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MTD Update

Making Tax Digital (MTD) for VAT came into effect on 1 April 2019 and is mandatory for all VAT registered businesses with taxable turnover that exceeds £85,000.

The exception to this is a small minority of VAT registered businesses with more complex requirements, such as VAT groups. HMRC has delayed mandation for these businesses by six months to 1 October 2019.

All businesses who fall into one of the small minority categories should have received a letter from HMRC confirming their MTD implementation date has been deferred to 1 October 2019.

HMRC have confirmed that all deferral letters have been sent out now and, importantly, businesses must have received a deferral letter otherwise HMRC will be expecting that business to begin MTD compatible filing from 1 April. 

If you fall into one of the deferred categories above and have not received a letter, we recommend you contact HMRC as soon as possible. All businesses who need to comply with MTD must ‘sign up’ before they can submit VAT returns via their compatible software. You can sign up for MTD via the gov.uk website. Please note that businesses need to ensure they have a solution for MTD in place before they sign up, as all submissions after they have signed up have to be submitted via their compatible software.

We have experienced a number of issues to date, mainly around signing up for MTD and obligations not pulling through to the MTD compatible software, but despite this we have been successful in submitting all of our clients VAT returns for those who are already signed up for MTD to date. If you have any queries or have been experiencing any issues with regard to MTD then please contact Toby Thorne on tthorne@jamescowper.co.uk or +44 (0)1635 35255. 

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