Making Tax Digital for VAT

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VAT Posted on August 03, 2018

HMRC has published further information on Making Tax Digital for VAT (MTDfV). The Making Tax Digital for VAT notice sets out some further details of the MTDfV regime, which will ultimately require taxpayers to move to a fully digital tax system.

VAT Records Must be kept digitally under Making Tax Digital

Under the rules, businesses with a taxable turnover above the VAT threshold (currently £85,000) will be required to keep digital records for VAT purposes using ‘functional compatible software’ and provide their VAT return information to HMRC via an application programming interface.

This notice explains:

  • The digital records must keep and the ways to record transactions digitally in certain special circumstances
  • What counts as 'functional compatible software,' and when software programs do and do not need to be digitally linked where a combination of programs is used

The new rules have effect from 1 April 2019, where a taxpayer has a ‘prescribed accounting period’ which begins on that date, and otherwise from the first day of a taxpayer’s first prescribed accounting period beginning after 1 April 2019.

If you have any queries on Making Tax Digital matters please contact us.

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