VAT returns Businesses within the scope of MTD for VAT will be required to submit their VAT returns using their functional compatible software. Information will be pulled from the digital records to populate the VAT return. There will be a minimum of 9 boxes required to complete the return, although HMRC will permit businesses to include supplementary VAT information as part of a VAT return or voluntary update. The government has confirmed that the submission deadlines for income tax and VAT will not be aligned, meaning there will be no changes to the statutory VAT return or payment dates. Businesses submitting monthly or non- standard period returns will be able to continue to do so. The VAT annual accounting scheme will also be retained with the current conditions. Businesses making these types of returns will also be required to keep digital records and submit their VAT returns through functional compatible software. Some businesses may choose to submit VAT information more frequently than their VAT return obligations require on a voluntary basis. Some businesses may choose to voluntarily provide further information by way of periodic updates and supplementary data.
Periodic updates Businesses will be able to submit VAT information more frequently than their VAT return obligations require on a voluntary basis as a ‘voluntary update’. Supplementary data HMRC believes that businesses and HMRC could benefit from the submission of supplementary data detailing how the figures in the return are arrived at. HMRC believes this additional data will help them target non- compliance. The software will allow for the voluntary submission of supplementary VAT data as part of a VAT return or a voluntary update. HMRC believe this will allow them to test with businesses the extent to which they and HMRC can benefit from such supplementary data.
The VAT payable portion is: • total output tax due for the VAT return period • total output tax on acquisitions from other EU member states • total output tax on supplies received where the business is required to account for and pay on behalf of the supplier (reverse charge output tax). The VAT allowable portion is: • total input tax allowable for the VAT return period • total input tax allowable on acquisitions from other EU member states. The VAT account will also need to detail any adjustments made which will include correcting errors in calculating VAT payable in a previous period and other adjustments such as claiming bad debt relief and annual adjustments for partial exemption and retail schemes. Only the total for each type of adjustment will be required to be kept digitally and not details of the calculations underlying them. Businesses will need to preserve digital records in functional compatible software for up to six years.
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