Brexit delays MTD mandate and implementation
A deadline of 2020 is set for all tax returns to be digitised. However, the Brexit split will delay the MTD (making tax digital) mandate and its implementation which might extend the timeline for digitisation of the tax returns. An official of HMRC wrote an email illustrating that they had decided to delay plans as a way of introducing more extensive digital services for individuals to release the project capability to the EU Exit Work. This will however halt the progress on simple assessment and tax code changes.
MTD VAT timelines unchanged
Though Brexit will delay the mandate and implementation, the MTD VAT timelines will remain unchanged. The HMRC official claimed that MTD has had significant progress and that HMRC has laid foundations to ensure they return in the future. HMRC is still committed to its digital ambitions and continues encouraging more clients to use their Tax Accounts. HMRC is still on track to introduce the mandatory service for VAT.
MTD compliance begins in April of 2019 for VAT registered business (Turnover >85,000 pounds)
On 13 July 2017, the Financial Secretary to the Treasury and the Paymaster General announced that Making Tax Digital would be going into effect starting April 2019. From that point forward, businesses reporting a turnover of more than the VAT threshold (£85,000) will have to ensure their records are digital. Besides, they will be expected to provide VAT return information to the HMRC via MTD functional compatible software. However, the MTD will still be available on a voluntary basis to the other businesses for both VAT and the Income Tax.
Pilot phase timelines unchanged for VAT
The pilot phase time is still unchanged for VAT after commencing in May 2018, and HMRC is still on track to introduce the MTD service for VAT by April 2019. The live pilot for self-employed individuals has been underway since March and offers them the option of reporting their income digitally this year.
Despite the delay that Brexit will cause in the MTD mandate and implementation, the timeline for the VAT filing mandate remains unchanged, as mentioned above. Businesses should become capable of maintaining their records digitally for the purposes of VAT by April 2019, as well as providing their VAT information to HMRC via the MTD system.
DataTracks is the leading provider of regulatory compliance and reporting solutions, and they offer the tools to handle and submit the VAT returns under the MTD initiative of HMRC. If you have any questions, or want to know more about our solutions, visit our website, or reach out to us at firstname.lastname@example.org.