HMRC has confirmed that a live pilot for Making Tax Digital (MTD) for VAT began on 10 April 2018 before becoming mandatory for all businesses and landlords in April 2019.
Taxpayers participating in the pilot are self-employed sole traders or businesses that have been invited to join the pilot by HMRC.
Participants in the pilot are being given the opportunity to submit their returns using the new system. HMRC intends to monitor progress to ensure the system works as intended.
Under the new MTD requirements, from April 2019, businesses and landlords with a VAT turnover above the threshold of £85,000, will be required to set up a digital tax account and record their tax affairs using online accounting software or an app. This will be a significant change from the current online filing system.
A list of MTD compatible software products is yet to be published, but such a list is expected to be released shortly. Progress is also being made on guidance relating to MTD. HMRC is expected to share revised draft guidance for comment next month.
An overview of the government’s MTD proposals is available to view here.
