From April 2019 all VAT registered businesses with a taxable turnover above the VAT threshold of £85,000 will be required to:
- Maintain their accounting records digitally in a software package or on a spreadsheet. Paper records will no longer meet the legal requirements in tax legislation.
- Submit their VAT returns to HMRC using MTD compatible software that can interact with HMRC’s API platform.
The API (Application Program Interface) is a way of digitally communicating your VAT information with the Revenue. You will need this to submit your VAT returns to them and they will also need to be able to send information back to you.
If you are a VAT registered business with a turnover above £85,000 then you must comply with the new MTD for VAT rules from the first complete VAT quarter after 1st April 2019. This means that your accounting and VAT records must be kept digitally.
HMRC is compiling a list of compatible software that is continuing to grow. If you would like advice on suitable software for your business then please contact us without delay so you can prepare in plenty of time.
The new requirement is that you record all of your VAT records digitally. There is no requirement to record extra information or to save digital copies of your receipts or invoices at this time but will most likely become a requirement in the near future.
There will be no changes to the underlying VAT rules or the current filing and payment deadlines for VAT. They won’t be changing the amount of information required to be submitted either, the VAT return will remain the same 9 boxes that you already submit.
If you would like to talk to us about your MTD for VAT requirements please get in touch.