HM Revenue & Customs (HMRC) has announced its pilot programme for Making Tax Digital (MTD) for VAT is now available to all UK businesses that meet the eligibility requirements, less than three months before the 1st April deadline.
All VAT-registered businesses with annual turnovers of £85,000 or greater can now test their accounting systems before having to maintain digital records of all VAT transactions from 1st April 2019 and beyond.
Since last April, HMRC has been running its MTD for VAT pilot scheme, with an additional 500,000 firms allowed to enter in October.
However, businesses within VAT groups or divisions and those who trade with the European Union (EU) or operate as partnerships have not been permitted to enter the pilot until now.
Clare Sheehan, head of customer readiness for MTD, said: “The MTD pilot is now available to all businesses who will need to use the service from April.
“This marks a significant milestone towards our delivery of a modern tax administration.”
More than 100 businesses per day are signing up to the MTD for VAT pilot, which is in line with HMRC’s initial expectations and has been welcomed by Brian Palmer, Tax Policy Expert at the Association of Accounting Technicians (AAT).
“HMRC is rightly urging “as many eligible businesses as possible” to take part in the pilot ahead of the April deadline,” said Palmer.
“It makes perfect sense to do so.
“Failing to engage with the pilot puts your or your client’s firm at risk of making mistakes or finding you need to change the way you report figures after the deadline, potentially meaning you will be non-compliant.”
Although many firms are now starting to sign up to the MTD for VAT pilot, there is a general consensus that many businesses remain ill-prepared for the new VAT reporting system.
Paul Aplin, president of the Institute of Chartered Accountants for England and Wales (ICAEW), indicated that the pilot has been opened up to all eligible businesses due to the worryingly low take-up of the pilot thus far.
“We are concerned that many businesses are still unaware of what they will be required to do,” said Aplin.
“There are currently only 3,500 participants in the pilot and that will need to increase substantially over the next few weeks to ensure that the system is fully tested and that businesses become familiar with the new process.”
Following our recent Freedom of Information request, HMRC confirmed there are now more than 4,000 businesses signed up to the pilot, consisting of a mix of businesses and agents from both the private and public periods of the pilot.
Your local TaxAssist Accountant can help with MTD for VAT
At TaxAssist Accountants, we've spent a great deal of time training and developing the right support services to help small businesses through this period of change.
HMRC will not be offering software to help you report VAT transactions quarterly, so we have already partnered with Intuit QuickBooks to help make managing your accounting records easy, wherever you are.