Preparations for the introduction of Making Tax Digital (MTD) for VAT in April 2019 are progressing well. MTD will make it easier for businesses to get their tax right, reducing the tax gap caused by avoidable errors and saving businesses time which can be devoted to maximising business opportunities, and helping foster good financial planning.
In October, HMRC opened the pilot to over 500,000 customers who will be required to join the service from April, and they are on track to open up the service to the remainder of mandated customers early in the New Year.
There has also been excellent progress with the software that businesses will use to keep their records and send HMRC their VAT information. A variety of products at different price points are available (including some that are free), and some can be used with a spreadsheet for those who prefer not to make the move to a fuller software product.
Businesses will need to join the new service in time to send HMRC their VAT return information before their first deadline for a return period which starts after 1 April. For the majority who file quarterly that will be by 7 August 2019 at the earliest. HMRC is continuing to send letters to all businesses in scope, raising their awareness and inviting them to join early so that they can test the service before mandation.