The deadline for businesses with a turnover above the VAT threshold to keep digital records for VAT purposes when Making Tax Digital (MTD) returns, is fast approaching.
From April 2019, 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 functional compatible software
HMRC has published an updated list of software suppliers that are working to support MTD for VAT. More than 130 software suppliers have been working with HMRC to prepare for the introduction of Making Tax Digital for VAT. Over 35 of these suppliers have said they will have software ready during the first phase of the pilot, in which HMRC is testing the service with small numbers of invited businesses and agents.
HMRC launched this initial private beta pilot of Making Tax Digital for VAT in April 2018, and the pilot is expected to be widened later this year. As things stand, businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until ‘at least’ 2020.