Making Tax Digital for VAT moves into public beta testing phase
16 October 2018
Today HMRC has confirmed that the testing phase for the first implementation of Making Tax Digital (MTD) has gone public. 500,000 businesses will be able to join from today, with a further 100,000 able to apply by the end of this month.
The pilot has been private to a select group of businesses and their accountants since April this year. Now the majority of businesses with a VAT taxable turnover of at least £85,000 (the threshold required for the first stage of MTD) will be able to join. As of 31 March 2019, it will be a requirement for these companies to file their VAT returns digitally. Those who trade with EU member states, charities, and businesses that pay VAT on account are among those businesses who remain excluded from the pilot.
If your business is in a position to do so – as one in three AAT members told us they were at the end of September – it makes total sense to engage with the pilot as soon as possible. That way, you can get fully involved with the opportunity to test the system in full, and train up all affected employees and clients where needed. In addition, you’ll be in a position to let HMRC know of any remaining teething problems prior to mandation itself.
If your business isn’t ready to join the pilot, AAT tax policy expert Brian Palmer strongly advises that you start planning immediately to ensure the business can join well ahead of next April. There’ll be no prizes on offer for waiting. Of the 150 or so providers who have said they will provide MTD-compliant software, over 70 have already had their solutions recognised on HMRC's website. If you think it wise to test the system in full before next April and your provider is ready, there’s little point in waiting, you might as enrol to join the pilot straight away.
HMRC has published a series of guidance pages and videos to help accountants and small businesses with Making Tax Digital for VAT. This includes videos on how to sign up, and on what compatible software is, and can be found on the HMRC Youtube channel.
