Her Majesty’s Revenue and Customs (HMRC) has issued formal guidelines on the changes to the UK VAT return submissions which would come into effect next year. VAT return submissions would be the first to see these changes under the Making Tax Digital (MTD) system and will be followed by other taxes.
UK Tax VAT Changes in April 2019 – UK VAT Submission Changes from 1 April 2019
The changes would come into effect as a result of continuing trials, concessions provided on the amount of information required and several clarifications on the use of this data. HMRC is working with software providers to develop products for these uses although there won’t be any free software.
Accordingly, VAT-registered organisations whose VAT registration threshold of exceeds £85,000 will have to comply with MTD. They will have to:
- Retain digital records of all transaction with software that can link directly to HMRC’s systems
- Report the VAT return data directly to HMRC, within five weeks of the end of their VAT quarter.
HMRC is effecting these changes to minimize the losses it had suffered previously (£3.5bn in revenue losses due to VAT return errors in the 2015 tax year).