UK ‘Making Tax Digital’ proceeds for VAT 2019
The UK government has delayed its ‘Making Tax Digital’ programme for personal and corporate income tax until at least 2020 – potentially longer. However, it remains committed to implement the new automated reporting requirements for VAT from 1 April 2019.
‘Death of the tax return’
Making Tax Digital is an ambitious project which will require most businesses to store all transactions digitally, and submit automated quarterly Corporation and Income Tax filings direct from their accounting software or ERPs. It is part of the government’s ambitions to move to live tax reporting and assessments. When initially proposed two years ago, it was heralded by the then Chancellor, George Osborne, as the start of the ‘death of the tax return’.
The project was to go live in January 2019 for some direct taxes, but the Treasury has this week yielded to pressure from the business lobby and software vendors to requests for more planning and consultation.
2019 VAT automatic filings
Whilst there is a delay to most elements of the new regime, VAT is to go ahead for registered businesses. Since UK VAT is already filed on a quarterly basis in most cases, this will not require additional submissions. However, all VAT records must now go digital, and accounting software filings will have to be made fully automated.
The UK’s HMRC will commence a VAT pilot before the end of 2017, and will allow tax software and accountants to test run data before the final service goes live.
Find out more