Making Tax Digital

Welcome to our Making Tax Digital page, where you’ll find the latest information, analysis and practical guidance on what Making Tax Digital will mean for you.

Making Tax Digital is the Government’s plan to modernise and digitalise the UK tax system. Ultimately, this will have significant implications for both businesses and individuals.

What is Making Tax Digital?

MTD for VAT will start in April 2019. It will require businesses to:

a) keep records in a digital format and

b) submit VAT returns using commercial software (not via the existing government gateway account as many returns are filed at present). The detailed requirements have been published by HMRC in VAT Notice 700/22:

Key Dates:-

 1 April 2019   MTD starts for non-complex businesses over the £85,000 VAT threshold for VAT periods beginning on or after 1 April 2019
 7 August 2019  First MTD VAT filing deadline for quarter-ends 30 June 2019 (electronic payment only otherwise 31 July 2019)
 1 October 2019      Complex businesses who deferred have to submit returns via MTD for VAT periods beginning on or after 1 October 2019.

Businesses that have voluntarily registered for VAT do not, at present, need to comply with MTD for VAT requirements.

MTD for individuals: the Personal Tax Account                                                                                   

Digital tax accounts for individuals – Personal Tax Accounts (PTAs) – have already been created by HMRC. The accounts are pre-populated with information already held by HMRC. PTAs are set to be developed further and taxpayers will be able to report any additional sources of income through their digital account.

Individuals may wish to register for a personal tax account by visiting www.gov.uk/personal-tax-account.

MTD for businesses: the revised timescales

The new MTD initiative was originally set to be implemented between 2018 and 2020. However, in response to concerns raised by business and industry experts regarding the pace and scale of the changes, the government put forward a revised timescale for the introduction of Making Tax Digital for Business (MTD).

Under the revised timetable, starting from 1 April 2019 those businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records for VAT purposes and provide their VAT return information to HMRC using MTD functional compatible software. The MTD requirement will remain even if turnover subsequently falls below the VAT threshold.

Complex Businesses

The start date for MTD for VAT is deferred until 1 October 2019 for complex businesses. Complex businesses that fall within this group are: trusts, not-for-profit organisations that are not companies (including some charities), VAT divisions, VAT groups, those public sector entities required to provide additional information alongside their VAT return (such as government departments and NHS Trusts), local authorities, public corporations, traders based overseas, those required to make payments on account and annual accounting scheme users.

Exemptions from MTD

Some business may be able to claim exemption from MTD if any of the following apply:

•   On religious grounds, if the business is run entirely by practising members of a religious society for whom compliance with MTD is incompatible with their beliefs.
•   If it is not reasonably practicable for the business to use digital tools to keep records for reasons of age, disability, remoteness of location or for any other reason.
•   The business is subject to an insolvency procedure.

If businesses believe that they fall into one of these categories they will need to contact the HMRC VAT Helpline to discuss alternative processes for submitting VAT information. Exemption applications are now open at HMRC.

› Download our free guide on all you need to know about Making Tax Digital 2018-19

How can Ward Williams help you?

We have become increasingly aware that some software providers are charging significant additional fees for the provision of API enabled software.

There is no need for you to worry about upgrading/changing your existing software to API enabled software.  Whatever format your VAT records are maintained in, Ward Williams will be able to prepare/submit your VAT returns on your behalf.

Ward Williams works with the below HMRC approved software providers for MTD for VAT.

Xero           

Please contact us to discuss your individual needs and specific advice on how we will be able to help you on enquiries@wardwilliams.co.uk or call 01932 830664.

Specialists

Andrew Webb
Business Services Director
andrew.webb@wardwilliams.co.uk