Making Tax Digital for VAT: HMRC letters
HMRC are now writing to VAT registered businesses informing them of the changes the introduction of Making Tax Digital will make to the way they keep their VAT records and submit their VAT returns.
Any VAT registered business with annual taxable turnover above the VAT threshold (currently £85,000) will need to use the new service for periods starting on or after 1 April 2019.
Under the new service, VAT returns must be submitted using software that is compatible with MTD such as Sage, Xero or FreeAgent. There is also bridging software available which will enable a business using spreadsheets for their accounting records to continue to do so. The bridging software interacts with the spreadsheet to extract the necessary VAT information and submit it to HMRC in an MTD compliant format.
You can find out more about making tax digital at https://www.gov.uk/government/publications/making-tax-digital-how-vat-businesses-and-other-vat-entities-can-get-ready
If you need any assistance with MTD then please feel free to contact us.