Who is affected? The draft legislation confirms that from April 2019 all VAT registered businesses (incorporated and unincorporated) will be required to keep their VAT records digitally, using MTD compatible software.
What are the deadlines? HMRC has confirmed that the MTD quarterly submission dates may be linked to a business’s existing VAT return periods and the one month and seven day after the quarter end deadline will be retained under MTD, at least initially.
What information must be submitted? HMRC says that the MTD VAT submission will, as a minimum, require the same information as is needed to complete the current VAT return’s nine boxes. However, HMRC will encourage voluntary submission of other information contained in the digital accounting records to test the practicalities and potential benefits of doing so.
Will HMRC be providing free VAT software? This is the big change – there will be no free HMRC product. So businesses currently using HMRC’s VAT online service will need to use MTD compatible commercial software to file VAT returns from April 2019. If businesses currently use accounting software to keep their records, then the software provider should be updating their product to ensure the software includes a facility to make the MTD VAT submissions.