Making Tax Digital for VAT (MTDfv) will be required from 1 April 2019. Pilot for MTDfv is in place, allowing for a year of testing before any businesses are mandated to use the system.
Business with an annual turnover exceeding £85,000 will have to maintain digital records for VAT purposes and provide their VAT return information to HMRC using MTD compatible software’s starting from 01 April 2019. If the business turnover drops to below £85,000 the business must continue to make MTD reports until it deregisters from VAT.
Any VAT registered business with a turnover of less than the VAT threshold, who have voluntarily registered are not obligated for MTD and will carry on with their usual method of submission unless they wish to opt in.
Keeping digital records and making quarterly updates will not be mandatory for taxes other than VAT before April 2020.
HMRC will not provide any free software’s to allow businesses to comply with their MTD obligations. All businesses will be expected to us commercial software or to develop their own in-house bespoke software to comply with MTD.
Any business that use bespoke software’s will need to register with HMRC as a software developer to gain access to the application programming interface (API) to write into their own bespoke software.
