VAT-registered businesses with a taxable turnover above the VAT threshold are required to use the Making Tax Digital (MTD) initiative to keep records digitally and use software to submit their VAT returns for periods starting on 1 April 2019.
While it may take time to adjust to new systems, MTD will help to make your tax administration more efficient and accurate.
Following initial feedback, HMRC announced an extension to the deadline for a number of more complex business types. If your business is one of the following, you have until 1st October 2019 to prepare for MTD:
- ‘Not for profit’ organisations that are not companies (this includes some charities)
- VAT divisions and VAT groups
- Public sector entities that are required to provide additional information alongside their VAT return (such as Government departments and NHS Trusts)
- Local authorities and public corporations
- Traders based overseas
- Those required to make payments on account
- Annual accounting scheme users
Michelle Downs, who works at Perrys Chartered Accountants, said:
“October may seem like a long way off at the moment, but you need to start preparing for the changeover now if you haven’t already begun. It’s particularly important to ensure that you choose the most relevant MTD-compatible software. If your company has deferred MTD, and you haven’t already done so, I recommend making a start on preparations now.”
Businesses can check HMRC’s website for its most recent advice on MTD.