VAT registration is compulsory for those businesses with taxable (‘VATable’) income (also referred to as turnover or sales) in excess of the VAT threshold, currently £85,000.
With the exception of organisations listed in HMRC’s ‘deferral group’, from 1 April 2019 VAT registered businesses with VATable income above the current VAT threshold of £85,000 are required to:
Once signed up to MTD, VAT returns should be submitted to HMRC via the MTD portal using a ‘functional compatible software product’, for example Xero, that can access HMRC’s new API (Application Program Interfaces) platform.
MTD requirements are not yet mandated for organisations who have registered for VAT voluntarily and whose VATable income remains below the VAT registration threshold of £85,000, however, you can elect to comply with the requirements should you wish.
HMRC’s historical online VAT return portal will remain available to businesses that are not within the scope of MTD for VAT.
If an organisation not registered for VAT exceeds the VAT registration threshold after 1 April 2019, they will need to register for VAT and sign up to MTD – HMRC has set a 30 day window to complete this process!
If not done so already, businesses within the MTD scope will need to acquire suitable software and/or appoint an agent to submit returns to HMRC on their behalf.
At Armstrong Watson, we pride ourselves on the relationships we develop with our clients and can offer a bespoke VAT service to meet your business needs. Outlined below are examples of the service levels we can provide to support you:
Deferral Group – who must follow the rules for MTD from 1 October 2019?
You might be in the ‘deferral group’ and must use software to keep digital VAT records from your first VAT Return period starting on or after 1 October 2019 if your business:
HMRC will send you a letter to tell you that you’re in the deferral group.