Making Tax Digital (MTD) Letters From HMRC

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HMRC are writing to around 380,000 businesses over the next two weeks to let them know about MTD for VAT and to advise that single companies, who have annual turnover of £85,000 or more, are now eligible to join the MTD pilot and can start submitting VAT returns under MTD before it become compulsory from April 2019. Some VAT registered businesses with turnover just below the VAT threshold will also receive the same letter.

The following categories of VAT traders can’t join the MTD pilot yet, so won’t receive a MTD welcome letter from HMRC:

  • partnerships
  • trade with the EU
  • in a VAT group
  • VAT division
  • based overseas
  • use VAT flat rate scheme
  • make VAT payments on account
  • newly registered and haven’t submitted a VAT return yet
  • in the surcharge system

It is expected that the HMRC MTD pilot program will be opened up to newly registered traders, those who use the flat rate scheme, businesses within the surcharge mechanism, all partnerships and EU trading businesses in early 2019.

It is then expected that around April 2019 the MTD for VAT pilot will be opened around this time for the following VAT registered organisations who have been deferred to commence MTD from October 2019:

  • Trusts
  • Unincorporated not for profit organisations
  • VAT divisions
  • VAT groups
  • Public sector entities and companies
  • Local authorities
  • Traders based overseas
  • Large businesses who must make VAT payments on account
  • Annual accounting scheme users

These organisations should receive a welcome to MTD letter at this time

Please get in touch if you would like further information about the MTD pilot or generally about MTD.  Contact Vicki Harper