HMRC letters to businesses affected by MTD for VAT

9th November 2018

HMRC have started to send out their first wave of what they are calling “encouragement letters” to businesses within the scope of MTD for VAT. The letters are being sent to businesses which are currently eligible to join the pilot.  They are not being copied to the businesses’ agents.

The first wave is 20,000 letters and following a pause to monitor their impact, a further 180,000 letters will be issued in due course

HMRC will be monitoring how businesses react and respond to the letter.

Association of Taxation Technicians ATT advise HMRC will issue two versions of the letter:

Version 1 explains to the business that the way they keep VAT records and submit their VAT returns to HMRC is changing,  the new way of doing things is called Making Tax Digital.  It goes on to explain which businesses are within scope (mandated) from April 2019 and that they will need to keep their records digitally, either using software or a combination of software and spreadsheets, to submit their VAT returns using MTD compatible software.  It says the business can join early if it wants to.  There is then advice on how to join the new service, with links to help and advice on gov.uk.

Version 2 is shorter.  It says that the VAT system is being modernised and the business needs to get ready for the change now.  It explains which businesses are within scope (mandated) from April 2019 and that they must keep digital records for all VAT transactions and use software to submit their VAT returns to HMRC. This is called Making Tax Digital. There is then advice on how to get the business ready, with links to help and advice on gov.uk.



 
Other items in Blogs
 
Jaimie King
13th June 2019 Charity fundraiser flies high for the Air Ambulance

                        On 8th May, friends and colleagues got together for a Paint Night in aid of East Anglian Air Ambulance. Rosey Hancock, a local artist, taught the class step-by-step how to paint a wonderful lion on canvas. All attendees thoroughly enjoyed the event and…

Read More »

Ruth Pearson
10th June 2019 Employee vehicles: Mileage Allowance Payments (MAPs)

MAPs are what you pay your employees for using their own vehicle for business journeys. You can pay your employees an approved amount of MAPs each year without having to report them to HMRC. To work out the approved amount, multiply your employee’s business travel miles for the year by the rate per mile for…

Read More »

Scott Butcher
7th June 2019 Making Tax Digital – when you need to sign up and what you’ll need

We are now two months past the start date of the 1st April 2019 for Making Tax Digital for VAT and into the last month of what will be some businesses first VAT quarter under Making Tax Digital. Some businesses may not be aware that even though they may be on MTD compliant software that…

Read More »

Jaimie King
7th June 2019 Digitalising stocktaking

As the world becomes more digital, it leaves us wondering where further efficiencies could be achieved through switching to more high-tech methods. One possible area for auditors is stocktaking. For an audited entity with significant levels of stock at the year end, it is likely the auditor will want to perform test counts of the…

Read More »

Jonathan Moore
6th June 2019 Don’t take record keeping for granted

It is common for entities who undertake research and development to receive grant funding for projects that they undertake. Grants will often be paid on the basis of expenditure incurred or a proportion thereon and may be awarded with certain conditions attached.   One such condition for grants above a certain level will be the…

Read More »

Ruth Pearson
30th May 2019 Company Cars : Advisory Fuel Rates (AFRs)

Use AFR’s to work out mileage costs if you provide company cars to your employees. These rates apply from 1 June 2019.   Advisory fuel rates from 1 June 2019 Engine size Petrol  LPG – amount per mile 1400cc or less 12p 8p 1401cc to 2000cc 15p 9p Over 2000cc 22p 14p   Engine size…

Read More »