Stan Dencher, specialist tax writer at Croner-i examines some practical examples of how Making Tax Digital for VAT will change the way companies submit their quarterly VAT numbers via digital reporting from 1 April 2019
Making Tax Digital (MTD) for VAT does not change what information is submitted to HMRC, just how it is submitted. An accounting software package uploads the information for the VAT return directly to HMRC’s portal, or an Excel plug-in extracts the data and uploads it directly to HMRC.
MTD requires VAT-registered businesses with taxable turnover above the VAT registration threshold of £85,000 (frozen until 2019/20 to keep records in digital form and file VAT returns using software. The date for integrating VAT into MTD is 1 April 2019. For a person within MTD at 1 April 2019, this means that:
• VAT records must be kept digitally from 1 April 2019; and
• VAT returns must be submitted digitally for return periods starting on or after 1 April 2019 using MTD-functional software that is compatible.
