Making Tax Digital: What You Need To Know

What changes are being made?

The current process of submitting VAT returns using HMRC’s own VAT online services (currently accessed by logging on to HMRC’s site) will no longer be possible after April 2019.

What does this mean for your business?

This change means that businesses will not communicate with HMRC in the same way and will need to ensure they have the necessary software in order to remain compliant.

The MTD requirements for your business are:

  • Maintain digital accounting records. Paper records will no longer meet the new tax legal requirements.
  • To use a compatible software product that uses HMRC’s Application Program Interfaces (API) to submit their returns to HMRC.

Businesses who fall within the scope of the MTD rules will be withdrawn from the current HMRC online tax return service.

How do you know if you fall within the scope?

If you are VAT registered business with a taxable turnover over the VAT threshold of £85,000, you will be required to file your VAT returns using MTD compliant software, starting on or after 1 April 2019. The pilot started in April 2018.

If you have a more complex business, HMRC may allow a 6 month referral.

If you are a VAT registered business with a taxable turnover under the VAT threshold, you can continue to file VAT returns as normal until 2020.

Please note that no changes are being made to the tax deadlines, VAT rules or the information that is to be submitted.

How can EasyBuild help?

To support this key legislative change, EasyBuild has built a solution to take the VAT data recorded securely and electronically in EasyBuild-Oracle database, to allow you to submit it to HMRC. This will ensure your business is MTD compliant from April 2019 onwards.

EasyBuild have successfully demonstrated a prototype to HMRC’s Digital Relationship Management team and is now listed on the “In Development” section of the web page for software vendors recognised for MTD VAT.

EasyBuild contractor software compatible for making tax digital transition

Where can I find more information?

For further information on MTD for VAT please see the following resources:

VAT Notice 700/22: Making Tax Digital for VAT
HMRC publishes more information on Making Tax Digital

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