Hilary Budd, senior VAT consultant at Croner Taxwise, discusses the criteria for a limited company to be enrolled in Making Tax Digital (MTD) by explaining what is classed as taxable turnover
Question: My client works through her own limited company, providing public relations and marketing consultancy to businesses in the UK and all over the world. The business is VAT registered in the UK on a voluntary basis; is she going to be affected by MTD?
Answer: This a question we are regularly asked. Any entity with a taxable turnover that is above the VAT registration threshold on 1 April 2019 must follow the MTD rules, so essentially the question here is what is included within ‘taxable turnover’?
Taxable turnover for MTD is the same as taxable turnover for VAT registration purposes. HMRC’s VAT Notice on MTD (700/22) rather ambiguously states that ‘VAT taxable turnover is the total value of everything you sell that is not exempt from VAT’. It refers readers to VAT Notice 700/1: Should I be registered for VAT, which provides details in section 2, but this is not simple to understand, so we have provided some general clarification below.
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