tasaccountant.co.uk 

Tax and Accounting Services for SME

VAT Return, Beckenham, Penge, West Wickham

 MTD VAT
Page last updated

14 April 2018

From April 2019 all VAT registered businesses with turnover above the VAT threshold will be required to maintain digital records and will need to send their VAT information to HMRC using third party commercial software. HMRC’s online portal will remain available to all other businesses that complete a VAT return but have turnover below the VAT threshold.

Start date   We expect that a business will be have to keep digital records and submit its VAT returns digitally with effect from the first VAT return period beginning on or after 1 April 2019
Exemptions  The exemptions that currently apply for electronic VAT filing will be extended to cover MTD for VAT. There will be an automatic exemption for businesses which are registered for VAT but have turnover below the threshold. These businesses must elect for the exemption not to apply if they wish to submit their VAT information under MTD.
Software requirements Commercial software must be able to:
• Keep records in a digital form.
• Preserve digital records in a digital form.
• Create a VAT return from the digital records.
• Provide HMRC with VAT data on a voluntary basis.
• Receive information from HMRC via the API (application programme interfaces) platform. This will allow HMRC to send ‘nudges’ to the business/agent.
Spreadsheets The use of spreadsheets will be permitted although they will need to be combined with third-party commercial software, using APIs, to ensure a seamless flow of data from the business to HMRC (and vice versa). 
Digital record-keeping requirements HMRC has confirmed that the requirement to keep digital records does not mean that businesses will have to make and store invoices and receipts digitally. Businesses can continue to keep documents in paper form if they prefer, although transactions will need to be stored digitally.
HMRC has stated that the following records will need to be kept digitally.
Designatory data: 
• Your business name 
• The address of your principle place of business 
• Your VAT registration number 
• A record of any VAT accounting schemes that you use. 

For each supply you make you must record: 
• The time of supply 
• The value of the supply 
• The rate of VAT charged. 

VAT Flat rate 

Your flat rate payment will be 14.5% of £1,200, or £174.

VAT flat rates

The VAT  flat rate you use depends on your business type. If the rate changes, you must apply the new rate from the date it changes.

If you’re in your first year as a VAT-registered business, reduce the VAT flat rate by 1%. The reduced rate lasts until the day before your registration anniversary.


VAT flat rates

The VAT flat rate you use depends on your business type. If the rate changes, you must apply the new rate from the date it changes.

If you’re in your first year as a VAT-registered business, reduce the VAT flat rate by 1%. The reduced rate lasts until the day before your registration anniversary


Value Added Tax

 Standard rate 20% 

Reduced rate e.g. on domestic fuel 5%

 Registration level from 1/4/17 £85,000 

Deregistration level from 1/4/17 £83,000

Flat rate scheme turnover limit £150,000 

Cash and annual accounting schemes turnover limit £1,350,000