31 Jan HMRC extends MTD for VAT pilot scheme to all eligible businesses
HMRC has extended its Making Tax Digital for VAT (MTD for VAT) pilot scheme to all eligible businesses.
MTD for VAT is set to come into effect from 1 April 2019 for businesses which have a taxable turnover above the current VAT registration threshold of £85,000. As part of the initiative, firms must keep some records digitally and must submit their VAT returns via an Application Programming Interface (API).
Any business utilising MTD for VAT whose turnover subsequently falls below the VAT threshold must stay in the regime unless they deregister for VAT. Additionally, any firm exceeding the registration threshold after 1 April 2019 must comply with MTD for VAT and is given 30 days to ensure that the appropriate digital software is in place.
As part of the pilot scheme, all eligible businesses are permitted to test out HMRC’s MTD for VAT system. The pilot scheme was first launched in April 2018, and was subsequently opened to half a million UK firms in October 2018.
Commenting on the pilot scheme, Clare Sheehan, Deputy Director for MTD for Business, said: ‘The MTD pilot is now available to all businesses who will need to use the service from April. This marks a significant milestone towards our delivery of a modern tax administration.
‘We encourage all eligible businesses to join and try out the service before they are mandated to use it.’
Meanwhile, HMRC recently confirmed that Brexit will not affect the introduction of MTD for VAT. Experts previously suggested that HMRC would have to delay the introduction of MTD for VAT if the UK was to leave the EU without a Brexit deal.
However, in a recent letter, Jim Harra, Deputy Chief Executive of HMRC, wrote: ‘Our system is already live and by the end of February we’ll have written to every affected business, encouraging them to join the thousands of others who have registered.’