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How will MTD affect VAT returns?

Home / Blog Entry / How will MTD affect VAT returns?

Making Tax Digital for Business (MTDfB) rules come into force in April 2019 and will have a big impact on businesses across the UK. The Government is releasing more and more information about the change to help everybody to prepare. Most recently they clarified how the rules will work for VAT. At Brian G Lonis, one of the most up to date accountants London has, we thought it prudent to provide some of this information.
The digital requirements for businesses in regards to VAT will depend on their turnover if the proposed rules are accepted. According to them, every business with a turnover above the VAT registration threshold (currently standing at £85,000) would have to submit returns digitally using relevant MTD compatible software.

In addition to the returns themselves, businesses will also need to keep digital copies of their records so that information can be found when needed. The data will need to be saved for up to six years, facilitating investigations if they ever become necessary.

VAT will become the first tax that becomes reportable under the new rules in 2019. That means that records will need to be digital from April 1st of that year. The return and subsequent ones will also have to be digital after this point unless the business does not exceed the VAT threshold.

The Government is currently in the process of finalising the software requirements for MTD. They plan to release the final specifications by April 2018 so there is time for developers to create software and businesses to familiarise themselves with it.

At Brian G Lonis we work hard to provide the best services we can for businesses of various shapes and sizes, ensuring we offer clear advice. This approach has helped to make us one of the best accountants London has to offer. If you would like to discuss the above with us, please get in touch.