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
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