When does Making Tax Digital for VAT start?
Over 96% of businesses affected by MTD need to start following the rules from the beginning of their first VAT period starting on or after 1 April 2019.
This includes businesses whose revenue exceeds the VAT threshold during the year, so keep an eye on your turnover. And it’s worth knowing that once you’ve gone over the £85k threshold, you’ll always be required to follow the rules for MTD, unless you de-register from VAT.
Businesses complying with Making Tax Digital for VAT will need to:
-Keep and preserve their VAT records in a digital form
-File their VAT returns quarterly (or more frequently)
-Using HMRC-recognised software
Around 3.5% of businesses can wait until 1 October 2019 before they need to follow the rules. These businesses can include:
-‘Not for profit’ organisations that are not set up as a company
-Traders based overseas
-Those required to make payment on account
-Annual accounting scheme users
How do I keep digital records?
Keeping and preserving your records in a digital form can be relatively easy . In fact, a lot of UK businesses use spreadsheets to help manage their finances, and may continue to do this for now. A spreadsheet is sufficient for recording and preserving your VAT records, but you’ll still need to link it with recognised software in order to file your return with HMRC.
What is HMRC-recognised software and where can I get it? – Please call us to discuss your options