The introduction of Making Tax Digital (MTD) for VAT is fast approaching. From April 2019, some 1 million businesses with a turnover above the VAT threshold (currently £85,000) will have to keep their records digitally (for VAT purposes only) and provide their VAT return information to HMRC through MTD compatible software.
An initial private beta pilot of MTD for VAT was launched in April this year. HMRC has now confirmed in a press release that the pilot has been extended to businesses whose affairs are up to date and will extend to most other business types over the coming months.
HMRC has also listened to concerns and will give a small group of customers with more complex requirements a further 6 months to prepare. This will ensure there is sufficient time for testing the service in the pilot scheme before they are required to join.
Mel Stride MP, Financial Secretary to the Treasury, said:
'HMRC is transforming the tax administration so that it’s more effective, more efficient and easier for taxpayers. Today’s announcement means that around half a million businesses will be able to join Making Tax Digital and start filing their VAT returns online, making it easier to get their tax right first time.'
Currently, businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020.
Sign up to register for important news and information on accounting dates