Making Tax Digital

Opportunity to trial Making Tax Digital for VAT

HMRC are looking to enrol businesses into a VAT pilot commencing in April 2018. 

Making Tax Digital: ATT and ICAS roadshow

In 2017 the ATT took part in a successful MTD roadshow with ICAS (Institute of Chartered Accountants of Scotland) and Intuit QuickBooks. The session on MTD for Business presented by ATT Technical Officer, Helen Thornley can be viewed below. 

Making Tax Digital for VAT

Main issues for consideration

Announcements in July 2017 around Making Tax Digital now place VAT firmly at the vanguard of these proposals. The ATT takes a look at the challenges faced by usinesses, advisers (and HMRC) by this revised timetable.

Making Tax Digital: New Timetable

On 13 July 2017 the Government announced that it would be delaying the introduction of Making Tax Digital (MTD).

In response to concerns raised by MPs, businesses and professional bodies such as the ATT, MTD will now not be mandatory until April 2019, and then only for VAT purposes.

Under the new timetable:

  • Only businesses over the VAT threshold (currently £85,000) will have to keep digital records.
  • Digital records will only be required initially for VAT purposes, and only from April 2019.
  • Business will not have to keep digital records or report quarterly for other taxes (e.g. income tax and corporation tax) until April 2020 at the earliest.
  • MTD will be available on a voluntary basis for businesses below the VAT threshold, and for other taxes.

HMRC will begin to pilot MTD for VAT by the end of 2017, starting with small-scale, private testing, followed by a wider, live pilot in Spring 2018.  The Government have stated that they will not widen the scope of MTD beyond VAT before the system has been shown to work. 

Enabling primary legislation for MTD for businesses for both Income Tax and VAT is included in Sections 60 to 62 and Schedule 14 of Finance (No.2) Act 2017 which received Royal Assent on 16 November 2017.  The explanatory notes to the original Bill can be found here.

On 13 September the Government launched a consultation on the proposed secondary and tertiary legislation. They also published “Making Tax Digital for VAT: legislation overview”.  The responses submitted by the ATT in respect of these can be found here.

Draft legislation: The Value Added Tax (Amendment) Regulations 2018

On 18 December 2017 HMRC published draft regulations on MTD for VAT, together with a draft explanatory memorandum and draft VAT Notice for consultation.  These documents can be found here.  The consultation closes on 9 February 2018.  If you have any comments which you would like to feed into the ATT’s response please email them to atttechnical [at] att.org.uk with the subject heading MTD for VAT.