HMRC have now issued detailed guidance on record keeping and return requirements for Making Tax Digital (MTD).
VAT Notice 700/22 clarifies that spreadsheets are an acceptable means of keeping business records, provided that a bridging software is used to link the excel documents to the Government Gateway. It includes a number of suggested accounting systems that can be used to comply with MTD for VAT.
Do I need to comply with MTD for VAT?
You must comply with the regulation if:
- You are already a business with a taxable turnover
- A business whose taxable turnover this year will exceed the threshold by the 1 April 2019
- Your business is already VAT registered, even if your turnover does not exceed the threshold
The VAT taxable turnover is £85,000. MTD for VAT will apply for the period beginning 1 April 2019, though HMRC have allowed a ‘grace’ period of a year to allow businesses to get up to speed with the new regulation.