HM Revenue & Customs (HMRC) has published three important new documents regarding its flagship Making Tax Digital (MTD) project to help clear up confusion among businesses.
On Friday 13 July 2018, the tax authority unveiled its new HMRC VAT Notice, which outlines important information regarding exactly what digital records VAT-registered businesses must keep once MTD for VAT is introduced as mandatory next spring.
From 1 April 2019, VAT-registered firms earning £85,000 or more will need to be fully compliant with MTD – which will involve storing appropriate digital records and submitting VAT reports to HMRC via MTD-friendly software. The new VAT Notice document confirms what will count as ‘functional compatible software’ in the eyes of HMRC.
As part of Friday’s update, HMRC has also published a list of software suppliers that the Revenue is currently working with as part of its MTD for VAT pilot scheme. These companies, which include the likes of Xero, Intuit and Sage UK Limited, will all be offering MTD-friendly software to businesses, it has been confirmed.
Finally, HMRC has also unveiled a communications pack aimed at stakeholders and agents, which contains detailed information about the MTD project and all that it involves. It is hoped that this pack will help to raise greater awareness of MTD across the wider business community.
MTD for VAT is now less than a year away, meaning that any VAT-registered businesses that stand to be affected should seek specialist advice ASAP in order to ensure they are fully prepared.
Meanwhile, HMRC estimates that MTD for other taxes will be rolled out from April 2020 onwards.