Tax

Brass tax - August 2019

Aug 01, 2019
The digital VAT quarterly deadline bites for the first time.

On 7 August, the first quarterly return deadline for businesses mandated to meet the requirements of Making Tax Digital (MTD) for VAT will arrive for those businesses with a VAT return period that ended on 30 June 2019.

Businesses must use MTD for submitting VAT returns if they are VAT-registered and have taxable turnover exceeding the VAT registration threshold (currently £85,000). The first return period beginning on or after 1 April 2019 must meet the requirements of MTD. Some more complex businesses have been given an extension until 1 October 2019.

Not only does the business have to use functional compatible software to submit VAT returns, but the business must also now keep and preserve certain digital records.
A year-long ‘soft landing’ period will apply during which HMRC will accept the use of ‘cut and paste’ as a digital link, but only if a digital link hasn’t been established between software programs.

Now that the first returns are with HMRC, what will its response be? We’ve heard that HMRC will apply a light touch approach if a business “does their best to comply” with the core requirements; only in those instances will no filing or record-keeping penalties be issued. What will this light touch approach look like and for how long will it last? These questions are yet to be addressed.

We would like to hear how your first MTD submission went. Contact leontia.doran@charteredaccountants.ie to tell us.

Leontia Doran is UK Taxation Specialist at Chartered Accountants Ireland.