HMRC writing to businesses about MTD for VAT
HMRC has begun a letter writing campaign to remind businesses that the way they keep VAT records and submit their VAT returns is changing. The letters are being sent to businesses who will be within the scope of the new Making Tax Digital (MTD) for VAT, which comes into effect from 1 April 2019.
A first wave of 20,000 letters was sent earlier this month with a further 180,000 letters sent last week. HMRC is planning to send letters to all affected businesses by the end of November, although this date may change. We are told that there are two versions being used to enable HMRC to monitor their impact. Both have the same core message including advice on how to prepare your business for the change but are written in slightly different styles.
The introduction of MTD for VAT will impact businesses with a turnover above the current VAT threshold of £85,000. These businesses will be required to keep digital records and provide regular digital updates to HMRC for VAT purposes using MTD for VAT. There will be some additional preparation time for a small number of businesses with complex requirements.
MTD will initially be for VAT purposes only. Businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until ‘at least’ 2020. A private beta pilot of MTD for VAT was launched in April this year, and last month this pilot extended to businesses whose affairs are up to date and straightforward. The letters from HMRC are being sent to businesses who are currently eligible to join the pilot. The pilot will extend to most other business types over the coming months.
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