Making Tax Digital for VAT – are you ready?
Caroline Miskin provides an update on the practical aspects of Making Tax Digital for VAT: the pilot, communications, software, the sign-up process, penalties, exemptions and the MTD for VAT notice.
On 10 January 2019, the Making Tax Digital (MTD) for VAT pilot was extended to all businesses that are required to comply from their first VAT accounting period starting on or after 1 April 2019. That start date is almost upon us, but do we have the necessary clarity on the requirements and software? Will everything be ready?
Some are still questioning whether there will be a last minute change of policy, perhaps in response to the very critical House of Lords Economic Affairs Committee report, Making Tax Digital for VAT: Treating Small Businesses Fairly, published on 22 November 2018. The government has announced a six-month delay for about 40,000 businesses that cannot yet join the pilot or have been able to do so only very recently. The government responded to the House of Lords committee in January 2019; the clear message from both the government and HMRC is that there will be no further delay.