Ahead of Making Tax Digital (MTD) becoming mandatory for many businesses from 1 April 2019, HMRC have started to issue letters to taxpayers telling them about the changes and inviting them to join the MTD for VAT pilot scheme.
The way you send HMRC your VAT information is changing and most VAT registered businesses with turnover of more than £85,000 will, from April 2019, be required to keep VAT records and submit VAT returns under the new MTD regime.
HMRC are in the process of sending letters out to VAT registered business in phases with some 20,000 letters already in the hands of customers. If you haven’t received your letter yet you can expect to hear from HMRC between now and January. The letters are essentially encouraging businesses to ‘early adopt’ by entering into a pilot scheme ahead of the mandatory start date. To use the pilot scheme you will need to keep digital records and submit your VAT return digitally using HMRC approved software. Whilst there are potential benefits to joining the scheme – not least, it will give you the chance to have a ‘test run’ at submitting – it should be noted that once you are in the MTD regime you may not be able to opt back out and it is essential therefore that you ensure your systems are ready to go before signing up.
It is also worth noting that businesses which are considered to have ‘complex’ VAT issues (see our previous blog on this subject), and are subject to a deferred mandatory start date of 1 October 2019, will not be able to join the pilot scheme yet. Businesses which are considered to be ‘complex’ and therefore not required to enter into MTD before 1 October 2019 can expect confirmation of this position from HMRC before the end of this year. A further pilot scheme will be introduced for ‘complex’ businesses next year.
On the 17th January we are running a ‘Making Tax Digital for VAT’ seminar at our office in Leeds. For further information on this seminar please email firstname.lastname@example.org.
To receive our MTD fact sheet and if you have any questions in the mean time please email email@example.com.