Today (1 April) has been a date marked on many accountants’ calendars for well over a year. Whilst some believed (or some may say hoped) this day would never arrive, it is the start date for the first phase of HMRC’s ambitious MTD regime – Making Tax Digital for VAT.
Digital record-keeping for VAT is now mandatory for certain businesses. Around one million businesses registered for VAT with a taxable turnover above £85,000 will now need to keep their VAT records digitally for their next VAT period starting on or after today and file their returns using Making Tax Digital-compatible software. The most complex 3-4% of businesses will be deferred until October 2019. See the UK government website for further details.
Although the record-keeping requirement starts from today, the reality is that the first MTD submissions will not be due until June (for monthly filers), and August for the first tranche of quarterly filers.
Over the last year, we have been working closely with HMRC to test their systems, and make submissions under the pilot. Over 70,000 businesses and nearly 1,700 accountants have taken part in the VAT pilot. The number of sign-ups (as a percentage of total mandated businesses) remains low, but as referred to above, the first quarterly submission is not due until August, and so there is still time for engagement and sign-up.
In 2018, Thomson Reuters launched Onvio VAT, a cloud based bridging solution, allowing import from Excel of the necessary data to submit to HMRC. Onvio is integrated with our desktop suite, allowing easy sharing of key client and contact data. Thomson Reuters has been working with accountants for many years to manage their tax compliance process. Our solution will help you manage the new regulations and automate your VAT submission process. To find out more about our MTD for VAT solution, talk to one of our account managers about Onvio VAT.
The future of Making Tax Digital
In my recent blog I suggest that other taxes are still likely to be delivered, but the next tax to be mandated is not going to be before 2021.