Making Tax Digital for VAT

Who is affected by Making Tax Digital for VAT and when will it apply?

1st October 2018

From 1st April 2019, VAT-registered businesses with a ‘taxable turnover’ above the VAT threshold (£85,000) are required to keep digital records for VAT and send HMRC their VAT returns using Making Tax Digital-compatible software.

‘Taxable turnover’ includes standard, reduced and zero rated, but does not include exempt supplies or income outside the scope of VAT.

Once within the scope of Making Tax Digital for VAT a business will remain subject to the rules, even if VAT taxable turnover subsequently fall below the VAT registration threshold.  However, the rules will no longer apply if the business deregisters from VAT or meets one of the exemptions.

The new rules will apply to VAT accounting periods that start on or after 1st April 2019.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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