Making Tax Digital (MTD)
Under Making Tax Digital (MTD) for VAT, most VAT registered businesses are required to use 'functional compatible' software in order to record their transactions and report their VAT.
MTD means that qualifying VAT registered businesses:
Requirements for MTD
VAT registered businesses whose taxable supplies exceed the VAT registration threshold in any 12 month period ending or after 31 March 2019 are mandated into MTD unless they are exempted, excluded or their start is deferred (see above).
A VAT registered business whose taxable supplies do not exceed the VAT registration threshold may elect to ignore this exemption and opt in to MTD.
A business who is mandated into, or voluntary joins MTD, remains in MTD until they Deregister for VAT, or meet one of the exemptions below. They cannot leave MTD merely because the taxable supplies drop below the VAT registration threshold later on.
All businesses have to elect in to join to MTD, unless they are exempt.
o Business name
o Principal place of business
o VAT registration number
o Details of any VAT scheme used, such as Cash Accounting, Flat Rate Scheme, Annual Accounting etc.
o A VAT account
o Information about the amount of supplies, including time of supply and VAT rate used
Exemptions from MTD
MTD only applies to VAT registered business, the following are exempt from MTD
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