Making Tax Digital – draft VAT regulations published
Ahead of the first phase of MTD for VAT in April 2019, HMRC released draft MTD VAT regulations, a notice and an explanatory memorandum for consultation.
MTD for VAT comprises two main elements – the keeping of digital records and the digital submission of the VAT return via functional compatible software. The published documents confirm that:
- Only some records and certain information would have to be kept digitally.
- The complete set of required digital records do not all have to be in one piece of software – but there must be a digital link between the different pieces.
- Those using the Flat Rate Scheme are covered by additional requirements.
- Partial exemption adjustments can be carried out outside the digital records and transferred in manual.
HMRC began piloting MTD for Business for VAT in December 2017, starting with small-scale, private testing. A wider, live pilot is due to start in Spring 2018.
Chartered Accountants Ireland recommends that firms and business continue their preparations based on the current timetable. The Institute is also currently developing a MTD online hub which will be available in the coming months once final legislation is available.