Digital VAT records may become mandatory for merchants

Published:  15 May, 2018

Her Majesty’s Revenue and Customs has clarified that businesses with a turnover exceeding the VAT threshold of £85,000 will need to make their VAT records digital from April 2019.

There was some confusion as to whether the Making Tax Digital scheme would be postponed due to limited resources being available at HMRC as they prepare for Brexit. An email from HMRC at the end of last month had stated that MTD was being de-prioritised in order to "release project capability to EU exit work". However, David Redfern, Tax Preparation Specialist and founder of DSR Tax Claims, has clarified that the scheme is continuing as planned. Those who move to digitised VAT records will also have to provide quarterly updates to HMRC. Smaller businesses who do not meet the threshold are still able to use the system voluntarily.

Redfern said: “Due to the ambitious nature of this project, businesses need to know where they stand so that they can be ready for the changes without risking penalties. Many businesses have put their own resources into ensuring they are ready for these changes and such uncertainty would cause considerable concern for those businesses, especially those whose turnover exceeds the VAT threshold.”

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