HM Revenue & Customs (HMRC) is phasing in its Making Tax Digital (MTD) regime which will ultimately require taxpayers to move to a fully digital tax system. The first area to be affected by MTD will be VAT. The new rules for Making Tax Digital for VAT (MTDfV) will be implemented from April 2019.
Under the regulations, businesses with taxable turnover above the VAT threshold must keep digital records for VAT purposes and provide their VAT return information to HM Revenue & Customs using 'functional compatible software'. These new regulations take effect for VAT return periods beginning on or after 1 April 2019.
HMRC has published VAT Notice 700/22: Making Tax Digital for VAT. This Notice defines 'functional compatible software' and the transaction-level data that needs to be recorded and retained within the software.
Under the new MTD regulations, businesses will have to use a software program or set of compatible software programs which can connect to HMRC systems via an Application Programming Interface (API). The software must be capable of:
- keeping records in digital form as specified by the new rules
- preserving digital records in digital form
- creating a VAT return from digital records held in compatible software and submitting this data to HMRC digitally
- providing HMRC with VAT data on a voluntary basis
- receiving, via the API platform, information from HMRC to ascertain compliance.
A list of MTD compatible software is available from HMRC's website.
If you require further assistance with MTDfV, please contact us and we can help you prepare.
Under the regulations, businesses with taxable turnover above the VAT threshold must keep digital records for VAT purposes and provide their VAT return information to HM Revenue & Customs using 'functional compatible software'. These new regulations take effect for VAT return periods beginning on or after 1 April 2019.
HMRC has published VAT Notice 700/22: Making Tax Digital for VAT. This Notice defines 'functional compatible software' and the transaction-level data that needs to be recorded and retained within the software.
Under the new MTD regulations, businesses will have to use a software program or set of compatible software programs which can connect to HMRC systems via an Application Programming Interface (API). The software must be capable of:
- keeping records in digital form as specified by the new rules
- preserving digital records in digital form
- creating a VAT return from digital records held in compatible software and submitting this data to HMRC digitally
- providing HMRC with VAT data on a voluntary basis
- receiving, via the API platform, information from HMRC to ascertain compliance.
A list of MTD compatible software is available from HMRC's website.
If you require further assistance with MTDfV, please contact us and we can help you prepare.
