Making Tax Digital Update – Implementation date put back to April 2019

28th February 2018

Making Tax Digital (MTD) was first announced by the government in 2015 as an initiative to improve the effectiveness and efficiency of the UK tax system, and reduce its complexity. The proposed deadlines for implementation have been subject to re-evaluation on a number of occasions but the latest government announcement in July 2017 confirmed that it would delay the introduction of MTD to April 2019 at which date the scheme would only apply to VAT.

To clarify this position for our clients and contacts:
From April 2019, Making Tax Digital will require businesses (who are VAT registered and above the VAT registration threshold of £85,000) to provide their VAT return information to HMRC through compatible software.

Pivotal to the move to MTD is the need for businesses to use software that can connect to HMRC systems via an Application Programming Interface (API) in order to comply fully with MTD. As such, the software must be able to:

  • Keep digital records in accordance to MTD regulations
  • Preserve digital records in line with MTD regulations
  • Create a VAT return with digital information held by the software and digitally send this information to HMRC
  • Provide VAT data on a voluntary basis to HMRC
  • Receive information from HMRC via the API platform with regard to an entity’s compliance with obligations under MTD regulations.

The team at Whittles is currently reviewing software options currently available which meets the MTD criteria and will be sharing our conclusions and recommendations with our clients over the next six months in order for them to prepare to meet the April 2019 deadline.

In the meantime if you have concerns about what MTD means for you, please do not hesitate to contact Rachel Skells, Tim Moriarty or Michael Greene.