MTD for VAT: HMRC continues delivery plans, despite Brexit – but other delays announced
13 December 2018
HMRC has today (Thursday 13 December) announced it has made further “tough choices” about how they deploy their resources in order to deliver on their responsibilities around Brexit. It appears that the increasing levels of uncertainty as to the nature of our departure from the EU is forcing HMRC to prepare for customs requirements associated with a possible ‘hard’ or ‘no-deal’ Brexit.
HMRC has confirmed that the delivery of Making Tax Digital for VAT (MTD-VAT) is as it was before, meaning it remains ‘full steam ahead’ for the first element of MTD. All VAT registered entities with an annual VAT-able turnover of £85,000 or more will therefore be required to keep a digital record of their VAT transactions from 1 April 2019 onwards.
MTD for businesses (MTDfB) is also unchanged for those one million or so self-employed and unincorporated landlords with simple tax affairs, who are already eligible to onboard. This includes the delivery of an end-to-end journey for those in the income tax pilot.
However, plans to widen MTDfB beyond these customer types are being slowed. This will afford HMRC more time to work with developers on meeting the requirements on delivering MTD for more complex businesses.
There is unlikely to be significant change in the make up of the support teams HMRC provides in relation to delivering MTD. However, their digital delivery team and business analysis team are being redeployed to focus on ensuring a customs solution will be in place, if required, come the 29 March withdrawal from the EU date (should this remain the case following negotiation rounds to come).
AAT has produced a detailed guide to help accountants and bookkeepers prepare their clients for the first implementation phase of Making Tax Digital. This is available at aat.org.uk/mtd-guide
Brian Palmer is AAT's tax policy expert
