The Government has announced plans on Making VAT Digital from April 2019.
Businesses will need to make the switch to filing VAT returns using software packages by next year, as the Government’s Making VAT Digital (MVD) becomes mandatory for companies with turnovers above the £85,000 VAT threshold from April 2019.
The Government has announced a consultation and trial for MVD. Businesses will be required to keep digital records and use MVD compatible software to submit their VAT returns.
David McGeachy, head of VAT at Saffrey Champness chartered accountants, said only 12 per cent of businesses currently filed their returns using a software package.
“There is no doubt that the switch from manual calculation and reporting is going to require a quantum leap for some,” he said.
He also warned taxpayers may find VAT repayments and claims were delayed if they were unable to provide the information in the new format.
There will be no initial change to dates for filing returns or to the information required when submitting and the system will allow businesses to provide supplementary information if they wish to do so.