MTD for VAT is coming. Help your clients prepare now.
Since mainstream Making Tax Digital (MTD) was delayed, time has passed quickly and many accountants’ thoughts have passed to more pleasant things like tax returns and GDPR!
But MTD is back on the horizon and it will impact on VAT shortly.
What changes does MTD for VAT bring in?
VAT returns will be compiled by pulling data from digital records
VAT returns will be sent to HMRC via API-enabled products and not through VAT portal.
What won’t change?
The VAT return will still be a nine box form
The VAT return frequency and payment deadlines
The eligibility for VAT Special Schemes.
What is the timetable?
Technical consultation on the regulations closed
VAT pilot –Live testing of MTD begins
Businesses trading above the VAT threshold are mandated to use MTD
So what does this mean to accountants and your clients?
MTD for VAT is literally less than one year away – you should be talking to clients about it now and planning ahead by considering:
what software will be used?
does this require a change from the current software?
who will prepare/submit the VAT returns?
does this require further software training?
The scope for disruption caused by the shift to fully digital record keeping should not be underestimated. By addressing these issues now you will be better prepared when other parts of MTD are implemented. With less than a year to go, we will watch the outcome of the pilot scheme very carefully and share regular updates with our practitioners.