5 October 2018 News
Businesses need to act now to ensure they are prepared for new digital VAT reporting rules which come into effect in April 2019, according to KPMG.
Making Tax Digital (MTD) is HMRC’s key strategic project aimed at transforming and modernising how tax is reported and managed, and the changes impact every company above the VAT threshold which currently stands at £85,000, the business advisory firm said at an event in the company’s Soloist building in Belfast.
A representative from the HMRC's MTD customer readiness and external stakeholder team was also on hand at the event to provide further guidance on the impact for businesses.
Under the new rules, they will be required to file their VAT returns digitally through “functional, compatible software”, rather than the online portal which has been used since 2010.
Business will also be required to maintain digital records in digitally-linked compatible software which can create a VAT return from the digital records which can connect to HMRC systems via an Application Programming Interface (API).
Johnny Hanna, Partner and Head of Tax at KPMG in Belfast said: “It is essential that businesses are fully prepared to submit their VAT return digitally because HMRC’s online service won’t be available from April 2019. Now is the time to make sure you assess your business, ensure you have the appropriate systems in place and are prepared for a potential increase in requirements through Making Tax Digital.”
Frankie Devlin, Indirect Taxes Partner in KPMG’s Belfast office, said the latter point is particularly pertinent given a shift in tax reporting elsewhere in the world:
“We anticipate that what is being asked of businesses under Making Tax Digital will evolve over time in line with wider trends we are seeing in Europe and across the world, with corporation tax and income tax expected in 2020 at the earliest. Businesses need to consider how they collect, store and process data from a tax perspective to prepare for those potential developments – starting with VAT, where the clock is already ticking.”
KPMG can help business get ready for Making Tax Digital by:
Johnny Hanna, Partner and Head of Tax at KPMG in Belfast.