Digital tax account documents ‘provide clarity’
Concern that too many traders are still in the dark about digital tax accounts appears to have reached officials, who have published a set of materials which they claim provides clarity.
Although the materials are also aimed at accountants, much of the practical guidance is aimed at businesses facing the mandatory Making Tax Digital VAT service from April 2019.
So a new online notice, a new .gov page and a new communications pack are aimed at traders registered for VAT with a taxable turnover above the VAT registration threshold of £85,000.
It is these businesses that will need to keep VAT records digitally and file their VAT returns using MTD-compatible software, from their first VAT period starting on/after April 1st 2019.
Beyond the ‘who’ and ‘when’ of MTD, the notice looks the most helpful in stipulating what digital records traders must keep, and if a series of HMRC relaxations can apply to them.
How businesses must use software to keep digital records and file their returns from those digital records is also covered, alongside illustrations to ensure compliance from April 2019.
“Businesses above the VAT threshold are not required to use MTD for their VAT returns until April 2019 but HMRC has already started piloting the changes”, said HMRC, which believes that the trio of materials “provide additional clarity that businesses and their representatives have been asking for.”
The department added: “This [pilot] will be widened out to allow more to join later this year. In the meantime, businesses can start to prepare now by ensuring they are keeping their records digitally and in accordance with the rules set out in the notice.”
24th August 2018