TAX - MAKING TAX DIGITAL - 13.02.2018

Want to give MTD for VAT a go?

Rescheduled. When the government ditched its timetable for Making Tax Digital (MTD) in summer 2017, HMRC said it would press ahead with its plan to run a MTD pilot for VAT. All businesses will be required to use MTD from April 2019.

MTD on trial. The pilot will run from April 2018 until MTD goes fully live. HMRC says that businesses which take part will just be required to use the pilot system to file their VAT returns, nothing more. HMRC has said it will provide “plenty of help” to businesses using the pilot, if needed.

Just checking! HMRC has promised that any monitoring of businesses using the pilot will be for testing purposes only and there will be no additional compliance checks. Returns made under the pilot scheme will undergo the same checks as they would if submitted through the current system. You can drop out of the scheme at any time.

Pros and cons. HMRC cites a few advantages to joining the pilot:

• the chance to get to know MTD before it goes live in April 2019
• being kept bang up to date with changes
• the opportunity influence how MTD will work.

We can’t see a disadvantage to trying the pilot, other than it means using a different system a year sooner than required (see The next step ).

Software. To take part in the process you’ll need to use bookkeeping software that complies with MTD. Not all software providers will have adapted their products in time for April 2018, so if you want to take part in the pilot you’ll need to check with your provider.

For how to apply to HMRC to join the pilot, visit http://tipsandadvice-business.co.uk/download (CD 19.10.01).