The United Kingdom Government has released The Value Added Tax Regulations 2018, stemming from the MTD project.
The UK Government has released The VAT Regulations 2018 to provide for the introduction of new digital tax administration obligations for value-added tax registered persons in the UK
In July 2018, the UK Government postponed the implementation of their Making Tax Digital (MTD) project until 2019.
What is the Making Tax Digital reform?
In the UK, every individual and business now has access to their own personalised digital tax account. The aim is to make the UK one of the most digitally advanced tax administrations in the world, modernising the tax system.
What's the update now?
Under MTD, from April 1st 2019, businesses with a turnover above the VAT threshold (currently GBP £85,000) will have to:
- keep their records digitally (for VAT purposes only)
- provide their VAT return information to HM Revenue and Customs (HMRC) through MTD-compatible software.
MTD will be available on a voluntary basis to other businesses, for both VAT and income tax.
The second draft of Finance Bill 2017, published on September 8th 2017, included legislation allowing for the introduction of Making Tax Digital for VAT. This primary legislation gave HMRC the powers to introduce regulations for the regime in December 2017, which set out the detailed requirements that businesses will have to meet – The Value Added Tax (Amendment) Regulations 2018.
The regulations have now been forwarded to parliament for approval.
The UK and Brexit will have major impacts on VAT Recovery - if you'd like to find out more about how it could impact you, please get in touch with us below.
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