The Government recently announced the delay of Making Tax Digital for Business (MTDfB) to 2020 at the earliest but that quarterly VAT reporting, using the new system will be mandatory from 2019.
Surely we are doing that already you might say. However, currently businesses are only required to complete 9 boxes when they submit their quarterly, monthly, or annual VAT return online. Under the latest proposal for MTDfB the business will be required to submit the detailed transaction data supporting the output tax and input tax figures on a quarterly basis. This will therefore require those businesses affected to keep their accounting records digitally from the 2019 start date.
These changes won’t affect business that are not VAT registered such as buy to let landlords for whom MTDfB will not apply until 2020 at the earliest, and even then only if their gross rental income exceeds the VAT registration threshold.
In preparation for the new reporting requirements we recommend that you review your accounting systems and if necessary speak to us about using a package such as Xero which will enable you to report under the new rules. If you update your system now then the chances of errors once the new rules are in will be minimised.