From April 2019 VAT registered businesses and organisations with taxable turnover above the VAT threshold of £85,000 are required to:
Maintain their accounting records digitally in a software product or spreadsheet. Maintaining paper records has ceased to meet the legal requirements in tax legislation.
Submit their VAT returns to HMRC using a functional compatible software product that can access HMRC’s API (Application Program Interfaces) platform.
The requirements do not apply to VAT registered businesses with taxable turnover below the VAT threshold (eg, those that have registered voluntarily).
HMRC has announced a deferral to the start date of 6 months for some more complex businesses – details below.
Businesses within scope need to acquire a suitable commercial software product or appoint an agent to submit returns to HMRC on their behalf.
HMRC’s online VAT return remains available only to businesses that are not within the scope of MTD for VAT (eg, businesses that complete a VAT return but have taxable turnover below the VAT threshold).
Some businesses with the necessary skills may register with HMRC as software developers and develop their own bespoke software solutions, but these will be the exception.
No changes have been made to:
VAT rules other than those that relate to record keeping and filing.
The amount of information submitted to HMRC; the VAT return contains the same nine boxes as before though the regulations do allow for additional information to be submitted on a voluntary basis.
The current filing and payment deadlines for VAT.