MacDougall & Co
Chartered Tax Advisers


Making Tax Digital (or MTD)

Making Tax Digital is coming

Some Bare Bones About MTD

From April 2019

MTD commences for you from the first day of your first VAT quarter starting on (or after) 1 April 2019

MTD applies to you if your turnover is over 85,000 and you are registered for VAT

The date on which you ask yourself these questions is the first day of your first VAT quarter starting on (or after) 1 April 2019

MTD applies to all VAT registered businesses and organisations. It applies to sole traders, partnerships, LLPs, limited companies, non UK businesses registered for VAT, trusts and charities

MTD requires a business to maintain digital records. Paper records are not acceptable. Quarterly returns for VAT (only) are required. Previously, quarterly returns were required for the whole business activity, but this (since an announcement in July 2017) is no longer the case. VAT returns will need to be submitted by using a functional compatible software product that can access HMRC's API platform

Excel spreadsheets on their own will not be adequate unless they are API enabled, (which is likely to have an associated cost)

It is now considered unlikely that there will be any free adequate software

MTD will be given a 'soft landing' which means that HMRC will be generous about how they apply penalties if you get things wrong

There is no change to: the underlying VAT rules; the current filing and payment deadlines, and; the amount of info required to be submitted

You can escape MTD in some circumstances. For example, if you are unable to use a computer on religious grounds, if there is no internet where you are, or if you are not computer literate, etc

From April 2020 From April 2020 at the earliest (this date may move)

MTD impacts income tax and corporation tax

MTD for VAT may also be extended to all VAT registered businesses

For more detail, please contact us or your own accountant / tax adviser

The source of most of this information is the Tax Faculty of the Institute of Chartered Accountants in England and Wales (search for "ICAEW" or click the red icon, below)

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