discuss how this might impact your business please do not hesitate to contact me or your local UHY VAT specialist.
Alternatively, fill out our contact form here.