Published on 5.4.19

Making Tax Digital for VAT - April 2019

Published 28 March 2019 by H M Revenue & Customs

 

Most VAT registered businesses with a taxable turnover above £85,000 must follow the new rules for Making Tax Digital for VAT.  The records you need to keep are the same as any VAT registered business, but you’ll need to keep some of them digitally.

 

How to keep digital records

You can use any digital product to keep your records, including:

 

Your digital records are used to make up the VAT return you submit using compatible software.

 

Using more than one product to keep records

If you use more than one product to keep your digital records, you’ll need to digitally link them together.

A digital link is a transfer or exchange of data between the products you use to keep your records. You can create digital links by doing things like:

You must have digital links between the products you use by 31 March 2020, unless HMRC sent you a letter to tell you that you’re in the deferral group. If you’re in the deferral group, you must have digital links between the products you use by 30 September 2020.  FE Colleges, HE Colleges and Universities are in the deferral group.

 

Business records

You must keep the following business records digitally:

You’ll also need to keep a digital record of the total amount of tax your business:

 

Supplies your business makes

For each supply your business makes, you must keep a digital record of:

You’ll also need to record the total amount of VAT charged on supplies your business receives at:

You can combine the total value of supplies in one record if the supplies were:

If an invoice has supplies at different rates of VAT, you must record each rate of VAT charged separately.

 

If you use a third party

If you’re using a third party and they give you a single invoice for multiple supplies they make on your behalf, you can treat all supplies as one invoice.  Example, catering agent contractors.

 

Supplies your business receives

 

For each supply your business receives, you must keep a digital record of the:

If there is more than one supply on an invoice, you can record the total from the invoice in one record.

 

If you use a third party

If you’re using a third party and they give you a single invoice for multiple supplies they receive on your behalf, you can treat all supplies as one invoice.

 

If you’re an employer

If you’re an employer, you can treat all invoices provided at one time by an employee or a volunteer as one invoice.

 

If you make a reverse charge supply

If your software does not record reverse charge transactions you’ll need to record them twice, once as a supply made and once as a supply received.

 

Retail Sales Scheme

 

If you’re on a retail scheme you can record your daily gross takings instead of the individual sales.  Example you must keep a record of daily takings for catering, salon and other retail sales to the public.

 

Further HMRC MTD Guidance

Find software that’s compatible with Making Tax Digital for VAT

(https://www.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-vat)

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