Making Tax Digital (MTD) is the biggest change in UK VAT legislation in recent history and means that from April 2019 businesses with a turnover above the VAT threshold (£85,000) will need to submit their VAT Returns through commercial software.
Please find enclosed our MTD compliance flowchart, which we have produced to help clients assess whether or not they are required to file quarterly returns to HM Revenue & Customs (HMRC) under the new MTD scheme.
If you are required to comply with MTD, it means that from 1 April 2019 you will need to:-
- Maintain VAT records digitally (and retain for a period of at least 6 years)
- Provide HMRC with quarterly returns using MTD compatible software.
VAT registered businesses with a turnover below the threshold are currently not required to use new software, but this may all change in 2020. You can, however, opt in early if you wish but once this is done it is not possible to opt out unless you are no longer VAT registered.