Making Tax Digital In The UK
From 1 April 2019, businesses that are registered for VAT and with turnover over £85,000 will have to comply with the new Making Tax Digital (MTD) requirements in relation to their VAT compliance function.
MTD has three primary requirements:
– Digital record keeping and storage
– Digital links between records
– Digital submission of returns to HMRC using approved software
The MTD requirements mean that businesses will need to make sure that they store VAT records digitally, are able to submit VAT returns electronically via an interface (API) with HMRC software and that they can demonstrate a clear electronic audit trail and digital link from source systems to VAT return submission.
There remains some uncertainty in terms of how to make MTD work in practice – particularly where adjustments are needed to VAT return figures prior to submission, meaning data quality and normal month end adjustments need to treated carefully
The Notice provides some clarity around issues which many businesses face including the MTD requirements, exemptions, records, functional compatible software, digital links, VAT calculations outside of software, adjustments, correcting errors and application of special VAT accounting schemes.