From 1 April 2019 all VAT-registered businesses with a taxable turnover above the £85,000 VAT threshold are required to keep their VAT-business records digitally and send their VAT returns using MTD-compatible software.

MTD for business is a requirement to keep digital records and make regular quarterly reports of income and expenditure to HMRC, the intention being that transactions will be recorded, using accounting software, as near as possible to the time when those transactions occurred.

At the end of the accounting period taxpayers will need to send a final digital report to confirm their income and expenses for the year, and to claim allowances and reliefs.

The timetable for MTD currently remains as:
  • Consultation on MTD for corporation tax expected later in 2018;
  • Digital records required for VAT purposes from 1 April 2019;
  • Digital records and quarterly reporting required for other taxes, e.g. income tax and corporation tax, from April 2020 at the earliest.
Author: Technical Connections