From April 2019 businesses with a vat turnover in excess of £85,000 pa will have to file their VAT information to HMRC via MTD software. There will be no free software from HMRC, but it is hoped this will be provided, for simple cases, by third party software providers. Spreadsheets will be permissible, but bridging software will be required to file information to HMRC.
HMRC are currently running a pilot for VAT businesses on an invitation only basis. It is planned that the pilot will be rolled out later this year to other volunteers.
On 13 July HMRC published VAT notice 700/22 which states out the rules of MTD for VAT.
HMRC are working with more than 150 software suppliers for compliant software for VAT by April 2019, of which 40 providers are able to support the pilot.
At the beginning of this year HMRC invited self-employed individuals to join an MTD pilot for income tax.
The intention is that MTD will be rolled out to other taxes in April 2020, at the earliest.
HMRC are waiting to see the outcome of the pilots and MTD for VAT, before deciding on this.
Friston Wicks; Chartered Accountant and Chartered Tax Adviser