Making Tax Digital update

Published on 1st November 2019

Making Tax Digital (MTD) for VAT is now in full swing for VAT registered businesses with Vatable turnover above the VAT threshold (currently £85,000). HMRC are more than satisfied with the MTD roll out so far, with 94% businesses who have signed up to MTD filing their VAT returns by the due dates.

It had been thought that had the MTD system been shown to be working well, VAT registered businesses with Vatable turnover below the VAT threshold would be required to comply by 1 April 2020. This could have impacted many small businesses in the Food and Drink industry who are registered for VAT to benefit from VAT refunds due to their sales being zero rated (no VAT).

It has now been confirmed by HMRC that MTD will not be mandated for any other taxes or businesses in 2020. Therefore, VAT registered businesses below the VAT threshold do not need to be compliant from 1 April 2020 as originally expected.

Many businesses have moved to digital record keeping and have benefitted from the additional features, and timesaving, offered by bookkeeping software.

Please do not hesitate to contact us if you would like to discuss your options.