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Preparing for Making Tax Digital (MTD) – The MTD VAT Pilot - Tax agents blog

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It is now less than a year until April 2019 when it becomes mandatory for all businesses above the VAT threshold to start keeping their business records digitally and submitting their VAT returns using MTD compatible software.

We are currently piloting the service, starting with an initial ‘private beta’ period (so called because it includes invitation-only volunteers) to test all the key elements on a small scale before opening the pilot up more widely.  This is going well so far - we have already tested the sign-up process and we are now starting to arrange the first submissions with a small number of volunteers.

Early joiners are, as planned, from the most straightforward VAT businesses and their representatives. We will gradually start increasing the numbers of businesses, of increasing complexity, that can take part.

Once we are satisfied things are working as we expect then we will open up the pilot to allow businesses to join without an invite. It will still be a pilot, and we will still be adding features that will allow more complex businesses to join, so we will publish guidance to help businesses (and their agents) determine when they can sign up.  Our aim is to give all business types the opportunity to participate before they are mandated to.

As a reminder:

  • businesses that join the MTD VAT pilot will need to keep their VAT records digitally from the first day of the period covered by their next VAT Return
  • agents will need to create their Agent Services account, if they haven’t done so already, and link any existing agent-client relationship to it, before attempting to sign-up clients to the MTD pilots.

Don’t forget - if your clients have Income Tax obligations they can join the MTD pilot for Income Tax.

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  1. Comment by SANDRA BENTLEY posted on

    If HMRC are wanting small businesses to submit their VAT return in this new way then you should provide the software to do it and not expect us as unpaid tax collectors to pay around £20 per month subscription to a private software company. There was nothing wrong with the on-line system you have run for several years so why change it. I do have a link within my Sage software that sends my VAT return digitally, but apparently they will be switching off this link according to your instructions and forcing us to subscribe to more software - what a con. Have Sage pulled your strings!!!!!

    • Replies to SANDRA BENTLEY>

      Comment by Alison Walsh posted on

      Hi Sandra
      Thank you for your comment.
      Under Making Tax Digital (MTD) businesses will keep their VAT records digitally and file their returns using MTD-compatible software. This will help to reduce arithmetical errors, for example when data is taken out of one system and entered into another.
      MTD will make it easier for businesses to manage their tax and will save time which can instead be devoted to maximising business opportunities, encouraging growth and fostering good financial planning.
      HMRC will not be offering its own software products, we believe the software industry can use their experience and expertise to provide a richer, more tailored and personalised suite of software products. We are working closely with developers to ensure that a wide range of products will be available at a variety of different price points.
      Customers will get the best MTD experience by using software to keep their records. For those looking to meet their MTD obligations as simply as possible there will be a choice of ‘bridging software’ products available, which can extract the required data from records kept in spreadsheets and submit it to HMRC.
      There is further information on the MTD software currently available, and in development, published on GOV.UK.