HMRC wants to transform the UK tax system to make it more effective, efficient and easier for taxpayers to get their tax right. Making Tax Digital (MTD) is a key part of achieving that objective requiring taxpayers to make greater use of current digital technology.
From 1 April 2019, many businesses will be required to keep their VAT records digitally, and transmit their VAT return information to HMRC using MTD compatible software. This will enable taxpayers to send their tax information to HMRC direct from those records quarterly, thus having a ‘real-time’ idea of their tax liabilities presented to them in their digital tax account.
But will your business need to comply with MTD for VAT? And if it does, what do you need to do to prepare for it?