The start date for this is now only 15 days away
Below is a quick recap of the basic information you need to be aware of:
MTD for VAT will start in April 2019. It will require businesses to a) keep records in a digital format and b) submit VAT returns using commercial software (not via the existing government gateway account as many returns are filed at present). The detailed requirements have been published by HMRC in VAT notice 700/22.
1 April 2019 – MTD starts for non-complex businesses over the £85,000 VAT threshold for VAT periods beginning on or after 1 April 2019.
7 August 2019 – First MTD VAT filing deadline for quarter-ends 30 June 2019 (electronic payment only otherwise 31 July 2019)
1 October 2019 – Complex businesses who deferred have to submit returns via MTD for VAT periods beginning on or after 1 October 2019.
VAT Quarter Return Period – First MTD Filing Deadline (If making payment electronically, otherwise 31 July, 31 August and 30 September
1 April 2019 – 30 June 2019 = 7 August 2019
1 May 2019 – 31 July 2019 = 7 September 2019
1 June 2019 – 31 August 2019 = 7 October 2019
Businesses that have voluntarily registered for VAT do not, at present, need to comply with MTD for VAT requirements.
The start date for MTD for VAT is deferred until 1 October 2019 for complex businesses. Complex businesses that fall within this group are: trusts, not-for-profit organisations that are not companies (Including some charities), VAT divisions, VAT groups, those public-sector entities required to provide additional information alongside their VAT return (such as government departments and NHS Trusts), local authorities, public corporations, traders based overseas, those required to make payments on account and annual accounting scheme users.
Exemptions from MTD
Some businesses may be able to claim exemption from MTD if any of the following apply:
- On religious grounds, if the business is run entirely by practicing members of a religious society for whom compliance with MTC is incompatible with their beliefs.
- If it is not reasonably practicable for the business to use digital tools to keep records for reasons of age, disability, remoteness of location or for any other reason.
- The business is subject to an insolvency procedure.
If businesses believe that they fall into one of these categories they will need to contact the HMRC VAT Helpline to discuss alternative processes for submitting VAT information.
Keep Digital Records
For VAT periods beginning on or after 1 April 2019 VAT registered clients will have to keep records supporting the VAT return in a digital format and retain these for 6 years. Individual records of each transaction supporting the VAT return will need to keep digitally, though there are some exceptions to this for certain VAT schemes.
Physical invoices and receipts for expenses can be scanned or kept in paper files.
Digital formats include fully digital, MTD compliant, bookkeeping software, Excel spreadsheets and ‘API enabled spreadsheets.’
You will have already received a letter from HMRC re-signing up for Making tax digital but the timing of sign up is important.
Window for Signing Up
- After all non-MTD VAT returns have been filed
- If business pays by direct debit don’t sign up
Within 15 working days before a submission deadline or
Within 5 working days after a submission deadline
HMRC seeking to ease this restriction esp. for monthly filers
- Wait for confirmation of successful sign-up before filing (may take 72 hours)
Example: first MTD return Apr/May/Jun 19 – Pay by Direct Debit
- Last non-MTD return submission deadline: Tuesday 7 May 2019
- Leave clear 5 working days after a submission deadline if paying by DD
- First possible date to sign up to MTD for VAT: Wednesday 15 May 2019
- VAT quarter ends 30 June 2019
- First MTD Vat return submission deadline: Wednesday 7 August 2019
- Leave clear 15 working days before a submission deadline in paying by DD
- Last possible date to sign up to MTD for VAT; Tuesday 26 July 2019