Making Tax Digital
HMRC delays rollout of digital VAT returns – for some businesses 29 October 2018
Filing VAT returns using the Making Tax Digital system has been delayed for some companies due to the complexity of the system, customer concerns and Brexit complications. HMRC recently invited over half a million businesses to join the a newly launched MTD pilot for the new online VAT service ahead of new rules coming into force in April 2019. HMRC believe that Making Tax Digital for VAT will make it easier for businesses to manage their tax and will save them, and their agents, time which can instead be devoted to maximising business opportunities, encouraging growth and fostering good financial planning. From 1 April 2019 approximately 1 million businesses registered for VAT with a taxable turnover above £85,000 will need to keep their VAT records digitally and file their returns using Making Tax Digital-compatible software. The recently launched pilot opened for businesses whose affairs are up to date and straightforward, and will extend to most other business types in the coming months. HMRC has delayed joining for a further 6 months for a small group of customers who have more complex requirements. The delay will allow more time for testing the service with them in the pilot before they are required to join.
Mel Stride MP, Financial Secretary to the Treasury, said:
“HMRC is transforming the tax administration so that it’s more effective, more efficient and easier for taxpayers. Today’s announcement means that around half a million businesses will be able to join Making Tax Digital and start filing their VAT returns online, making it easier to get their tax right first time. More and more businesses use digital tools every day to help them operate – tax shouldn’t be different. This is a major step towards bringing VAT into the 21st century.”
Theresa Middleton, Director for Making Tax Digital for Business, said:
“Millions of people are already banking, paying bills and interacting with their suppliers and customers online. Using digital tools to help businesses manage their business income and expenses and get their tax right builds on this momentum and will also help them get more control over their finances. Eligible businesses and agents shouldn’t leave preparations to the last minute and are encouraged to join the pilot as soon as they can. Read more information on Making Tax Digital .”
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MTD for VAT: Pilot now open to all affected businesses 15 January 2019
The Making Tax Digital for VAT pilot has been extended by HMRC, meaning that all customers mandated to use the service from April 2019 are now able to access the pilot.
The Association of Accounting Technicians (AAT) has reported that the pilot so far appears to be going successfully, (according to HMRC) with over 3,500 businesses having already joined it with the number of daily sign-ups now exceeding 100.
Other VAT businesses that are mandated to join from October 2019 are seeing the pilot scheme gradually open up to include those firms as well.
All VAT registered entities with an annual VAT-able turnover of £85,000 or more will now therefore have the chance to test their accounting systems, prior to them being required to keep a digital record of their VAT transactions from 1 April 2019 onwards.
HMRC is rightly urging “as many eligible businesses as possible” to take part in the pilot ahead of the April mandation.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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